Case Analysis Of Pepsico

Zachary Hood

Case Analysis

PepsiCo.

1. PepsiCo. is the world’s largest snack and beverage company in the world as of 2013. However, when this case was wrote PepsiCo. was not the world leader in the snack and beverage company, it was second. PepsiCo. corporate strategy has diversified itself into many different categories, such as sweet and salty snacks, soft drinks, orange juice, bottled water, tea and coffee. They proceed with caution with which industries to enter or not to enter. If they decide they are going to enter a new market, they have to discuss the means of entry in this market. They use a lot of diversification, which helps them out a lot because they already have a foundation in the snack and beverage area. The company began to grow in 1968 with different acquisitions. PepsiCo. acquired Pizza hut in 1977, Taco Bell in 1978, and KFC and Mug root beer in 1986. These acquisitions have been very profitable for PepsiCo.

PepsiCo. is organized into four different business markets: Frito-Lay (North America), PepsiCo Beverages (North America), PepsiCo Beverages (International), and Quaker Foods (North America). The business strategy of Frito-Lay, the salty and sweet snack division, was to improve the core brands of the company by making them healthier and trying to maintain a superior taste. They also wanted to create new and tasty snacks. The wanted the goods to be convenient for the consumer, but healthy as well so that they can eat these salty snacks on-the- go. The business strategy of the North American PepsiCo. beverages wanted to be innovative. They want to provide carbonated and noncarbonated beverages of all times to different consumers. Their focus is on healthier drinks, such as flavor and vitamin ...

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...e in all market segments, try and capture a large market segment and maybe even try and expand into an unrelated diversification field. They need keep all their value chain and distribution the same as how they have it now. They could always try and reduce costs and try to increase profits. Their free cash flow should be split between two ideas. They are to fund other acquisitions and pay higher dividends. They need to continue to make the shareholders happy, so that they will keep investing in them. This will in turn allow PepsiCo. to keep growing and keep allowing to capture their market. Corporate management should let go of Quaker (North America) the business hasn’t grown much and has kind of died off. They should sell that and reinvest in another acquisition. They need to always be planning for the future and never be satisfied where they are at now.