AmbassadorMorning9529
Answer the following questions based on the information below:- …
Answer the following questions based on the information below:-
1. Discuss in detail how recommended solution of PepsiCo would be implemented and related issues in this process. Here you should keep in mind action plans needed in management, marketing, operations, R & D, management information system (MIS) and finance aspect like budgets and financial projections for at least three years.
Recommended Solution:
Quantitative Strategic Planning Matrix (QSPM)
The Quantitative Strategic Planning Matrix contrasts two different approaches that PepsiCo may find to be its best course of action in the future. The first strategy calls for Pepsico to diversify into a healthier snacks and beverages segment in order to enhance its current products. Increased investments in R&D are the focus of the company’s second strategy. On a scale from 1 (not attractive) to 4, each company’s strength, weakness, opportunity, and threat are rated in relation to both strategies. (highly attractive). If the strategies are not applicable to the factors, they receive a score of 0. The other strategy, however, requires a rating as well if the first one has.
Strengths Diversifying healthier Increased
Snacks & Beverages Investment in R&D
Weight AS TAS AS TAS
1. PepsiCo is the second largest carbonated soft drink maker in the world 0.09 3 0.01 3 0.03
2. In North america, PepsiCo is the largest food and beverage company 0.08 0 0.02 1 0.21
3. Pepsico’s products are available in more than 200 countries 0.05 1 0.00 0 0.11
4. Twenty-two of PepsiCo’s product have generated retail sales of more 0.04 2 0.01 2 0.32
5. PepsiCo is diversified , owning Frito-lay the largest salty snack 0.05 1 0.03 3 0.13
provider in the United States, and Quaker foods
6. PepsiCo has increased its annual dividend for over 21 consecutive years 0.02 0 0.02 2 0.19
7. The acquisition of bare foods fits into PepsiCo’s strategy to diversify 0.03 2 0.01 1 0.22
further into healthy and nutritious products
8. Flavored and enhanced water, ready to drink coffee, sparkling water 0.04 2 0.24 0 0.12
9. Strong marketing and advertising of products around the globe 0.05 3 0.12 2 0.25
10. Competent workforce 0.04 1 0.11 3 0.39
Weaknesses Diversifying healthier Increased
Snacks & Beverages Investment in R&D
Weight AS TAS AS TAS
1. PepsiCo’s Gatorade brand whole sales in the United States declined 0.08 2 0.02 0 0.22
0.5% to $ 5.9 Billion in 2017.
2. In 2017, PepsiCo’s revenue declined 23% compared to the 0.07 3 0.01 3 0.32
previous year.
3. PepsiCo’s largest market segment, North American Beverages ( NAB). 0.05 1 0.03 1 0.03
4. Carbonated soft drinks and fruit drinks industry is declining in sales. 0.05 0 0.21 2 0.02
5. The rise of online shopping has affected impulse buying which is the 0.03 1 0.34 3 0.01
bad news for PepsiCo.
6. PepsiCo derives most of its revenues and growth from its snack food 0.02 3 0.12 1 0.09
business rather than its beverages.
7. High Debt 0.03 3 0.19 0 0.33
8. Lack of product focus 0.04 2 0.30 2 0.15
9. Health issue 0.05 1 0.36 1 0.28
10. High operating expenses. 0.04 0 0.11 3 0.37
Instead of increasing their investments in R&D, PepsiCo should diversify more into the market for healthier snacks and beverages. As a result, the business should make investments in its research and development division to improve its products, make them more distinctive, and promote loyalty among customers.
Strategic Conclusion:
The best strategic course of action, as determined by the analysis of PepsiCo’s internal and external factors, is to diversify into healthier snacks and beverages, increasing investments in Research and Development. This strategy will assist PepsiCo in adapting to the growing online shopping trend and shifting consumer preferences.
Customer’s demand for healthier food and beverage options rises as they become more health conscious. PepsiCo can meet this demand by broadening its product line to include healthier snacks and drinks, which will increase sales and customer satisfaction. This tactic also reduces the risk of relying on conventional carbonated soft drinks and unhealthy snacks, whose sales are on the decline. By providing healthier alternatives, PepsiCo can maintain its market share and boost its competitiveness in the food and beverage sector.
PepsiCo can fuel innovation and create new products that serve customers evolving needs and preferences by investing more in R&D. This investment will also help the company stay ahead of the competition by continuously improving its existing products and identifying new market opportunities. Furthermore, investing in R&D can lead to the development of more sustainable and environmentally friendly packaging solutions, which can help improve the company’s reputation and appeal to environmentally conscious consumers.
Companies like PepsiCo must have a strong online presence because the rise of online shopping has changed how consumers buy products. PepsiCo can reach more customers and boost sales by increasing its online presence. Additionally, by using this strategy, the business is able to gather crucial customer information that can be used to modify marketing campaigns, improve customer service, and guide the development of new products. In a retail environment that is rapidly changing, PepsiCo can strengthen its brand and promote growth by embracing e-commerce and digital marketing channels.
PepsiCo can meet the evolving needs of customers, maintain its competitive edge, ensure sustained growth and revenue, and adapt to the constantly changing market trends by diversifying its product portfolio, increasing Research & Development investments, and expanding its online presence. By putting these strategies in place, the company will be better positioned to capitalize on emerging market opportunities, address potential threats, and continue its success in the food and beverage industry.
Recommendations:
Recommendation Year 1 Year 2 Year 3 Total
1 Innovation in sustainable packaging
To lessen its environmental impact and attract customers who care about the environment, PepsiCo should develop more environmentally friendly packaging options.
2 brands * 100T extra = $2000,000.00
25 brands * 100T extra = $2,500,000
3 brands* 100T extra = $3000,000
1 brands * 750T extra =$7,500,000
2 Enhance Partnerships
Improve distribution efficiency by working together with important partners like retailers and suppliers to develop joint marketing initiatives.
1 brands * 100T = $1,000,000
1 brands * 150T extra= +$1,500,000
2 brands * 100T extra= $2,000,000
45 brands*100T extra =$4,500,000
3 Create alcohol-free beverages.
To satisfy the rising demand for healthier options, increase the selection of non-alcoholic beverages, including ready-to-drink teas, coffees, and functional drinks.
$3,500,000
$ 4,000,000
$ 4,500,000
$12,000,000
4 Increase supply chain effectiveness
To optimize the supply chain, cut costs, and improve sustainability, invest in technology and process upgrades.
$ 1,500,000
$2,000,000 $2,500,000 $6,000,000
5 Encourage corporate social responsibility.
Increase spending on CSR programmes to improve brand recognition and promote stakeholder and customer trust.
$1,000,000
$1,250,000 $1,500,000 $3,750,000
6 Using data analytics to inform decisions
Make data-driven decisions by utilizing advanced data analytics to better understand consumer preferences and to optimize marketing initiatives.
$1,500,000
$2,000,000 $2,500,000
$6,000,000
7 Improve programmes for employee development
To draw and keep top talent, increase employee satisfaction, and enhance overall company performance, invest in employee training and development programmes.
$1,000,000
$1,250,000 $1,500,000 $3,750,000
8 Changing to more nutritious snacks and drinks $10,000,000 $12,000,000 $15,000,000 $37,000,000
9 Boost R&D expenditures $5,000,000 $6,000,000 $7,000,000 $18,000,000
10 Increasing online presence $3,000,000 $3,500,000 $4,000,000 $10,500,000
$47,500,000 $36,000,000 $43500,000 $109,000,000
Recommendations Overview:
The SWOT and QSPM, which contain the weighted factors to support the importance of the recommendation, were used to derive the recommendations for diversifying healthier snacks and beverages and increasing investment in research and development.
One of the most significant recommendations for PepsiCo is to increase funding for the research and development divisions in order to expand and enhance the company’s current brands and products. Other recommendations include developing innovative sustainable packaging, strengthening partnerships, developing alcohol-free beverages, improving employee development programs, encouraging corporate social responsibility, using data analytics to inform decisions, and increasing R&D spending.
For the company to improve its commitment to innovation and sustainability, it should also invest more in improving the company’s sustainable packaging, hire a Data Officer to help manage it, and develop an employee development programme.
To put all of these recommendations into action, a total of 109 million dollars would be needed; some would take three years to implement, while others would only require two.
