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BUSINESS ORGANISATION & MANAGEMENT

SUBMITTED BYYASH MITTAL KANCHAN KAUSHIK ZEESHAN TANVEER RONAK GUPTA AKASH SHARMA SHOUMITRO ROY

SWOT ANALYSIS OF INDIAN RETAIL SECTOR


( IN CONTEXT OF FDI POLICY )

What do we mean by FDI?


Foreign Direct Investment (FDI) can be defined as a cross border investment, where foreign assets are invested into the organizations of the domestic market excluding the investment in stock. It brings private funds from overseas into products or services. The domestic company in which foreign currency is invested is usually being controlled by the investing foreign company. Eg. An American company taking major stake in a company in India. Their ROI is based on the performance of the project.

In the past decades, FDI was concerned only with highly industrialized countries. US was the worlds largest recipient of FDI during 2006 with an investment of 184 million from OECD (Organization for Economic Co-operation and Development) countries. France, Greece, Iceland, Poland, Slovak Republic, Switzerland and Turkey also have a positive record in FDI investments. Now, during the course of time, FDI has become a vital part in every country more particularly with the developing countries.

This is because of the following reasons: Availability of cheap labor. Uninterrupted availability of raw material. Less production cost compared with other developed countries. Quick and easy market penetration.

What Is Retailing?
In 2004, The High Court of Delhi defined the term retail as a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale). A sale to the ultimate consumer. Thus, retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. Retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. A retailer is involved in the act of selling goods to the individual consumer at a margin of profit.

FDI IN RETAIL SECTOR


Retailing is one of the worlds largest private industry. Liberalizations in FDI have caused a massive restructuring in retail industry. The benefit of FDI in retail industry superimposes its cost factors. Opening the retail industry to FDI will bring forth benefits in terms of advance employment, organized retail stores, availability of quality products at a better and cheaper price. It enables a country's product or service to enter into the global market.

FDI IN INDIA
Starting from a baseline of less than $1 billion in 1990, a recent

UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 20102012. As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, the US and the UK were among the leading sources of FDI. FDI in 2010 was $24.2 billion, a significant decrease from both 2008 and 2009. Foreign direct investment in August 2010 dipped by about 60% to approx. $34 billion, the lowest in 2010 fiscal, industry department data released showed. In the first two months of 201011 fiscal, FDI inflow into India was at an all-time high of $7.78 billion up 77% from $4.4 billion during the corresponding period in the previous year. The worlds largest retailer Wal-Mart has termed Indias decision to allow 51% FDI in multi-brand retail as a first important step and said it will study the finer details of the new policy to determine the impact on its ability to do business in India. However this decision of the government is currently under suspension due to opposition from multiple political quarters.

FDI POLICY IN INDIA


FDI as defined in Dictionary of Economics (Graham Bannock et.al) is

investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy. Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. The Reserve Bank of India (RBI) in this regard had issued a notification, which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. This notification has been amended from time to time. The Ministry of Commerce and Industry, Government of India is the nodal agency for motoring and reviewing the FDI policy on continued basis and changes in sectoral policy/ sectoral equity cap. The FDI policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion (DIPP). The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (FIPB) would be required.

FDI IN INDIAN RETAIL SECTOR


As per the current regulatory regime, retail trading (except under

single-brand product retailing FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a company to be able to get foreign funding, products sold by it to the general public should only be of a single-brand; this condition being in addition to a few other conditions to be adhered to.

India being a signatory to World Trade Organization's General

Agreement on Trade in Services, which include wholesale and retailing services, had to open up the retail trade sector to foreign investment. There were initial reservations towards opening up of retail sector arising from fear of job losses, procurement from international market, competition and loss of entrepreneurial opportunities. However, the government in a series of moves has opened up the retail sector slowly to Foreign Direct Investment (FDI). In 1997, FDI in cash and carry (wholesale) with 100 percent ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51 percent investment in a single brand retail outlet was also permitted in 2006. FDI in Multi-Brand retailing is prohibited in

It will be prudent to look into a press note issued by DIPP and consolidated FDI Policy issued in October 2010 which provide the sector specific guidelines for FDI with regard to the conduct of trading activities. a) FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route. b) FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of Single Brand products, subject to Press Note 3 (2006 Series).

c) FDI is not permitted in Multi Brand Retailing in India.

ADVANTAGES OF FDI IN RETAIL


causes a flow of money into the economy which

stimulates economic activity it may give domestic producers an incentive to become more efficient the government of the country experiencing increasing levels of FDI will have a greater voice at international summits as their country will have more stakeholders in it Increase economic growth by dealing with different international products 1 million employment will create in three years - UPA Government Billions will be invested in Indian market Spread import and export business in different countries Agriculture related people will get good price of their goods

DISADVANTAGES OF FDI IN RETAIL


inflation may increase slightly domestic firms may suffer if they are relatively uncompetitive

if there is a lot of FDI into one industry e.g. the automotive

industry then a country can become too dependent on it and it may turn into a risk that is why countries like the Czech Republic are "seeking to attract high value-added services such as research and development (e.g.) biotechnology) Will affect 50 million merchants in India Profit distribution, investment ratios are not fixed An economically backward class person suffers from price raise Retailer faces loss in business Market places are situated too far which increases traveling expenses Workers safety and policies are not mentioned clearly Inflation may be increased

Since foreign firms will bring new technologies and money with them which would result in lot of small businessman and domestic companies going out of business as foreign companies have advantage of scale of operations and also top talent with them. The proverb big fish eat little fish scenario may happen due to foreign direct investment.
Since these companies will also have more technology and they will use capital intensive methods, it will affect the jobs of many people because eventually after some time they might not be needed. Chances of these foreign firms becoming monopolies due to their large size and then charging exorbitant rates from consumers cannot be ruled out and therefore government should ensure that they have proper policies and systems in place to keep a check on such practices.

Entry Options For Foreign Players prior to FDI Policy


Although prior to Jan 24, 2006, FDI was not authorized in retailing, most general players had been operating in the country. Some of entrance routes used by them have been discussed in sum as below:1. Franchise Agreements It is an easiest track to come in the Indian market. In franchising and commission agents services, FDI (unless otherwise prohibited) is allowed with the approval of the Reserve Bank of India (RBI) under the Foreign Exchange Management Act. This is a most usual mode for entrance of quick food bondage opposite a world. Apart from quick food bondage identical to Pizza Hut, players such as Lacoste, Mango, Nike as good as Marks as good as Spencer, have entered Indian marketplace by this route. 2. Cash And Carry Wholesale Trading 100% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers. The wholesaler deals only with smaller retailers and not Consumers. Metro AG of Germany was the first significant global player to enter India through this route.

3. Strategic Licensing Agreements Some foreign brands give exclusive licenses and distribution rights to Indian companies. Through these rights, Indian companies can either sell it through their own stores, or enter into shop-in-shop arrangements or distribute the brands to franchisees. Mango, the Spanish apparel brand has entered India through this route with an agreement with Piramyd, Mumbai, SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd 4. Manufacturing and Wholly Owned Subsidiaries. The foreign brands such as Nike, Reebok, Adidas, etc. that have whollyowned subsidiaries in manufacturing are treated as Indian companies and are, therefore, allowed to do retail. These companies have been authorized to sell products to Indian consumers by franchising, internal distributors, existent Indian retailers, own outlets, etc. For instance, Nike entered through an exclusive licensing agreement with Sierra Enterprises but now has a wholly owned subsidiary, Nike India Private Limited.

FDI IN SINGLE BRAND RETAIL The Government has not categorically defined the meaning of Single Brand anywhere neither in any of its circulars nor any notifications. In single-brand retail, FDI up to 51 per cent is allowed, subject to Foreign Investment Promotion Board (FIPB) approval and subject to the conditions mentioned in Press Note 3 that (a) only single brand products would be sold (i.e., retail of goods of multi-brand even if produced by the same manufacturer would not be allowed), (b) products should be sold under the same brand internationally, (c) single-brand product retail would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under single-brand would require fresh approval from the government. While the phrase single brand has not been defined, it implies that foreign companies would be allowed to sell goods sold internationally under a single brand, viz., Reebok, Nokia, Adidas. Retailing of goods of multiple brands, even if such products were produced by the same manufacturer, would not be allowed.

Going a step further, we examine the concept of single brand and the associated conditions: FDI in Single brand retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship brand in India, those retail outlets could only sell products under the Adidas brand and not the Reebok brand, for which separate permission is required. If granted permission, Adidas could sell products under the Reebok brand in separate outlets. But, what is a brand? Brands could be classified as products and multiple products, or could be manufacturer brands and own-label brands. Assume that a company owns two leading international brands in the footwear industry say A and R. If the corporate were to obtain permission to retail its brand in India with a local partner, it would need to specify which of the brands it would sell. A reading of the government release indicates that A and R would need separate approvals, separate legal entities, and may be even separate stores in which to operate in India. However, it should be noted that the retailers would be able to sell multiple products under the same brand, e.g., a product range under brand A Further, it appears that the same joint venture partners could operate various brands, but under separate legal entities.

Now, taking an example of a large departmental grocery chain, prima facie it appears that it would not be able to enter India. These chains would, typically, source products and, thereafter, brand it under their private labels. Since the regulations require the products to be branded at the manufacturing stage, this model may not work. The regulations appear to discourage own-label products and appear to be tilted heavily towards the foreign manufacturer brands. There is ambiguity in the interpretation of the term single brand. The existing policy does not clearly codify whether retailing of goods with sub-brands bunched under a major parent brand can be considered as single-brand retailing and, accordingly, eligible for 51 per cent FDI. Additionally, the question on whether co-branded goods (specifically branded as such at the time of manufacturing) would qualify as single brand retail trading remains unanswered.

FDI IN MULTI-BRAND RETAIL The government has also not defined the term Multi Brand. FDI in Multi Brand retail implies that a retail store with a foreign investment can sell multiple brands under one roof. In July 2010, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce circulated a discussion paper on allowing FDI in multi-brand retail. The paper doesnt suggest any upper limit on FDI in multi-brand retail. If implemented, it would open the doors for global retail giants to enter and establish their footprints on the retail landscape of India. Opening up FDI in multi-brand retail will mean that global retailers including Wal-Mart, Carrefour and Tesco can open stores offering a range of household items and grocery directly to consumers in the same way as the ubiquitous kirana store.

FOREIGN INVESTORS CONCERN RELATED TO FDI


For those brands which adopt the franchising route as a matter of policy, the current FDI Policy will not make any difference. They would have preferred that the Government liberalize rules for maximizing their royalty and franchise fees. They must still rely on innovative structuring of franchise arrangements to maximize their returns. Consumer durable majors such as LG and Samsung, which have exclusive franchisee owned stores, are unlikely to shift from the preferred route right away. For those companies which choose to adopt the route of 51% partnership, they must tie up with a local partner. The key is finding a partner which is reliable and who can also teach a trick or two about the domestic market and the Indian consumer. Currently, the organized retail sector is dominated by the likes of large business groups which decided to diversify into retail to cash in on the boom in the sector corporates such as Tata through its brand Westside, RPG Group through Foodworld, Pantaloon of the Raheja Group and Shoppers Stop. Do foreign investors look to tie up with an existing retailer or look to others not necessarily in the business but looking to diversify, as many business groups are doing?

An arrangement in the short to medium term may work wonders but what happens if the Government decides to further liberalize the regulations as it is currently contemplating? Will the foreign investor terminate the agreement with Indian partner and trade in market without him? Either way, the foreign investor must negotiate its joint venture agreements carefully, with an option for a buyout of the Indian partners share if and when regulations so permit. They must also be aware of the regulation which states that once a foreign company enters into a technical or financial collaboration with an Indian partner, it cannot enter into another joint venture with another Indian company or set up its own subsidiary in the same field without the first partners consent if the joint venture agreement does not provide for a conflict of interest clause. In effect, it means that foreign brand owners must be extremely careful whom they choose as partners and the brand they introduce in India. The first brand could also be their last if they do not negotiate the strategic arrangement diligently.

RATIONALE BEHIND ALLOWING FDI IN RETAIL SECTOR FDI can be a powerful catalyst to spur competition in the retail industry, due to the current scenario of low competition and poor productivity. The policy of single-brand retail was adopted to allow Indian consumers access to foreign brands. Since Indians spend a lot of money shopping abroad, this policy enables them to spend the same money on the same goods in India. FDI in single-brand retailing was permitted in 2006, up to 51 per cent of ownership. Between then and May 2010, a total of 94 proposals have been received. Of these, 57 proposals have been approved. An FDI inflow of US$196.46 million under the category of single brand retailing was received between April 2006 and September 2010, comprising 0.16 per cent of the total FDI inflows during the period. Retail stocks rose by as much as 5%. Shares of Pantaloon Retail (India) Ltd ended 4.84% up at Rs 441 on the Bombay Stock Exchange. Shares of Shoppers Stop Ltd rose 2.02% and Trent Ltd, 3.19%. The exchanges key index rose 173.04 points, or 0.99%, to 17,614.48. But this is very less as compared to what it would have been had FDI upto 100% been allowed in India for single brand.

The policy of allowing 100% FDI in single brand retail can benefit both the foreign retailer and the Indian partner foreign players get local market knowledge, while Indian companies can access global best management practices, designs and technological knowhow. By partially opening this sector, the government was able to reduce the pressure from its trading partners in bilateral/ multilateral negotiations and could demonstrate Indias intentions in liberalizing this sector in a phased manner. Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country & its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers. It would also help bring about improvements in farmer income & agricultural growth and assist in lowering consumer prices inflation. Apart from this, by allowing FDI in retail trade, India will significantly flourish in terms of quality standards and consumer expectations, since the inflow of FDI in retail sector is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments. It is therefore obvious that we should not only permit but encourage FDI in retail trade.

Conclusion
A START HAS BEEN MADE
Wal-mart has a joint venture with Bharti Enterprises for cash-

and-carry (wholesale) business, which runs the Best Price stores. It plans to have 15 stores by March and enter new states like Andhra Pradesh , Rajasthan, Madhya Pradesh and Karnataka. Duke, Wall-marts CEO opined that FDI in retail would contain inflation by reducing wastage of farm output as 30% to 40% of the produce does not reach the end-consumer. In India, there is an opportunity to work all the way up to farmers in the back-end chain. Part of inflation is due to the fact that produces do not reach the end-consumer, Duke said, adding, that a similar trend was noticed when organized retail became popular in the US.

Many of the foreign brands would come to India if FDI in multi

brand retail is permitted which can be a blessing in disguise for the economy.

BACK-END LOGISTICS MUST FOR FDI IN MULTI BRAND RETAIL The government has added an element of social benefit to its latest plan for calibrated opening of the multi-brand retail sector to foreign direct investment (FDI). Only those foreign retailers who first invest in the back-end supply chain and infrastructure would be allowed to set up multi brand retail outlets in the country. The idea is that the firms must have already created jobs for rural India before they venture into multi-brand retailing. It can be said that the advantages of allowing unrestrained FDI in the retail sector evidently outweigh the disadvantages attached to it and the same can be deduced from the examples of successful experiments in countries like Thailand and China; where too the issue of allowing FDI in the retail sector was first met with incessant protests, but later turned out to be one of the most promising political and economical decisions of their governments and led not only to the commendable rise in the level of employment but also led to the enormous development of their countrys GDP. Moreover, in the fierce battle between the advocators and antagonist of unrestrained FDI flows in the Indian retail sector, the interests of the consumers have been blatantly and utterly disregarded. Therefore, one of the arguments which inevitably needs to be considered and addressed while deliberating upon the captioned issue is the interests of consumers at large in relation to the interests of retailers.

The Industrial policy 1991 had crafted a trajectory of change whereby every sectors of Indian economy at one point of time or the other would be embraced by liberalization, privatization and globalization.FDI in multibrand retailing and lifting the current cap of 51% on single brand retail is in that sense a steady progression of that trajectory. But the government has by far cushioned the adverse impact of the change that has ensued in the wake of the implementation of Industrial Policy 1991 through safety nets and social safeguards. But the change that the movement of retailing sector into the FDI regime would bring about will require more involved and informed support from the government. One hopes that the government would stand up to its responsibility, because what is at stake is the stability of the vital pillars of the economy- retailing, agriculture, and manufacturing. In short, the socio economic equilibrium of the entire country.

SWOT ANALYSIS
SWOT analysis (alternately SLOT analysis) is a strategic planning

method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.
Setting the objective should be done after the SWOT analysis has been

1.

2.
3. 4.

performed. This would allow achievable goals or objectives to be set for the organization. Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project

PEPSICO INDIA
o PepsiCo entered India in 1989 and in a short

period of 20 years has grown into the largest and one of the fastest growing food & beverage business in the country. PepsiCo Indias growth has been guided by PepsiCos global vision of Performance with Purpose. This means that while businesses maximize shareholder value, they have a responsibility to all the stakeholders including the communities in which they operate, the consumers they serve and the environment whose resources they use.

Large investor: One of the largest US multinational investors in the country with an investment of over $1 billion, PepsiCo India provides direct and indirect employment to over 1,50,000 people across the country. Its beverage and snack food business is supported by 36 beverage bottling plants, (13 company and 23 franchisee owned) and three food plants. PepsiCo Indias diverse portfolio includes iconic brands like Pepsi, Lays, Kurkure, Tropicana 100%, Gatorade, Quaker and young but immensely popular and fast growing brands such as Nimbooz and Aliva. No.1 food & beverage business in India: PepsiCo India has not only grown to become the countrys largest food and beverage business but has also become a powerful and consistent driver of PepsiCos global growth. Over the last two years, India's beverage and foods businesses have been the largest volume growth contributors to PepsiCo across the globe. PepsiCo India has been frequently recognized for its industry-leading human resource practices, indovations, corporate values, and talent, and was one of the five top marketers of the country in 2009.

A third of PepsiCo India's portfolio today comprises healthier products: PepsiCos portfolio reflects its commitment to nourish consumers with a diverse range of fun and healthy products, making the healthful choice an easier choice. As PepsiCo grows, the portfolio transformation will continue with a systematic plan to reduce added sugar, sodium and saturated fats in its products. Today, the portfolio includes several healthier treats like Quaker Oats, Tropicana juices, rehydrator Gatorade, Pepsi Max and Cheetos Whoosh. PepsiCo was the first in India to introduce the use of healthier oils for its snacks -- Lays Potato chips, Kurkure and Cheetos.
Global leader in water conservation: In 2009, PepsiCo India achieved a significant milestone, by becoming the first business in the PepsiCo system to achieve Positive Water Balance (PWB). This means that it replenishes more water than it consumes in its manufacturing operations. This has been validated by Deloitte Consulting. PepsiCo is leading a pioneering initiative to replace transplanting of paddy with direct seeding technology which has helped reduce water consumption in paddy cultivation by over 30% and has also cut down GHG emissions by 75%. In 2010, PepsiCo India saved 10.1 billion litres of water through various initiatives. For water related environment initiatives, PepsiCo India has received numerous awards such as CII National award for water management, Water Digest award for water practices and

Care for the environment: Following its success in water conservation, the company is now focused on reducing its carbon footprint. Nearly 30% of its energy is today generated from renewable sources such as rice husk boilers and wind turbines. Initiatives such as agriculture waste boilers in our plants, installation of wind turbines, reduction of use of chemicals, reduction in weight of packaging and film used in product packaging, reduction in weight of metal crowns/polypropylene caps for plastic bottles, conversion of potato waste into bio gas help reduce load on the environment. PepsiCo India also partners NGOs and local administrations in three states of India to recycle household solid waste in an endeavor to keep cities clean. Its award-winning "waste to wealth" recycling program reaches 450,000 families.
Exemplary employment practices: PepsiCo India believes in providing employment and growth opportunities to local talent. Its College of Leadership, ensures early identification of talent, and employees focused development through critical experiences. PepsiCo strongly believes in Winning with Diversity and Inclusion. PepsiCo has been offering employment to women employees at the same employment terms and equal growth opportunities as men. Today women comprise more than 25% of the companys leadership team in India. PepsiCo India currently employs over 100 differently-abled people and has won the prestigious Hellen Keller award from the National Centre for Promotion of Employment for Disabled

SWOT ANALYSIS OF PEPSICO INDIA


INTERNAL FACTORS
STRENGTHS :

experienced management team


a competitive product line a global marketing realm continuous efforts by their research and development to research trends in the

industry and to be creative in exploiting those trends Experienced, broad base of interests and knowledge Unique, tastes good, competitive price, and convenient Good Marketing Diverse, and global awareness International, diverse positions Personnel High sales revenue, high sale growth, large capital base Low costs and liabilities due to outsourcing of bottling Efficient Research & Development Distinctive name, product and packaging in with regards to its markets

WEAKENESS : The company is so large and could possibly lose focus or have internal conflict problems New one calorie products have no existing customer base, generic brands can make similar drinks - cheaper Possible conflicts due to so many people, possible trouble staying focused High expenses, may have trouble balancing cash-flows of such a large operation Lose control and quality standards Not entirely patentable, constant replicability by competitors

External Factors
OPPORTUNITIES Huge market in the healthy products and growing market for specialized foods for ethnic groups Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency Consumer income is high, more tend to eat out, convenience is important to them. Ever increasing population, increasing the demand. As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product.

THREATS More expensive products than Coke, such a high price may limit lower income families from buying a Pepsi product Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced High expenses, may have trouble balancing cash-flows of such a large operation New one calorie products have no existing customer base, generic brands can make similar drinks cheaper The quickness of technological advances causing existing products to be no longer the most advanced. Very elastic demand, almost pure competition in pricing of product

SWOT MATRIX
Basically four main strategies are proposed:
S-O strategies pursue opportunities that are a good fit to

the companies strengths. These strategies are based on institutional strengths to take advantage of market opportunities. W-O strategies overcome weaknesses to pursue opportunities. These strategies are based on overcoming institutional weaknesses to take advantage of market opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. These strategies are based on institutional strengths to avoid market threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. These strategies are based on overcoming/minimizing institutional weaknesses to avoid

SWOT MATRIX OF PEPSICO INDIA


We have discussed SWOT analysis of Pepsi-Co in our previous topic now here we are going to discuss the TOWS Matrix of PepsiCo, keeping in mind its SWOT analysis. Following is the detailed analysis of PepsiCo SWOT matrix: WT ANALYSIS One weakness that Pepsi posses is that it has very strong taste it really feels that something highly toxic going inside the body, where as the same product of the coke is not much strong. They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsis product. During the last years, it was published in financial post that there has been big complaints from the customers with regard to the bad taste that they experienced during the span of six months. If they soon pay no attention towards that this will create a big problem for them. Large size may lead to conflicting interests. New one calorie products have no existing customer base; generic brands can make similar drinks cheaper. It is also big threat for any company people may like or dislike new launching product.

WO ANALYSIS They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as nothing official about it. If they dont focus on sudden changings in their advertising then they can convert this weakness into opportunity. They lack behind in catering the rural areas and just concentrating in the urban areas. They should try to increase their distributions and also focus on capturing rural areas; this will become a big opportunity for them. The other big weakness on Pepsi is that they dont pay any attention towards garments. They may enter in garments business in order to promote their brand name, by making sports cloths fro players which represent their name by wearing their clothes. That must increase the customer and income of the Pepsi. High expenses may have trouble balancing cash-flows of such a large operation. The staff may show dishonesty. They should try to pay much attention towards their cash flow, and audit there statements on regular

ST ANALYSIS In many countries Pepsi had more expensive products than Coke; such a high price may limit a lower income family from buying a Pepsi product, therefore which is a big threat for Pepsi that may Pepsi have to face in the future. Pepsi is a foreign company therefore they have a big threat every time on them of Political instability and civil unrest. The whole culture and business operating environment at Pepsi-ColaWest Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced. Continuous efforts to research trends an reinforce creativity, if they fail in their efforts then there is a big threat for the company. The competitors may get benefit by their plans.

SO ANALYSIS
The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a centralized database and they use computers as business tools for analysis and quick decision making. Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency and that will become such a big opportunity for Pepsi. Large No. of diversity businesses is also its main strength as it ahs diversity in many businesses such as Pepsi beverages, Pepsi foods, Pepsi Restaurants, and due to large number of diversity they can capture more customer, therefore it will become such a big opportunity for Pepsi. Pepsi is also a reputable organization, and is well known all over the world. Perception of producing a high quality product and strength can become a big opportunity for Pepsi if they use it in well arranged manner, such as advertising more and also by conducting concerts to attract more customers.

THANK YOU

ACKNOLEDGEMENTS
MR. SURAJ PRAKASH

MY TEAM MEMBERS ( Kanchan, Zeeshan,

Ronak, Akash, Shoumitro )

BIBLIOGRAPHY
http://stepheny.hubpages.com/hub/pepsi-swot

analysis-with-other-soft-drinks http://pepsicoindia.co.in/company.html www.wikipedia.com www.google.com Strategic management concepts and cases : Fred R David