October 21, 2018

Business Strategy & Analysis of PepsiCo

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In the context of modern business management, it has become imperative for any business organisations to lay emphasis on the development of effective business strategy. The business organisations have been focusing on the continuous development and modification of business strategies with the objective of increasing market share. Financial profitability can only be ensured if the market shares increases and revenue generation is ensured. The organisation like PepsiCo is no exception to these general rules of the business management.

PepsiCo has been focusing on the development of effective business strategy for ensuring the market penetration in the different areas of the globe. For ensuring the development of effective marketing penetration strategy, PepsiCo has been laying emphasis on the product proliferation. Through the process of product proliferation, the organisation has been offering different kinds of products with the objective of accelerating the growth of business revenue.  PepsiCo has been able to increase its market share through stretching its product lines thereby resulting in increasing operating income and revenue. In the year 2016, the organisation has been able to increase its financial profitability level through earning the approximation of 63 billion US Dollars. Due to the effectiveness of product proliferation strategy, the organisation has been able to offer an array of products starting from the food to beverages. Apart from Pepsi, other products like Lays, Mountain Dew, Diet Pepsi etc. have earned popularity amongst the products users. Keeping in mind the increasing level of health consciousness amongst the customers, PepsiCo has introduced Diet Pepsi with the objective of improving sales performance. In addition, the organisation has been able to augment and update the existing product portfolio. PepsiCo has been able to facilitate the attraction of the new customers as well as the customers of the rival companies. The strategy of increasing reach and promotions of existing products has helped PepsiCo in improving sales performance. In these ways, the organisation has been able to ensure the effective implementation of marketing penetration in different continents, such as Asia, Latin America and so on.

PepsiCo has been able to increase the level of business profitability through laying emphasis on the development of product. No product can be developed if the innovation is not given prime importance.  The innovation can be ensured through giving importance to the research and development related activities. Improving the quality of products has been given prime importance. PepsiCo has been able to increase its level of strength through bringing about improvement in the quality of food and beverage products. The role of organisational leadership cannot be denied when it comes to the matter of improving the quality of service and products. The continuous emphasis on the quality and innovation has helped PepsiCo in holding its market share in the market thereby resulting in improving business profitability. In addition, the organisation has been able increase the effectiveness level of business activities through making modification in the existing range of its products.

PepsiCo has adopted effective growth strategies in the context of global food and beverages industry. The organisation has been able to improve the effectiveness of its business activities through adopting effective cost-leadership strategy. PepsiCo adopted the strategy of offering its products affordable prices to the customers. The organisation has been able to lower its operating cost as a result of which, the financial performance of PepsiCo has been improved. On the hand, PepsiCo has focused on the differentiation of its products and services for increasing the reach to the customers. PepsiCo has been able to increase the sales volume of Lay’s potato chips because of the existence of reduced saturated fat elements. For developing the market, PepsiCo has been focusing on increasing the number of distribution networks worldwide. Expansion of supply chain strategy has been given prime importance as it has been proved as utilitarian in the growth of distribution networks regulated by PepsiCo. Cost minimisation and cost-efficiency have been give utmost level of importance for keeping the operating costs at balanced level.

The diversification strategy adopted by Indra Nooyi has helped PepsiCo in increasing market share worldwide. In US and India, the products like Tropicana, Mountain Dew etc. have gained popularity amongst the consumers thereby resulting in the facilitation of increment in sales. As a result, the organisation has been able to give a tough completion to its competitors like Coca Cola, Kellogg, Con Agra and so on. The competency with respect to the M & A (Merger and Acquisitions) have paved the way for PepsiCo for earning billions and billions of business revenue thereby resulting in improving business performance. The role of aggressive campaigns can be mentioned in this respect as it has played prominent role in increasing the effectiveness of its promotional activities.

The effectiveness of the procurement and infrastructure has helped PepsiCo in increasing the effectiveness of value chain activities. For improving the logistics related activities, the organisation has laid emphasis on the different aspects, such as pricing, production, deliverance and so on. Through improving storage and maintenance related facilities, the organisation has been able to improve the operational efficiency of organisation. For improving the service quality, PepsiCo has laid emphasis on the collection of feedback from customers through online mode.

Because of the changing dynamics and increasing level of growth in the consumer demand patter, PepsiCo can be able to increase its market share with the objective of acquiring leading position in market. However, it will have to decrease the over-dependence on Wal- Mart for increasing sales volume. For increasing net profit margin, PepsiCo needs to focus on the continuous modification of its strategies. The tastes and preferences of the consumers are ever changing. For keeping pace with the changing pattern and dynamics in food and beverage industry, PepsiCo needs to focus on increasing the brand awareness amongst the consumers. The effectiveness of distribution networks needs to be levelled up with the objective of improving sales performance. In this way, PepsiCo can be able to ensure competitive advantage over the industrial rivals.

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About Soham Roy 40 Articles
MBA in Human Resource Management, MA in Modern History with specialization in Modern Europe (1870-2000), HR Professional, Academic Writer