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Primary Question for PepsiCo. Can PepsiCo continue their strong performance in the North America market, and also strengthen their presence in developing markets, while at the same time responding to changes in consumers’ preferences?. Secondary Questions.

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Primary question for pepsico
Primary Question for PepsiCo

Can PepsiCo continue their strong performance in the North America market, and also strengthen their presence in developing markets, while at the same time responding to changes in consumers’ preferences?


Secondary questions
Secondary Questions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?







Secondary questions1
Secondary Questions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?


Us liquid refreshment market
US Liquid Refreshment Market

Pepsi trailing Coke in large but negative growth carbonated soft drinks. Also little presence in high growth energy drinks. Possibly look to acquire Red Bull.

Pepsi dominating in the rapidly growing non-carbonated beverage categories which position it well in North American market as consumers look for healthier drink options.


Salty snack food industry key trends
Salty Snack Food Industry – Key Trends

  • Due to these 3 key industry trends, PepsiCo started developing new flavors of salty snacks, using healthier oils in chips, & packaging snacks in smaller bags.

  • PepsiCo should differentiate its products while staying committed to the industry trends.


Frito lay s commitment to industry trends
Frito Lay’s Commitment to Industry Trends

  • Eliminating trans fats & acquiring Flat Earth showed FLNA’s commitment to the publics growing awareness of nutritional content.

  • Introduction of new chip flavors was a commitment to the indulgent snacking trend.

  • Did these commitments to industry trends help or hurt PepsiCo’s market share of convenience food?


U s convenience food market share
U.S. Convenience Food Market Share

  • PepsiCo is the leading manufacturer in the market due to its commitment to industry trends.

  • Their only close competition seem to be from Kraft Foods & Hershey. But you cannot count out the 37% of the market that “other” manufacturers currently have.


Pepsico s international salty snack food market share by country
PepsiCo’s International Salty Snack Food Market Share by Country

There is significant growth opportunity in international markets. PepsiCo will need focus on gaining more market share in the top 3 markets in 2010. They will also benefit from an increase in servings per month in both developed and developing international countries.


Secondary questions2
Secondary CountryQuestions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?




Secondary questions3
Secondary CountryQuestions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?


Cereals hold third largest market share in N.A. (14%) with projected growth

Strong international sales results in both product lines

58% market share in N.A.

Organic options and healthy alternative for breakfast – aligned with consumer preferences

Sales are declining

Business are not aligned with core business strategy

Products are not aligned with healthy social trends

Conclusion – Sell Aunt Jemima and PastaRoni/Rice-A-Roni product lines. Continue to customize Cereals, Oatmeal and Quaker Oats products to meet consumer preferences in each market.


Pepsico beverage portfolio
PepsiCo Beverage Portfolio projected growth

Carbonated Drinks

Pepsi

Mountain Dew

Fruit Juices Bottled Water

Energy drinks

SoBe Energy Drinks – hold negligible market share

Tropicana

Aquifina

Opp to acquire Red Bull

Gatorade

Isotonic Sports Drinks

Analysis: Red Bull holds 40% market share for energy drinks. PepsiCo lacks a real player in this growing market. – Acquisition target


Secondary questions4
Secondary projected growthQuestions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?



Secondary questions5
Secondary projected growthQuestions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?


Pepsico international markets
PepsiCo International Markets projected growth

Great opportunity for growth in both developed and developing international markets, especially Brazil and China. Strong market share in many today, with exception of China

2. Pepsi should be focused on growing market share in China Salty Snacks, predicted to be largest market by 2010.

3. Power of One strategy could play well in international markets.


Quaker foods brands
Quaker Foods Brands projected growth

With exception of Gatorade, Quaker brands have limited success internationally.

Opportunity for growth in US and developed countries as consumers shift to eating healthier.


Quaker foods north america
Quaker Foods North America projected growth

Many Quaker Foods brands have strong market share, but not in the salty food or beverage markets. Majority of brands compete in Ready to Eat Cereal space, against well-established competitors Kellogg’s and General Mills.


Secondary questions6
Secondary projected growthQuestions

  • What has enabled PepsiCo to grow to be the world's largest snack and beverage company?

  • How is the performance of PepsiCo's current product portfolio?

  • What does the success of PepsiCo's industries look like long term?

  • What actions could PepsiCo take to better position its portfolio?

  • How is Pepsi structured and what are the relative performances of those divisions?

  • What does the success of PepsiCo's divisions look like long term?

  • What actions could Pepsi take to better focus the structure of the organization towards high growth markets?


Pepsico after 2008 realignment
PepsiCo after 2008 Realignment projected growth

Appears goal of realignment of divisions was to put more focus on growth outside North America.

Question we have is did PepsiCo go far enough? Does not appear to be much of a change.



Question facing pepsico
Question Facing PepsiCo projected growth

DOES


Recommendations
Recommendations projected growth

  • Look to acquire an energy drink company (i.e. Red Bull) , stick with formula that has worked in the past…

  • Divest parts of Quaker Oats brand that do not fit into PepsiCo’s success formula (i.e. Pancake & Cereal Brands)


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