Pepsico Strategy Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Analyse the food and beverages industry and how the five forces have affected PepsiCo and rivals and the impact on industry structure, attractiveness, and profitability.
- Analyse the various strategic business units in PepsiCo's portfolio and assess which ones are the stars and cash cows generating the most value, or the question marks, and dogs that may need further investment or divesting to achieve a balance of the portfolio.
- To apply strategy business models and frameworks such as Porters five forces and BCG matrix to real company cases.
Analyse PepsiCo company’s Porters Five Forces and BCG Matrix.
- See also, Pestle and Swot Analysis of PepsiCo 2017
1.0 INTRODUCTION
PepsiCo is an American based multinational corporation that is engaged in the manufacture, marketing, and distribution of a broad range of snack foods and beverage brands including the iconic Pepsi Cola, which was formulated in 1898 by a pharmacist who founded The Pepsi-Cola Company. It became PepsiCo in 1965 after a merger with Frito-Lay, Inc. PepsiCo owns 22 billion dollar brands, referring to individual brands each generating annual retail revenue in excess of US$1billion (Annual Report 2018). These include Pepsi-Cola, Frito-Lay, Doritos, Gatorade, Quaker, Tropicana etc. The company is headquartered in Purchase, New York.
The global beverage industry is dominated by two major players PepsiCo and Coca-Cola that account for over 60% market share of the global beverage market. Pepsi is one of world’s largest food and beverage companies having a 20.5% market share with a $63.53billion (Statista 2018) revenue and major competitor Coca-Cola having a 48.6% market share.