PepsiCo

A REPORT

ON

PEPSICO Inc.

Student: Nguyen Duc Anh

CA7-010
CityU7D
 Table of content
Introduction 3
About the company 3
History 4
Products 5
Management Board 7
Organizational structure 9
Vision, Mission, Objectives 9
Achievement 10
Business decision and strategy 11
SWOT and PEST analysis theory 12
SWOT and PEST analysis adopted by 13
PepsiCo company
PEST analysis 13
SWOT analysis 15
Evaluation 21
Conclusion 21
References 22

2
PepsiCO

ABOUT THE COMPANY

Nowadays, Soft drinks seem to be the most

popular drink among young people especially
children and adolescents. One of the most
famous brands of this beverage is PepsiCo
Inc. PepsiCo was founded in 1965, by the
merger of two companies Pepsi-Cola and
Frito-Lay, led by Donald Kendall and Herman
Lay. Headquarter of PepsiCo is located in
Purchase, New York State, United State.

3
 HISTORY

1886
Pepsi was first invented and
1893 developed by Caleb Braham
Its first name was "Brad's Drink". who was a pharmacist in New
Bern, North Carolina, United
States.

1898
Brad's Drink was renamed
Pepsi-Cola because Pepsi
1902
referred to relieving indigestion
Pepsi-Cola corporation
and Cola meant the cola flavor.
established its headquarters in
Purchase City, New York State,
USA and registered the Pepsi- 1928
Cola. Pepsi was repeatedly bankrupt
and transferred in 1928 due to
the world economic crisis
1931 caused by the result of World
The company's brand and assets War I.
were acquired by Charles G. Guth
who was the president of Loft,
1965
Inc.
Pepsi-Cola merged with Frito-
Lay, Inc., maker of fast food
such as Fritos, Doritos, Lay's
1977-1998 chips and Rold Gold cookies to
PepsiCo merged with Pizza Hut, create PepsiCo.
Inc. (1977), Taco Bell, Inc. (1978),
Kentucky Fried Chicken Corp.
(1986), Seven-Up International
1998
(1986), Tropicana (1998). In 1998, PepsiCo celebrated
100 years and introduced a
new logo for the new
millennium – a sphere with 3
colors blue, white, red on a cold
Now blue background.
PepsiCo is one of the major
beverage corporations and a major
competitor of Coca-Cola.

4
 PRODUCTS

PepsiCo mainly operates in the food

and beverage industry with a wide
range of food and beverage products
with 23 brands including Pepsi,
Mountain Dew, Lay's potato chips
and so on. There are top global
brands of PepsiCo:

Pepsi Mountain Dew Lipton Tropicana

Gatorade Starbucks Aquafina Mirinda

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Diet Pepsi Diet Mountain Dew Pepsi Black 7up

Cheetos Ruffles Doritos Lay's

Fritos Quaker Tostotos Walkers

Source: PepsiCo brands

6
 MANAGEMENT BOARD

RAMON L. SEGUN AGBAJE ROBERT C. POHLAD

LAGUARTA Managing Director President of various
Chairman of the and Chief Executive family-owned
Board of Directors Officer of Guaranty entities; Former
and Chief Executive Trust Bank plc Chairman and Chief
Officer of PepsiCo Inc. Executive Officer of

PepsiAmericas, Inc.

DAVID C. PAGE IAN COOK EDITH W. COOPER

Professor, Former Chairman, Former Executive Vice
Massachusetts President and Chief President and Global
Institute of Executive Officer, Head, Human Capital
Technology; Former Colgate-Palmolive Management of The
Director and Company Goldman Sachs
President, the Group, Inc.
Whitehead Institute

for Biomedical
Research

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 DINA DUBLON MICHELLE GASS SIR DAVE LEWIS
Former Executive Vice Chief Executive Former Group Chief
President and Chief Officer, Kohl’s Executive Officer,
Financial Officer, JP Corporation Tesco PLC
Morgan Chase & Co.

CESAR CONDE SHONA L. BROWN DANIEL VASELLA

Chairman of the Senior Advisor to Former Chairman and
NBCUniversal News Google Inc. Chief Executive
Group Officer, Novartis AG

DARREN WALKER ALBERTO WEISSER

President, Ford Former Chairman
Foundation and Chief Executive
Officer, Bunge
Limited

Source: PepsiCo brands

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 ORGANIZATIONAL STRUCTURE

PepsiCo

Africa, Europe Frito-Lay PepsiCo Quaker Latin Asia

Middle North Beverage Foods America Pacific,
East, America s North North Australia/
South (FLNA) America America New
Asia (PBNA) (QFNA) Zealand,
(AMESA) China
(APAC)

VISION, MISSION, OBJECTIVES

PepsiCo’s vision: “Be the global leader in convenient foods and

beverages by winning with purpose” (PepsiCo, 2021).

PepsiCo’s mission: “Create more smiles with every sip and every bite”
(PepsiCo, 2021).

Objectives of PepsiCo : “Winning in the marketplace, being more

consumer-centric and accelerating investment for topline growth”
(PepsiCo, 2021).

9
 ACHIEVEMENT

Nowadays, PepsiCo is the third

largest company in the food and
beverage industry. PepsiCo has many
branches in more than 200 countries
and territories and has more than
291,000 employees worldwide
(Forbes, 2021).

PepsiCo generated more than $71

billion in net sales in 2021, driven
by the food and beverage
products combined with 23
famous brands in the world such
as Starbucks, Tropicana, Quaker
and so on.

It is estimated that more than a

billion products of the company are
consumed by customers in a day.
Those brands helped PepsiCo Inc.
generated more than $1 billion
each in estimated annual retail
sales (PepsiCo, 2021). PepsiCo Inc.
ranked #44 on the Fortune 500 list
(Fortune, 2021).

10
 BUSINESS DECISION AND
STRATEGY

Established in 1965, PepsiCo overcame many ups and downs to become one of the
leading companies in the food and beverage industry today.

One of the strategies to help PepsiCo achieve success is the SWOT and PEST
analysis strategy. The SWOT and PEST analysis model not only showed the
company's internal strengths and weaknesses, but also presented external
challenges and opportunities that could affect PepsiCo. In my opinion, PepsiCo
has successfully applied the above strategy to orient and develop the company's
business model, thereby creating many achievements and building a solid position
in the food and beverage industry.

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 SWOT AND PEST ANALYSIS
THEORY

According to Jim Woodruff (2019), PESTLE analysis including Politics,

SWOT analysis helps the company Economics, Society, Technology, Legal
identify internal strengths and and Environment that is applied to
weaknesses that can benefit or hinder assess external factors influencing
the outcome of a planned project. In before proceeding with a new project
addition to evaluating the company's or helping to analyze the market.
internal environment, this method can Unlike SWOT analysis, this strategy is
also identify external factors that can more direct to external macro
also make a difference to the success environmental factors that can affect
or failure of a project. your business's position, the reasons
behind the growth or decline of the
market, and also define new directions
for the entire business.

SWOT analysis considers both internal and external factors. It captures external
factors in the opportunity and threat section. However, it does not provide much
detailed information about external factors. Therefore, the company can ignore
some external factors that may affect the company. To access external factors, the
company should perform PESTLE analysis and use its results in the opportunities
and threats section of the SWOT analysis.

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 SWOT AND PEST ANALYSIS
ADOPTED BY PEPSICO COMPANY

PEST ANALYSIS
Before applying the SWOT analysis
strategy, PepsiCo would apply the PEST
analysis strategy to evaluate the factors
from the external environment. In this
way, PepsiCo would make the most of
the opportunities available to them and
be aware of the external threats that
may affect the company in the
international market.

According to Jallow (2021), Political factors are important PESTLE

analysis factors because they would directly affect the company's
business activities by legal and regulatory limitations. They can
bring advantages and disadvantages to the company. Today,
PepsiCo has more than 200 countries and territories with different
environments and political systems. That makes PepsiCo have to
carefully analyze those environments and systems, and thereby
provide business activities tailored to each place around the
world. For example, in the United States, the government enacted
a new law called a soda tax in 2015 to reduce people's
consumption of soft drinks. This directly affected PepsiCo's
revenue, forcing the company to think of ways to overcome this
challenge (Frue, 2018).

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Economic factors also affect the company's business such as
inflation, economic stability and taxes. The increase in product
prices is a result of inflation, which directly affects the revenue of
multinational companies like PepsiCo. For example, PepsiCo's
revenue fell 3% in the second quarter of 2020 due to increased
costs due to the impact of the COVID- 19 pandemic (Jallow, 2021).

Social factor is the understanding of the company's customers as

lifestyle, trends, culture, ethics (Frue, 2018). Nowadays, people
tend to consume healthy foods and drinks, PepsiCo realized the
above change and in order not to disappoint customers, PepsiCo
has been developing many beneficial products for health like Diet
Pepsi, Nutrition products and so on.
Not only cares about products, PepsiCo also cares about the
environment besides customers. During the COVID-19 pandemic,
PepsiCo had donated $60 million globally and $59 million in
funding to deliver food and important items to disadvantaged
areas of the world including medical equipment, protective gear
for medical staff, masks, COVID testing services and at the same
time, PepsiCo provided more than 100 million nutrition products to
places difficult by the pandemic (PepsiCo, 2021).

Technology factors affect competition between companies.

PepsiCo is leveraging state-of-the-art technologies related to
artificial intelligence, machine learning and digital bots for
advertising, research and development. They reach their young
customers through social apps like Facebook, Instagram, and so
on. In fact, there's no better way to connect with customers than
through online marketing. This helps the brand to be recognized all
over the world.

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 SWOT ANALYSIS
The food and beverage business environment is a potential environment, there are
many opportunities for the company to grow, but this is a highly competitive
environment. To be successful, the company must have a good business strategy in
human resource management and product management. In fact, the SWOT
analysis has been applied by PepsiCo to internally monitor the business, especially
the strengths and weaknesses such as production efficiency, consumer
satisfaction. In addition, changes in customer preferences, marketing competition,
price, government regulation, and sales are all identified as opportunities and
threats in the SWOT analysis. As a multinational company, PepsiCo needs to
clearly analyze the strengths and weaknesses inside the company, and face
external threats and opportunities to help the company have a sustainable
strategy, stable growth and compete well with other companies.

STRENGTHS

A enormous portfolio

The snack, food, and beverage

business is dominated by PepsiCo.
PepsiCo offers a wide portfolio of 23
brands, including numerous well-
known names such as Pepsi,
Mountain Dew, 7up, and others,
which enable the company to earn
$1 billion in annual retail sales
(PepsiCo, 2021).
Although PepsiCo originated from a beverage company, so far the company has
cooperated with many different brands to offer a variety of snack and food
products. That makes PepsiCo flexible, customers can freely choose products.
Therefore, PepsiCo's revenue has grown continuously.

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 Famous brand

Pepsi is famous in over 200 countries and

regions. Pepsi ranked #36 in World’s Most Value
Brands 2020 worth $18.2 billion, is the third
largest company in the beverage industry with
market share is $173.86(Forbes, 2021).

Thus, in the future, the company continues to set strategies as well as continues to
collaborate with many big brands, developing products to affirm its position in
beverage industry.

Loyal Customer

PepsiCo has a huge customer base.The majority

of customers (50.17%) come from age/ young/
teenager, and 50% of customers come from age
(older). This shows that the company has
succeeded in attracting customers from different
ages as well as different generations. To
continue to attract customers, Pepsi co has
created many flavors, many choices to suit
different types of customers.

Advertising and sponsorship

PepsiCo's advertising strategy is very clear

when it comes to focusing moreon underage
customers. PepsiCo sponsors many sports and
music events. That makes PepsiCo reach young
customers with their idols such as Lionel Messi,
Henry and others (Frue, 2018).
Besides, it ethusiasticlly collab with famous influencers to advertise through
social media like Youtube, Facebook and so on. That way, PepsiCo has covered
over 200 countries and territories, becoming one of the most famous brands in
the world (PepsiCo, 2021).

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 WEAKNESSES

Competition of Coca-Cola

The biggest competitor of pepsi is coca cola as

both of them are two largest companies directly
affecting beverage industry. They have been
competing for the similarity in soft drink since a
century ago.

Although PepsiCo was born later and is weaker than Coca-Cola in the beverage
segment, PepsiCo is better than Coca-Cola in snacks and food.

Unhealthy product

This is one of PepsiCo's biggest weaknesses.

Because the main ingredients of carbonated soft
drinks are mainly flavorings, sweeteners, CO2
gas, and preservatives, they are not good in
terms of nutrition. Especially the customers are
minors, they are likely to be obese and have type
2 diabetes.

Too dependent on the US market

Although there have been market expansions to

many countries around the world, so far 57% of
PepsiCo's revenue still comes from the US and
only 43% of international sales (Bhogaraju,
2020). Pepsi is creating a strategy to develop
new products suitable for different countries to
boost product revenue from international sales.

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 Products failure

As a well-known global brand, PepsiCo always

wants to offer new and unique products to every
customer. But not all products are successful. For
example, Pepsi Blue, Crystal Pepsi (Colorless
Cola drink), and others, these are product failures
that affect the company's image and revenue,
creating opportunities for other companies to
overcome (Ali Shaw, 2020).
Thus, the company has focused on developing healthy products, such as diet soda,
to regain the company's reputation.

OPPORTUNITIES

Research and development

Today with the development of technology, the

application of the most advanced technologies is
essential for every company.

PepsiCo invests in many product research and development projects. They apply
artificial such as Snack Delivery Robot intelligence to production line machines as
well as advertising. PepsiCo continuously improves technology to create an
advantage when competing with many competitors in the same industry and to
help customers experience the best products and services.

Expand international market

Continuous product development with strong

advertising campaign, PepsiCo has been present,
operating and having market share in nearly 200
countries around the world. PepsiCo focuses on
developing more widely in markets include Asia,
South America, Africa.

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 Partnerships

As a multinational company, it is very important

to have alliances and cooperation with many
brands. It helps PepsiCo approach, and satisfy
customer needs in many ways. In fact, PepsiCo
has 23 famous global brands, which helps to
increase revenue. This is an opportunity for
PepsiCo to surpass Coca-Cola in the competition
of the century.

Healthy product

Nowadays, people tend to consume healthy,

low-sugar, low-calorie foods and drinks,
avoiding obesity. Realizing that, PepsiCo
launches healthy products such as Diet Pepsi,
nutrition food, fruit milk, which are low-calorie
products, suitable for dieters and elderly
customers. Therefore, there is an opportunity to
attract more customers to bring in revenue for
the company.

Corporate social responsibility

Not only cares about products, PepsiCo also

cares about customers' society and emotions.
The company invests in many green projects,
protecting the environment and setting up many
funds to support difficult places.

For instance, during the COVID-19 pandemic, PepsiCo has spent $60 million and
provided more than 100 million nutrition products to help with medical operations
and relieve sick people (PepsiCo, 2021). Therefore, the company has received a lot
of attention from many partnership as well as customers

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 THREATS

Fierce competition

Food and beverage industry with fiercely

competitive prices while low margins. Besides,
the competition is especially strong among
global companies (Coca-Cola, Nestlé). Thus,
common risks are related to competitive prices,
advertising, sales promotion process and so on.

Government regulations

According to WHO, currently in the world there

are many children who are obese or have type 2
diabetes due to drinking a lot of carbonated soft
drinks, so the state will make regulations on
healthy nutrition for children. food and beverage
company. If nutrition cannot be improved,
PepsiCo may face a high threat from sugar tax
because most of the company's products are
high in calories and sugar.

Economic recession

The COVID-19 pandemic has severely impacted

the world economy, leaving many companies in
financial difficulty. Import and export stagnate,
countries close borders, so the company has to
face threats of lack of raw materials, scarcity of
goods, decline in customers and reduced
revenue. Pepsi's net profit fell about 43.23% in
2020 due to the pandemic (Ali Shaw, 2020).

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 EVALUATION
As can be seen PepsiCo has successfully applied the SWOT and PEST analysis
strategies. Through the above information, readers can clearly see how the
company's micro and macro environment is and how the company applies these
two strategies to its business plan.

After applying the SWOT analysis strategy, PepsiCo oriented, developed the
company's strengths, and overcame the weaknesses. That helps the company
achieve 2020 revenue of $70.37 billion, up 4.56% compared to 2019 (Forbes, 2021).
Besides, with the strength of having a diversified product portfolio with well-
known brands, PepsiCo has collected more than $1 billion in retail sales per year
(PepsiCo, 2021).

The macro environment also affects the company a lot. In fact, the COVID-19
pandemic caused PepsiCo's net profit to plummet 43.23% in 2020. But that did not
make PepsiCo difficult, the company spent more than $60 million and more than
100 million in nutrition products to help. people overcome the pandemic (PepsiCo,
2021). In addition, the pressure on customers' diets also caused PepsiCo's revenue
to decrease. To overcome that, PepsiCo has come up with many solutions such as
reducing sugar, producing a variety of reduced-calorie foods and drinks. That
caused PepsiCo's revenue to rebound in recent years.

CONCLUSION
After the above article, PepsiCo has effectively used the SWOT strategy and PEST
analysis effectively. The company has overcome its weaknesses and promoted its
strengths. In addition, there are opportunities that the company can look to and
some threats that can challenge the company's business from the outside. In my
opinion, PepsiCo will grasp upcoming opportunities and overcome challenges from
the external environment, becoming a leader in the beverage industry.

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