PepsiCo’s

Diversification Strategy
in 2015
 Table of contents
01 Summary

02 Question

03 Answer
01
Summary
PepsiCo was the world's largest snack and beverage company in 2014.
In 2015, PepsiCo's business lineup included 22 $1 billion global brands.
The company's top managers were focused on sustaining the
impressive performance through strategies keyed to product innovation.
PepsiCo increased its dividend for the 42nd consecutive year in 2014
and paid $8.7 billion to its shareholders through dividends and stock
repurchases. The company's Performance with Purpose plan was
focused on minimizing the company's impact on the environment.
Company History
PepsiCo's roots can be traced to 1898, when Caleb Bradham created Pepsi-
Cola. The company's salty-snack business began in 1932 with Elmer Doolin's
Fritos. By 1971, PepsiCo had more than doubled its revenues to reach $1
billion. PepsiCo acquired 7-Up, ready-to-eat popcorn, Lipton teas, Aquafina
bottled water. CEO Roger Enrico spun off PepsiCo's restaurants in 1997 to
focus on food and beverages. The spin-off was due to fierce competition and
low profit margins.

Building Shareholder Value in 2015

PepsiCo's Indra Nooyi was selected as the company's CEO in October 2006.
In eight years, PepsiCo's revenues had increased by nearly 90 percent and its
share price had grown 50 percent. Most PepsiCo brands had achieved
numberone or number-two positions in their respective food and beverage
categories. The company was committed to producing the highest-quality
products in each category. PepsiCo's Asia, Middle East, and Africa divisions
produced, marketed, and distributed snack brands and beverages.
 Questio
02 n
 1 2 3
Apakah strategi Benarkah synergi What next bagi
Pepsi horizontal? tercipta? Pepsi?
Vertical? Related? Tunjukkan.
Unrelated?
03
Answer
 1
PepsiCo’s related business diversification strategy
• Common brand names
• Products that could be sold together
• Products that compliment each other

Business strategies of 6 business segments

• Frito-Lay North America: Convience; BFY & GFY Products; more conscious indulgent
snacks
• Quaker Foods North America: Depend on top brands
• Latin American Foods: Expand internationally; understanding consumer
• PepsiCo Americas Beverages: Power of One; more BFY & FGY Products
• PepsiCo Europe: 2-to-1 advantage; explore international market further
• Asia, Middle East, Africa: Market research sharing; strategic fit
 2

PepsiCo’s portfolio is a good strategic fit

• Product match-ups
• Shared market research
• Cost sharing
 3
• More focus on current international markets in Asia, Middle East,
and Africa
• Continue to distribute new brands in Europe’s market
• More BFY & GFY snacks & beverages
• Continuous joint acquisitions similar to that of William-Bill-Dann
Foods for more product diversification
Terima
Kasih