Pepsi Final
Pepsi Final
Pepsi Final
ON
STRATEGIC MANAGEMENT
OF
PEPSI COLA INTERNATIONAL (PUNJAB BEVERAGE)
PRESENTED TO:
SIR SHAHID TUFAIL
PRESENTED BY:
ADNAN HASSAN
FAISAL ABBAS
ZUBAIR AHMAD
SHAHEENA AKHTAR
TUBA SALEEM
2003-AG-3261
2009-AG-0148
2009-AG-0149
2009-AG-0042
2009-AG-0113
DEPARTMENT OF
BUSINESS MANAGEMENT & SCIENCE
DEDICATION
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We would like to dedicate this project to our parents who has given us opportunity
to study here in DBMS, and to our respected teacher who has given us a chance to
work on this project.
TABLE OF CONTENTS
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EXECUTIVE SUMMARY
HISTORY OF PEPSI COLA INTERNATIONAL
3
VISION STATEMENT.
MISSION STATEMENT.
IMPROVED MISSION STATEMENT.
5
2
4
5
SWOT ANALYSIS
6
EXTERNAL ENVIRONMENT ANALYSIS.
10
8- KEY EXTERNAL FACTOR ANALYSIS .
14
9- KEY INTERNAL FACTOR ANALYSIS ..
15
10ANALYSIS OF COMPETITORS PROFILE...
16
STAGE 2 (MATCHING STAGE)
11121314-
TOWS MATRIX
17
SPACE MATRIX..
18
IE MATRIX
20
GRAND MATRIX
22
STAGE 3 (DECISION
STAGE)
16-
QSPM OF PEPSICO
23
RECOMMENDATIONS & CONCLUSION.
25
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15-
ACKNOWLEDGEMENT
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EXECUTIVE OVERVIEW
Strategic management process consists of three stages: strategy formulation,
strategy implementation and strategy evaluation. The scope of the project is to
discuss the strategies adopted and applied by Pepsi Cola, Pakistan and also
decide which alternative strategy will benefit the firm most.
Moreover the project also discusses the analysis of competition, market growth and
trend, opportunity analysis and strategies for creating competitive advantage
adopted by Pepsi Cola Pakistan.
Purpose of this project is to study the strategies which Pepsi is doing in Pakistan
market for its products. Pepsi International is a world renowned brand. It is a very
well organized multinational company, which operates almost all over the world. In
Pakistan It also has proved itself to be the No.1 soft drink.
Now a days Pepsi is recognized as Pakistanis National drink. Pepsis greatest rival is
Coca Cola. Coca Cola has an international recognized brand. Cokes basic strength is
its brand name. But Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product packaging, is
successfully maintaining at No.1 position in Pakistan.
PepsiCo. At stage 1 in EFE, IFE have aggressive responses as well as strong
competitive position as compare to Coca Cola and Gourmet Cola that also indicate
that the PepsiCo. Is a market leader.
PepsiCo. At stage 2 in TOWS, SPACE, IE and GRAND strategy Matrix again have an
aggressive response which helps and identifies different strategies to choose and
implement.
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PepsiCo. At stage 3 in SPACE Matrix is good in for choosing the strategy of market
penetration that is to increase its market share through tie up with Major
Showrooms, Computer Centers & Restaurant and clubs.
Pepsis greatest rival is Coca Cola. Coca Cola has an international recognized brand.
Cokes basic strength is its brand name. But Pepsi with its aggressive marketing
planning and quick diversification in creating and promoting new ideas and product
packaging, is successfully maintaining is No.1 position in Pakistan. In coming future
Pepsi is also planning to enter into the field of fruit drinks. For this purpose it has
test marketed its mango juice in Karachi for the first time.
When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon
and lime drinks, which was established during 1968, in Multan. Pepsi introduced its
lemon and lime, Teem to compete with 7up. It successfully, after some years, took
over 7up, and this enhanced Pepsis profits and market share. In Pakistan, Pepsi
with 7up enjoys 70% of the market share where as the coke just has 20% markets
share. Now a days PepsiCo. Is focusing on youngsters best choice Mountain Dew as
a energatic soft drinks.
Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These
bottlers are Pepsis strength. Pepsi has given franchise to these bottlers. Bottlers
produce, distribute and help in promoting the brand.
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VISI N
MISSI N STATEMENT
Our mission is to be the worlds premier consumer products company focused on
convenient foods and beverages. We seek to produce financial rewards to investors
as we provide opportunities for growth and enrichment to our employees, our
business partners and the communities in which we operate. And in everything we
do, we strive for honesty, fairness and integrity.
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WEAKNESS:
PepsiCo. Does not enjoy the number one position at international level and is far away from leader Coca-col
in the international market. Pepsi target only young customers in their promotions not focusing different ag
One of the major weaknesses as in majority of companies is the lack of co-ordination between the
management and the worker. In short there is a weak point in their Human Resource
management. Workers feel that they are being exploited and are not given the
remuneration that they deserve.
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The decision making process in the company is highly centralized and the workers
feel that there
exists no proper authority existing in the firm. The salesmen feel Dissatisfied for
they are totally
powerless to make any decisions themselves In dealing with their buyers they have
not the
slightest authority to allow them any credit or discount.
OPPORTUNITY:
Company has brand equity in the eyes of customers, so its new Products can easily
penetrate in the market. The company may also diversify its business in some other
potential business. PepsiCo May tie up or liaison with major showrooms, computer
centers &Restaurant.
Noncarbonated drinks(Often a substitute for water) are the fastest-growing part of
the industry Catering to Health Consciousness of People. There is Lower entry
barriers due to presence of highly distribution system for other Pepsi products.
PepsiCo may focus on technological advancement & utilization of Internet promotion
such as banner, ads and keywords can increase their sales, and more computerized
Manufacturing and ordering processes can increase their efficiency.
THREATS:
Fake beverages by the name of PepsiCo are being supplied by unknown people.
Such activities really hamper the companys name and its brand originality. Above
all the fake beverages supplied are almost similar to the taste of the original
PepsiCo. brand and not everyone can decipher the difference between the original
and the fake product. This is in fact a great threat to PepsiCo. for unworthy people is
taking advantage of its brand name and spoiling its good name in the market
The greatest affect is on the revenue from the rural areas where mango drinks take
over. However this is one factor that PepsiCo cannot do anything about for it is not
in their hands. If the mango season is to come then it will and nothing can be done
about it.
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The main competitor of the company is the Coca Cola. At the international level,
PepsiCo.
has a very strong competition with Coke. Coke has started its
advertisements more effectively to increase their demand and it is a very strong
threat for Pepsi. Cola drinks are not good for the health so the awareness level of
the people is in creasing which is a big threat to the company.
SW T
STRENGHTS:
Strong Multinational (Brand Equity)
Strong & Vast Distribution Channels
Lack Of Capital Constraints
Record Market Share
Strong Brand Portfolio
Aggressiveness In The Market (Market Leader)
Brand Promotion & Sponsorship
WEAKNESS:
Targeting Only Young Customers
Political Franchises
Centralized Decision Making
Decline In Taste
Motivational Factor
Not All Products Bear The Company Name
OPPORTUNITY:
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THREATS:
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EXTERNAL ENVIRONMENT
The macro environment consists of the larger societal forces that affect the
microenvironment. The external factors are not under the control of the strategists;
they can just observe them and make strategies in light of these factors. Some of
these factors are given below:
Demographic Factors:
Age
The requirements of different age groups are different. PepsiCo. should target that
age group that consumes it the most and make promotional strategies according to
their behavior. So their main target is the young generation.
Education
A company has to make promotional strategies keeping in view the customer level.
If the percentage of education is high in a country then through advertisements
people can be made well aware of their product and can convey their message
easily. Promotion and education has a direct relationship.
Population Distribution
Population distribution means how much population lives in urban areas and rural
areas. In Pakistan 35 % population resides in urban areas and 65% population lives
in rural areas. PepsiCo. is focusing on urban areas as people there are more inclined
towards such beverage while people in rural areas are more inclined drinking lassi
and desi drinks.
Population Density
It means number of people in one square km per area. Punjab has the largest
population density as compare to other. Pepsi sales are more in Punjab as compared
to the sales in other provinces.
Economic Factors:
Income and Income per Capita
If the income level or per capita income of the people increases, it will have a
positive effect on the consumption of Pepsi.
Inflation
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If the country faces inflationary trend in the market, the price of the Pepsi will
ultimately increase which will lower its demand.
Consumption Behavior
Pakistan is a consumption oriented society. Due to demonstration effect the people
are more inclined towards consumption than saving. So the people of Pakistan spent
heavily on food items. Hence Pepsi has a good market share in the present
circumstances.
Income Distribution
It means how much is in the hands of rich and poor class. In Pakistan 10% rich
people posses 93% of wealth and 90% people posses 7% of wealth. If there is
balanced distribution of income in the country, the consumption of the people will
increase hence increasing the sales of beverages as well.
Payment Mod
As the use of plastic money is increasing the consumption pattern of the people are
increasing. Although it will have a low affect on the consumption of Pepsi.
Employment Opportunities
As employment opportunities increase the living standard of the people increase
and the people consume more.
Aggregate Demand
In case of Pepsi, aggregate demand of the product increases in the season of
summer as the hot weather makes the consumers want to drink more.
Aggregate Supply
In summer season to cope up with the increasing demand they have to increase the
aggregate supply of their product.
Economic Policies
Some of the economic policies which can affect the market of Pepsi are discussed
below:
Fiscal Policy
It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise
having negative affect on its consumption.
Monetary Policy
Monetary policy is made to restrict or increase the supply of money in the
market. If policies are made to restrict the flow of money in the market, inflation
can be controlled hence increasing the real income of the people which will
ultimately affect the consumption of Pepsi.
Price Policy
If price of Pepsi is increased its demand will decrease and vice versa.
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Income Policy
If income of the people will increase their purchasing power will increase and
hence increasing the market share of Pepsi.
Physical Factor:
Region
Pakistan is divided into different geographical regions. Marketing and sales of Pepsi
is different in different geographical regions. In hot areas its demand is more.
City Size
The cities which are densely populated the consumption of Pepsi is more.
Climate
Pepsi is more suitable for humid or hot weathered countries like Pakistan. It is a
source of refreshment when a person is thirty due to the hot weather.
Infrastructure
Roads are the basic need for transportation of Pepsi from one place to another.
Pepsi cannot open factories in every city of Pakistan so it has to transport it to other
cities where Pepsi is demanded.
Electricity is the basic necessity for production of any product. Constant load
shedding slows down the process of production which leads to less production and
low market share.
Technological Factors:
Research and Development
Through research and development quality of the product can be improved or better
techniques or machinery can be developed which can increase the production.
When technology is advance the supply of the product increase hence the company
experiences growth in their business.
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those countries which are politically stable where they have no fear of decline in
their market share or shut down due to sudden change of government.
Mixed Economy
In mixed economy government and private sector both plays their role in
developing the economy of the country. Investment by foreign companies like Pepsi
is more likely to flourish in mixed economy.
Laws Formulation
Government has given copy rights to Pepsi so that another company cannot sell
their product by the name of Pepsi. The countries where laws are formulated, the
strategies and activities of the company are different.
Social Responsibility
Pepsis social responsibility is to provide its customers with clean and hygienic
product so to do this they have increased the use of disposable bottles.
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Media
It is a very important factor for marketing. Media these days is a very effective way
of inspiring people to buy a specific product. A good promotion can boast up sales
to a great extent.
0.09
0.36
0.11
0.07
0.09
0.06
3
3
3
1
0.33
0.21
0.27
0.06
0.07
0.14
0.14
0.12
0.1
0.05
0.1
3
4
2
2
2
0.42
0.48
0.2
0.1
0.2
2.77
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Opportunities
PepsiCo New Products Can Easily Penetrate In
The Market.
Noncarbonated Drinks Are The FastestGrowing Industry
Demand Of Pepsi Is More Than Of Competitor
Changing Social Trends (Fast Foods)
Internet Promotion And Ordering Processes
May Tie Up or Liaison With Major Computer
Centers &Restaurant
Threats
Non-Carbonated Substitutes (The Mango
Season)
Beverage Industry Is Mature
Fake Products (Imitators)
Competitors Schemes
Strong Competition With Coca-Cola Company
Total
Weigh
t
Total
Rat Scor
e
e
Scoring Method:
List The Key External Factor
Assign Weight To Each (0 To 1.0)
Result:
2.77
(Aggressive)
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Weaknesses
Targeting Only Young Customers
Political Franchises
Centralized Decision Making
Decline In Taste
Motivational Factor
Not
All
Products
Bear
The
Company Name
Total
Weig
ht
Rate
Total
Score
0.11
0.33
0.09
0.07
0.1
0.06
4
3
4
3
0.36
0.21
0.4
0.18
0.07
0.12
3
4
0.21
0.48
0.09
0.06
0.05
0.09
2
2
2
1
0.05
0.18
0.12
0.1
0.09
0.05
0.04
0.08
2.79
Scoring Method:
List Key Internal Factors (Strengths & Weaknesses)
Assign Weight To Each (0 To 1.0)
Firms Current Strategies Response To The Factor: How Well Firms Response
To These Factors (Effectiveness Of The Firm).
Major Weakness
1
Minor Weakness
2
Minor Strength
3
Major Strength
4
Multiply Each Factors Weight By Its Rating
Result:
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Score 2.5Aggressive
Score 2.5Defensive
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2.79 (Aggressive)
CRITICAL SUCCESS
FACTORS
Plant Location
Strong Brand Image
Large
Marketing
Resource
Budget
Market Share
Product Taste
Production Capacity
Innovation
Control over Supply Chain
Availability
Advertising
Bottling Investment & Empty
Mgt
Personnels
Total
Total
Total
Total
Weig Rat Scor Rat Scor Rat Scor
ht
e
e
e
e
e
e
0.07
3 0.21
1
2
0.14
0.07
0.11
4 0.44
3
4
0.44
0.33
0.09
0.12
0.09
0.07
0.11
0.06
0.11
0.1
3
4
3
4
3
3
4
3
0.27
0.48
0.27
0.28
0.33
0.18
0.44
0.3
0.27
0.24
0.36
0.21
0.33
0.18
0.33
0.3
0.03
0.04
1
3
3
0.09
0.12
3.29
0.09
0.12
2
1
3
1
2
2
1
1
0.18
1
2
0.03
2.5
0.12
0.27
0.07
0.22
0.12
0.11
0.1
0.08
1.49
Scoring Method:
List Key Internal And External Critical Success Factors
Assign Weight To Each (0 To 1.0)
Firms Current Strategies Response To The Factor: How Well Firms Response
To These Factors (Effectiveness Of The Firms).
Major Weakness
1
Minor Weakness
2
Minor Strength
3
Major Strength
4
Multiply Each Factors Weight By Its Rating
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Result:
The Strengths-Weakness-Opportunities-Threats
(TOWS) Matrix
Strengths
T WS Matrix
Opportunities
1. PepsiCo New Products Can
Easily Penetrate In The
Market.
2. Noncarbonated Drinks Are
The Fastest-Growing
Industry
3. Changing Social Trends
(Fast Foods)
4. Demand Of Pepsi Is More
Than Of Competitor
5. May Tie Up Or Liaison With
Major Showrooms,
Computer Centers
&Restaurant
6. Internet Promotion And
Ordering Processes
S-O Strategies
1. Decline In Taste
2. Targeting Only Young
Customers
3. Not All Products Bear The
Company Name
4. Motivational Factor
5. Political Franchises
6. Centralized Decision
Making
W-O Strategies
S1,S2,S3,O2,O3,O4
Company Can Introduce
New Product Or NonCarbonated Drinks
Because It Have Good
Brand Equity, Large
Resources
W2,O2
By Introducing NonCarbonated Drinks Pepsi
Can Capture Different Age
Groups.
S4,O5,O3
By Having Good
Distribution Channel Co.
Can Focus Easily Fast
Food Restaurants,
Clubs.
Threats
1. Non-Carbonated
Substitutes (The Mango
Season)
2. Fake Products (Imitators)
3. Beverage Industry Is
Mature
4. Strong Competition With
Coca-Cola Company
Weaknesses
S-T Strategies
S4,S5,T1,T3
Because Co. Has Financial
Recourses And Distribution
Channel Therefore It Can
Produce Non-Carbonated
Drinks.
W-T Strategies
W1,T3
By improving the taste &
quality company can
reposition its products can
take long term position on
maturity stage.
Critical region:
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SO Strategies (Strength-Opportunities)
An Important Tool to Develop Four Types of Strategies:
SO Strategies (Strength-Opportunities)
2.
3.
4.
5.
6.
Mean= -2.75
-3
-2
-2
-4
Mean= +4
+5
+4
+3
Mean = +3.75
+5
+3
+4
+3
-2
Mean = -2.33
-2
-3
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1.
CA + IS =
FS+ES =
+1.0
+1.67
Aggressive
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IFE
2.79
Strong
4
score
Average
3
Weak
2
II
III
Invest
Invest
Hold
High
The EFE
Total
Weighte
d Score
IV
Medium
2
Low
Invest
V VI
Hold
Harvest
VII VIII IX
1
Hold
Harvest
Divest
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This is also an important matrix of strategy formulation frame work. Grand strategy
matrix it is popular tool for formulating alternative strategies. In this matrix all
organization divides into four quadrants.
Quadrant 1
It contains that companys strong having competitive situation and rapid market
growth.
Firms located in quadrant 1 of the grand strategy matrix are in an excellent
strategic position. PepsiCo must focus on current market and appropriate to follow
market penetration, market development
And products developments are appropriate strategies.
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Market Development
Market Penetration
Product Development
Backward, Forward, Horizontal Integration
Related/Concentric Diversification
Limitations
Requires intuitive judgments and educated assumptions
Only as good as the prerequisite inputs
Only strategies within a given set are evaluated relative to each other
Advantages
Sets of strategies considered simultaneously or sequentially
Integration of pertinent external and internal factors in the decision making
process
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QSPM Matrix
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Results:
From the above matrix it is concluded that PepsiCo. Should adopt the 2nd
strategy that is PepsiCo may tie up Or Liaison with major showrooms, &
restaurant and different clubs
Conclusion:
From all the above discussion it is concluded that PepsiCo. Should go for market
penetration that is to increase its market share through tie up with different
restaurants & clubs as well as continue or go with its already adopted strategies
such as increase its share through huge advertisement and through sponsoring
different events such as PepsiCo. Continuously sponsoring cricket matches at
national and international level. From above the score of both strategies are very
close to each other so PepsiCo. It May also take both of the strategies as well.
General Conclusion
We come to the conclusion that the marketing strategy of Pepsi Cola is
working for them and the product is gaining popularity among youth day by
day.
Recommendations
After completing our project we have concluded some recommendation for
the Pepsi cola company, which are following.
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