AmbassadorMorning9529
Answer the following question based on the information: 1….
Answer the following question based on the information:
1. Provide an executive summary of provided information below.
4. Old Vision Statement:
“Performance with Purpose” by delivering excellent financial performance over the long term while leaving a positive imprint on society and the environment.”
The statement, however, lacks specificity and does not give a clear indication of how the business plans to accomplish its objectives. Although “performance with purpose” is mentioned in the vision statement, it is not made clear what this means in practical terms.
Revised Vision Statement:
“To be a world-class food and beverage company that consistently delivers innovative products, exceptional customer experience, and sustainable solutions for a healthier planet.”
Old Mission Statement:
“Our mission is to provide people globally with delicious, affordable, convenient and complementary foods, beverages, snacks, and treats great for consumption anytime day or night. The company is committed to investing in its people, company and communities to position itself for long-term success.”
The mission statement highlights the provision of delicious, affordable, convenient, and complementary food and beverages globally, but it does not outline how the company plans to achieve this.
Proposed Mission Statement:
“By offering our customers high-quality, wholesome, and environmentally friendly food and beverage products that satisfy their changing needs, it is our mission to positively influence society and the environment. To achieve long-term success, we are dedicated to consistently improving our products, making investments in our employees, and conducting business ethically.”
5. Introduction:-
Caleb Bradham, a pharmacist in Newbern, North Carolina, invented the Pepsi formula in the 1880s. Caleb named his beverage “Pepsi-Cola” in 1898. As the popularity of his product increased, he founded the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903. Interestingly, the Coca-Cola formula was developed in 1886 in Columbus, Georgia by pharmacist John Pemberton. Asa Candler purchased the Coca-Cola formula and brand in 1889 and formed The Coca-Cola Company in 1892. In 1919, the Pepsi-Cola Company was formed in Delaware. A multinational corporation with a focus on the creation of food and drinks, PepsiCo. Purchase, New York, is home to the organization’s headquarters. It comes in just behind the Coca-Cola Company as the second-largest producer of carbonated soft drinks in the world.
Products / Services:-
More than 200 countries sell PepsiCo products, which the company is known for customizing to local preferences and cultures through innovation and change. A non-alcoholic malt beverage called Bario, for instance, is well-liked in Jordan, and Tropicana Pulp Sacs are well-liked in China. Outside of the United States, the company receives 50% of its revenue, and this number is rising. In Russia, India, the Middle East, Mexico, and many other emerging markets like Vietnam, the Philippines, and Thailand, PepsiCo is the largest food and beverage company. It also ranks second in Brazil and Turkey and is in the top five in many other emerging markets.
In North America, PepsiCo is the largest food and beverage company, having soft-drink brands that include Pepsi-Cola, Mountain Dew, and Diet Pepsi. PepsiCo also sells its Tropicana orange juice and Gatorade sports drinks brandsTropicana orange juice, Gatorade sports drink, SoBe tea, and Aquafina bottled water.
External Audit:
Beverage Industry
Forces driving competition in the carbonated soft drinks market in Canada, 2020
Buyer power: Moderate- Average buyers are substantial, which strengthens the negotiation stance and consequently improves its buying power. Significant merchants, like supermarkets, have more negotiating influence with producers since they can make large purchases.
Supplier power: Moderate- Due to the rising need for packaging that is more aesthetically pleasing to consumers and environmentally responsible, package makers are becoming more powerful. However, a significant input is water, and suppliers’ prices fluctuate raising concerns.
Degree of rivalry: Moderate- Since they both control 38.3% of the market, Coca-Cola and Pepsico are comparable in that they mostly serve the food and beverage sector. Due to increased competition, businesses are more likely to be impacted similarly by market changes. Low switching costs allow customers to change players without paying additional fees. Because of this, competition is increased.
Substitutes: Moderate- 100% juices, fruit-based drinks, and RTD iced tea/coffee are alternatives to carbonated soft drinks that offer a moderate threat.
New entrants: Weak- Due to reasonable capital investments and the existence of well-known brands, the threat of new entrants is moderate. A newcomer may succeed in the short term by emphasizing a distinctive production process or nutritional advantages.
Looking at a specific geography, it shows a clear understanding of where the overall industry stands which is not as strong as the overall outlook. I agree with the rivalry level of it being strong. Through the years of knowing Coca-Cola and PepsiCo, there has always been a partial difference which shows the intensity between the two. PepsiCo is stepping up their game by branching out to the snacks and food industry which is why they are moderate to strong.
External Factor Evaluation Matrix (EFE Matrix, EFEM)
Primary Implications from EFEM (Opportunities)
The EFEM for PepsiCo offers the business significant opportunities for future growth. PepsiCo has excelled in responding to increasing customer demand for healthier snacks and drinks choices, the rising need for online shopping, and the expanding relationship with Starbucks. It is also the leading food and beverage company in several countries that can give the business a substantial competitive edge, assisting in sustained growth and revenue. To retain its place as a market leader, the business needs to keep developing and adjust to shifting consumer preferences and market trends.
Primary Implications from EFEM (Threats)
The EFEM for Pepsico reveals significant dangers the company will face. The business will even suffer considerable financial setbacks as a result of certain countries taxing its goods, which will discourage price-conscious customers from making purchases. It will also experience sales dropping as the consumption of soda is continuously decreasing.
The overall EFE weighted score of 3.26 is higher than the median (average) of 2.5, demonstrating PepsiCo’s ability to evolve and thrive in a competitive economy by taking external opportunities and reducing threats from within. Since the highest total weighted score is 4.0, there is certainly space for improvement.
CPM Matrix
Primary Implications from CPM
When compared to its two rivals, Coca-Cola and Dr. Pepper, PepsiCo scores 3.21, being the second highest in the competitive profile matrix for all critical success factors. Compared to Coca-Cola, the business is much weaker when it comes to offering caffeinated beverages. However, In terms of new product development, advertising, social responsibility, and beverage alternatives, the company outperforms its two competitors.
Internal Audit:
Resource-based view
Pepsi’s secret formula is the most valuable resource that is unable to imitate and substitutable. This is the most important factor for PepsiCo in achieving and sustaining competitive advantage. Pepsi’s taste is a unique factor that made PepsiCo be predominant among its competitors.
PepsiCo purchased Tropicana Products in 1998 and acquired Quaker Oats Company in 2001. In 2011, the acquisition of Wimm-Bill-Dann Foods made PepsiCo the largest food and beverage company in Russia. Wimm-Bill-Dann Foods is a Russian food company that produces milk, yogurt, fruit juices, and dairy products. This acquisition enhanced PepsiCo’s advantages in the nutrition portfolio. This is a good business decision that expands the brand equity and reputation internationally. PepsiCo’s diversification in food and beverage made the company stand out from its competitors.
In May 2018, the acquisition of Bare Foods, Inc., a company that produces healthy fruit and vegetable snacks, is a good strategy for PepsiCo to diversify further into healthy and nutritious products. Because of the shift into healthy foods and beverages, the consumption of unhealthy snacks and carbonated soft drinks has been decreasing for the past years. By taking the initiative in developing healthy and nutritious products, PepsiCo gained a strong competitive advantage in the threat of consumers’ diet change in the future.
Competitive advantage in the industry
One of the most competitive advantages of PepsiCo in the industry is the firm’s diversification in food and beverage products. Most of the firm’s competitors, including Coke, Dr Pepper Snapple, Groupe Danone, Monster, etc… , only focus on producing beverage products. The diversification in the food industry has boosted sales and contributed to the firm’s revenue. Pepsico has the highest revenue of 63.5B and net income of 47.0B compared to the firm’s two biggest competitors – Dr.Pepper and Coke. One of the reasons is because most of PepsiCo’s revenues and growth come from the firm’s snack food business rather than its beverage.
Internal factor evaluation analysis (IFE Matrix)
Primary Implications from IFEM (Strengths)
By increasing its cash and short-term investments by 21%, Pepsico has increased its liquidity by the end of 2016. The business has a market capitalization that is ten times greater than Dr. Pepper’s and a net income that is higher than Coca-Cola’s ($47 billion). AMENA (Asia, Middle East and North Africa), one of PepsiCo’s divisions, had an increase in its operating profit from $619 billion to $1,073 billion in 2017. The company also had an increase of 10.9% global consumption for one of its products, Aquafina.
Primary Implications from IFEM (Weaknesses)
Gatorade, a product of PepsiCo that makes up 20% of the volume of the company’s beverages, had a 0.5% decline in sales to $5.9 billion in 2017; Along with Mountain Dew, having sales decline of 0.7% in 2016. Its largest revenue market segment, NAB, had a decrease in its operating profit from $2959B to $2707B in 2017. Overall, the company’s net income had a major decrease from $6329M to $4857M in 2017.
