Strategic Analysis of PepsiCo - PowerPoint PPT Presentation

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Strategic Analysis of PepsiCo
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Strategic Analysis of PepsiCo

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    1. Strategic Analysis of PepsiCo Dominant Logic David Bright, Terra Christensen, Nicholas Papas, Arc Sims, Derrick Smith

    2. Introduction Methods Areas of concern Growth opportunities and competition Recommendations Acquisition

    3. Company Overview 2001 Total Revenue $27 Billion Net Income $2.7 Billion ROS 9.8% ROE 32.8%

    4. Company Overview Three divisions Pepsi Frito-Lay Quaker Oats Quaker acquired in 2001. Include the Gatorade sports drink brand. Analyzed only two of the 3 divisions. Pepsi in the non-dairy, non-alcoholic beverage industry and Frito-Lay in the salty grain-based snack food industry.Quaker acquired in 2001. Include the Gatorade sports drink brand. Analyzed only two of the 3 divisions. Pepsi in the non-dairy, non-alcoholic beverage industry and Frito-Lay in the salty grain-based snack food industry.

    5. Beverages Industry Overview Non-Dairy, Non-Alcoholic Pressures from Buyers Competitors Other information Entrants

    6. Snack Food Industry Overview Salty, Grain-Based Pressures from Buyers Substitutes Competitors Other information Entrants

    7. Competitive Positioning Differentiation Strategy Product packaging Product manufacturing Product innovations Marketing Examples such as coating both sides of the potato chip, special potato etc. Examples such as coating both sides of the potato chip, special potato etc.

    8. Core Competency Branding/Marketing Product Innovation Resources include brand equity, celebrity endorsements, institutional knowledge, propretiary knowledge Capablities special manufacturing process, keep and build brands.Resources include brand equity, celebrity endorsements, institutional knowledge, propretiary knowledge Capablities special manufacturing process, keep and build brands.

    9. Diversification Strategy Recent efforts Acquisitions Divestitures Joint Ventures Sobe, Quaker Oats Tricon Starbucks, NFL, lipton, suntory, empersa polarSobe, Quaker Oats Tricon Starbucks, NFL, lipton, suntory, empersa polar

    10. Strategic Conclusions Current strategies are working Areas of concern Growth rates (domestic and abroad) High competition Over diversified

    11. Alternatives Divestiture Acquisition R&D

    12. Divestiture Quaker Oats Appears to be poor fit Acquired for Gatorade Ready-to-eat meal industry is competitive and PepsiCo does not have experience in it Recall experience with TriCon Need to monitor whether Quaker Oats meets financial performance metrics Ready-to-eat meal industry is competitive and PepsiCo does not have experience in it Recall experience with TriCon Need to monitor whether Quaker Oats meets financial performance metrics

    13. Research and Development Be innovator Develop unique brand extensions Lead development of unique preservatives, additives, and packaging technology Olestra as a possible disruptive technology. Pouring cans for doritos etc.Olestra as a possible disruptive technology. Pouring cans for doritos etc.

    14. Acquisition Jones Soda Growing specialty, premium soda market niche Fits with PepsiCos core competency Can possibly be acquired for $10M NPV of $19M, with potential for nearly $50M Growing specialty, premium soda market niche Existing brand recognition in select markets with loyal customer base Product development and branding fits with PepsiCos core competency Can be acquired for $10M NPV of $19M, with potential for nearly $50M Growing specialty, premium soda market niche Existing brand recognition in select markets with loyal customer base Product development and branding fits with PepsiCos core competency Can be acquired for $10M NPV of $19M, with potential for nearly $50M

    15. Recommended Alternative Acquire Interstate Bakeries Corporation Portfolio of bread, bakery goods, and sugary snack foods,which uses many of the same distribution channels Recognizable, segment leading brands with Hostess and Dolly Madison

    16. Recommended AlternativeFinancials

    17. Thank you