PepsiCo Current Strategy Essay Example
PepsiCo Current Strategy Essay Example

PepsiCo Current Strategy Essay Example

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  • Pages: 4 (890 words)
  • Published: November 15, 2016
  • Type: Essay
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In order to increase market share and maximize shareholder wealth, PepsiCo was keep developing their corporate and marketing strategy. PepsiCo intend to beat Coca Cola and others competitor in all of the relevant industry in order to dominating the market. PepsiCo strategy can divided into several main fields. Unique organizational structure and experienced management

An experience top management team and stable organization structure can help an organization growing in a steady way. From the case study, we know that PepsiCo have hired experienced senior management employee, Indra K. Nooyi as their CEO whereby Nooyi have proven her ability and have a lot of experience in global and international company. Therefore PepsiCo believe that Nooyi have the ability to help them achieving their corporate goal. Besides that, PepsiCo also designed their own organizational structure by using three strategy


business units of PepsiCo Americas Foods, PepsiCo America Beverages and PepsiCo International to manage their global business by their product categories and geographical locations. These organization structure help PepsiCo to ensure that the information flow within the organizational in different product range and different geographic location more effectively and efficiency. (Page 42 P7) Product diversification and product innovation strategy

Unlike Coca-Cola just only focusing on carbonated coke product, PepsiCo diversified their product line from only cola market into others beverage market such as focused in the snack, breakfast food and nonalcoholic beverage market. This strategy help PepsiCo expand their market and reach more audiences to boost more sales and revenue. On other hand, PepsiCo also developing synergy between product categories with breakfast foods and juices, colas and salty snacks, and at the same time

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moving into the water and sport beverage markets. (Page 42 P3) Besides that, from the case study, we also know that PepsiCo keep innovate new product to satisfy consumers taste and meet changing demand of consumers. Due to nowadays consumers is more focusing on health issues therefore PepsiCo also innovate and developing some new product that can grab consumers taste. For example, PepsiCo have introduced of diet, free and zero colas as well as flavored water and energy drink. (Page 47 P6) Low-cost differentiation strategy

Due to PepsiCo is a global company which they supply their products to the entire world therefore PepsiCo have to mass manufactures their products in order to satisfying their customers. Therefore it is a huge cost with their production line, labor cost and other unnecessary cost. From the case study, we know that in years 1933, PepsiCo doubled the size of it bottle, charging on nickel to help them improve sales and gain market. This strategy also helped them to cut down more production cost. (Page 42 P2) Besides that, PepsiCo also trying to control their cost by decreasing their cost of goods sold. By decreasing other unnecessary cost PepsiCo can ensure that they can maximize their revenue and use their resources in others areas instead of unnecessary cost. This strategy was very effective where PepsiCo net profit has increased. (Page 41 P2) Marketing Strategy

Case study showed, PepsiCo used differentiation to attract and hold customers. PepsiCo used extensive advertising and promotional activities to build customer awareness. For example, PepsiCo used highly creative marketing method and develop catchy slogan to differentiate themselves with their competitors. (Page 43 P1)

Besides that, PepsiCo also used media strategy to attract customer eyeballs. For example they were promoting their product through TV ads, internet, radio and others print ads. They intend to attract younger consumers where PepsiCo was used YouTube and appealing web pages with the latest ads and product related games by web-related media. (Page 43 P3) Build confidences and positive brand image

From the case study, we also know that PepsiCo was trying hard to build their brand positive image to the public in order to increase consumer confidence and brand preferences by create a vision with extensive statements on sustainability, the environment, health and wellness and diversity. For example, PepsiCo has undertaken numerous project and alliances around the world, working with group as the Earth Institute at Columbia etc. Besides that, PepsiCo also increased use of recycled material and reduced materials used in packaging. (Page 47 P2) Logistic chain management

In order to spur PepsiCo own non-carbonated health and wellness products, which are often smaller-volume, slower-moving product, PepsiCo have offered to retake the ownership of its two largest bottlers. By this, PepsiCo desire to control their products supply chain in order accelerate the production speed and reduces more cost in the future. Besides that, this move also enable PepsiCo do not depend on third party so they can manage their logistic and supply chain in more effective and efficient way such as shorten the time of manufacture and so can accelerate the speed of distributing their products to the market. (Page 41 P5)

Global expansion and continuity growing PepsiCo keep expanding their market by continuity invest and expand their plant in

more country. This proven when PepsiCo opened new factory in China and plan to open five plant more in China. They plan to overtake Coke and dominate market in China. (Page 41 P3) Besides China, PepsiCo also increase their investment budget in Russia, Japan, India, Europe, Mexico and Latin America. PepsiCo intend to overtake Coca-Cola around the world so they can become a market leader in their industry. This strategy can maximize their shareholder wealth and reach more target market group with their expanding strategy.

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