Strategic analysis of PepsiCo. 2023 Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Use strategic tools including PESTLE, SWOT, Porters Five Forces, and VRIO to analyze a company's strategic position in the market and strategize on how to strengthen it
- Understand the broad macro-environment and how it affects the growth and performance of PepsiCo
- Understand how a company can use its resources and capabilities to strengthen its position in the market
1.0 INTRODUCTION
PepsiCo. Inc. is one of the leading food and beverage companies worldwide. The company manufactures, markets, distributes, and sells beverages, foods, and snacks. The food and beverage giant has a complementary portfolio of brands Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. The company operates through a number of segments namely; Frito-Lay North America’ Quaker Foods North America, North America Beverages, Latin America, Europe Sub-Saharan Africa, and Asia, Middle East, and North Africa. As of 2023, the company had a revenue of $22.3 billion up from $88.3 million in 2022 and $79.4 million in 2021. (Annual Report 2023) .The Company has its headquarters in Purchase, New York.
This report will use PepsiCo to examine the macro and micro environmental changes in the global beverage industry. The report will use frameworks such as PESTLE, SWOT, Porter's Five Forces, VRIO, and generic competitive strategies. The report will provide a strategic overview of the company, comprising its financial performance, competitive microenvironment, competitive advantage, technological improvement, and pricing strategy, among so many others.
Key questions answered in this analysis were, what are the key success factors of Pepsi? What are the company’s strengths and weaknesses? What are the threats of PepsiCo?
Industry Overview
The global beverage industry is a dynamic and rapidly growing sector that includes non-alcoholic and alcoholic drinks. It encompasses various subsectors like soft drinks, coffee, tea, bottled water, beer, wine, and spirits. Factors such as shifting consumer tastes, health and wellness trends, and technological advancements drive the industry's growth and innovation.
The global beverage industry is dominated by two major players that are PepsiCo and Coca-Cola which account for over 60% market share of the global beverage market. Pepsi is one of the world’s largest food and beverage companies with a market share of 25.6% with a revenue of $22.3 billion. Pepsi’s major competitor is Coca-Cola.