ACME GROUP

Ahtisham Mughal

M.COM (Accounting & Finance)
University of Central Punjab

Submitted to Sir Salman Aqeel

2014




[PROJECT]





ACKNOWLEDGEMENT
I am thankful to Almighty ALLAH most beneficent and the most Merciful Who made me
able to complete my given project successfully and for giving me much cooperation and
supporting parents who has given me this opportunity to study here. I would like to thank SIR
Salman Aqeel for giving me the confidence and opportunity to prove myself.









Growth, Balance, and a World of Fun

EXECUTIVE OVERVIEW

Strategic management process consists of three stages: strategy formulation, strategy
implementation and strategy evaluation. The scope of the project is to discuss the strategies
adopted and applied by Pepsi Cola, Pakistan and also decide which alternative strategy will
benefit the firm most.
Moreover the project also discusses the analysis of competition, market growth and trend,
opportunity analysis and strategies for creating competitive advantage adopted by Pepsi Cola
Pakistan.
Purpose of this project is to study the strategies which Pepsi is adopting for its products. Pepsi
International is a world renowned brand. It is a very well organized multinational company,
which operates almost all over the world. In Pakistan It also has proved itself to be the No.1 soft
drink.
Now a days Pepsi is recognized as Pakistanis National drink. Pepsis greatest rival is Coca Cola.
Coca Cola has an international recognized brand. Cokes basic strength is its brand name. But
Pepsi with its aggressive marketing planning and quick diversification in creating and promoting
new ideas and product packaging, is successfully maintaining at No.1 position in Pakistan.








Executive Summary

Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Cokes
basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product packaging, is successfully
maintaining is No.1 position in Pakistan.
Purpose of this project is to study the strategies which Pepsi is doing in Pakistan market for its
product Pepsi cola. Pepsi International is a world renowned brand. It is a very well organized
multinational company, which operates almost all over the world. In Pakistan, It also has proved
itself to be the No.1 soft drink.


Introduction to PepsiCo
PepsiCo serves 200 countries and is a world leader in providing food and beverage
products. Its brands consist of Frito-Lay North America, PepsiCo Beverages North
America, PepsiCo International and Quaker Foods North America. Some of PepsiCo's
brands are over 100 years old, however the company was only founded in 1965 when
Pepsi-Cola merged with Frito-Lay. PepsiCo then attained Tropicana and Gatorade when
they merged with the Quaker Oats Company. The combined retail sales average about
$92 billion. The company is focused on being the premier producer in supplying the world with
convenient foods. They offer a wide variety a food options as well, including healthy options.

PepsiCo stands out as a company because of its sustainable advantage. It includes widely known
brands, innovative products, and powerful market skills. The company also tries to benefit the
community. To make themselves a sustainable company, they have put a focus on the
environment and benefiting society with their business. Recently, PepsiCo released information
of their plan to drive sustainable water practices and improve rural water in Africa, China, India,
and Brazil. Public Relations people have great opportunities to improve the company's reputation
because of the size and financial stability of the company. PepsiCo is extremely well known in
the world as a leading source of food and beverage products with immense revenue. The
challenge for the Public Relations people is that if something negative were to effect PepsiCo it
would put a damper on all of the products that the company makes. Therefore, the PR people
would have a lot of crisis management in their hands




History of PepsiCo

PepsiCo's Beginnings
The recipe for Pepsi, the soft drink, was first developed in the 1890s by a New Bern, North
Carolina pharmacist and industrialist, Caleb Bradham, who named it "Pepsi-Cola" in 1898. As
the cola developed in popularity, he created the Pepsi-Cola Company in 1902 and registered a
patent for his recipe in 1903. The Pepsi-Cola Company was first incorporated in the state of
Delaware in 1919. The company went bankrupt in 1931 and on June 8 of that year the
trademark and syrup recipe was bought by Charles Guth who owned a syrup manufacturing
business in Baltimore, Maryland. Guth was also the president of Loft, Incorporated, a leading
candy manufacturer and used the company's labs and chemists to reformulate the syrup. He
further contracted to stock the soda in Loft's large chain of candy shops and restaurants, which
were known for their soda fountains, used Loft resources to promote Pepsi, and moved the
soda company to a location close by Loft's own facilities in New York City. In 1935 the
shareholders of Loft sued Guth for his 91% stake of PepsiCo in the landmark Guth v. Loft Inc..
Loft won the suit and on May 29, 1941 formally absorbed Pepsi into Loft, which was then
rebranded as Pepsi Cola Company that same year. (Loft restaurants and candy stores were spun
off at this time.) In the early 1960s the company product line expanded with the creation of
Diet Pepsi and purchase of Mountain Dew.
Separately, the Frito Company and H.W. Lay & Company two American potato and corn chip
snack manufacturers began working together in 1945 with a licensing agreement allowing
H.W. Lay to distribute Fritos in the Southeastern United States. The companies merged to
become Frito-Lay, Inc. in 1961.
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the
company it is known as at present. At the time of its foundation, PepsiCo was incorporated in
the state of Delaware and headquartered in Manhattan, New York. The company's
headquarters were relocated to its still-current location of Purchase, New York in 1970, and in
1986 PepsiCo was reincorporated in the state of North Carolina.



















Products


Operations in domestic and foreign country
We are organized into three business units, as follows:
1. PepsiCo Americas Foods (PAF), which includes Frito-Lay North America (FLNA),
Quaker Foods North America (QFNA) and all of our Latin American food and snack
businesses (LAF), including our Sabritas and Gamesa businesses in Mexico;
2. PepsiCo Americas Beverages (PAB), which includes PepsiCo Beverages North America
and all of our Latin American beverage businesses; and
3. PepsiCo International (PI), which includes all PepsiCo businesses in Europe and all
PepsiCo businesses in Asia, Middle East and Africa (AMEA).
Our three business units are comprised of six reportable segments (referred to as divisions), as
follows:
FLNA,
QFNA,
LAF,
PAB,
Europe, and
AMEA.
Frito-Lay North America
Either independently or through contract manufacturers, FLNA makes, markets, sells and
distributes branded snack foods. These foods include Lay's potato chips, Doritos tortilla chips,
Cheetos cheese flavored snacks, Tostitos tortilla chips, branded dips, Fritos corn chips, Ruffles
potato chips, Quaker Chewy granola bars and SunChips multigrain snacks. FLNA branded
products are sold to independent distributors and retailers. In addition, FLNA's joint venture with
Strauss Group makes, markets, sells and distributes Sabra refrigerated dips.
Quaker Foods North America
Either independently or through contract manufacturers, QFNA makes, markets and sells cereals,
rice, pasta and other branded products. QFNA's products include Quaker oatmeal, Aunt Jemima
mixes and syrups, Cap'n Crunch cereal, Quaker grits, Life cereal, Rice-A-Roni, Pasta Roni and
Near East side dishes. These branded products are sold to independent distributors and retailers.
Latin America Foods
Either independently or through contract manufacturers, LAF makes, markets and sells a number
of snack food brands including Gamesa, Doritos, Cheetos, Ruffles, Lay's and Sabritas, as well as
many Quaker-brand cereals and snacks. These branded products are sold to independent
distributors and retailers.
PepsiCo Americas Beverages
Either independently or through contract manufacturers, PAB makes, markets and sells beverage
concentrates, fountain syrups and finished goods, under various beverage brands including Pepsi,
Mountain Dew, Gatorade, 7UP (outside the U.S.), Tropicana Pure Premium, Sierra Mist,
Mirinda, Mug, Propel, Manzanita Sol, Tropicana juice drinks, SoBe Lifewater, Dole, Amp
Energy, Paso de los Toros, Naked juice and Izze. PAB also, either independently or through
contract manufacturers, makes, markets and sells ready-to-drink tea, coffee and water products
through joint ventures with Unilever (under the Lipton brand name) and Starbucks. In addition,
PAB licenses the Aquafina water brand to its bottlers and markets this brand. PAB sells
concentrate and finished goods for some of these brands to authorized bottlers, and some of these
branded finished goods are sold directly by us to independent distributors and retailers. The
bottlers sell our brands as finished goods to independent distributors and retailers. PAB's volume
reflects sales to its independent distributors and retailers, as well as the sales of beverages
bearing our trademarks that bottlers have reported as sold to independent distributors and
retailers. Bottler case sales (BCS) and concentrate shipments and equivalents (CSE) are not
necessarily equal during any given period due to seasonality, timing of product launches, product
mix, bottler inventory practices and other factors. While our revenues are not based on BCS
volume, we believe that BCS is a valuable measure as it quantifies the sell-through of our
products at the consumer level.
See also "Acquisition of Common Stock of PBG and PAS" below.
Europe
Either independently or through contract manufacturers, Europe makes, markets and sells a
number of leading snack foods including Lay's, Walkers, Doritos, Cheetos and Ruffles, as well
as many Quaker-brand cereals and snacks, through consolidated businesses as well as through
noncontrolled affiliates. Europe also, either independently or through contract manufacturers,
makes, markets and sells beverage concentrates, fountain syrups and finished goods under
various beverage brands including Pepsi, 7UP and Tropicana. These brands are sold to
authorized bottlers, independent distributors and retailers. In certain markets, however, Europe
operates its own bottling plants and distribution facilities. In addition, Europe licenses the
Aquafina water brand to certain of its authorized bottlers. Europe also, either independently or
through contract manufacturers, makes, markets and sells ready-todrink tea products through an
international joint venture with Unilever (under the Lipton brand name).
Europe reports two measures of volume. Snacks volume is reported on a system-wide basis,
which includes our own sales and the sales by our noncontrolled affiliates of snacks bearing
Company-owned or licensed trademarks. Beverage volume reflects Company-owned or
authorized bottler sales of beverages bearing Company-owned or licensed trademarks to
independent distributors and retailers (see PepsiCo Americas Beverages above).
See also "Acquisition of Common Stock of PBG and PAS" below.
Asia, Middle East & Africa
AMEA makes, markets and sells a number of leading snack food brands including Lay's,
Kurkure, Chipsy, Doritos, Smith's, Cheetos, Red Rock Deli and Ruffles, through consolidated
businesses as well as through noncontrolled affiliates. Further, either independently or through
contract manufacturers, AMEA makes, markets and sells many Quaker-brand cereals and snacks.
AMEA also makes, markets and sells beverage concentrates, fountain syrups and finished goods,
under various beverage brands including Pepsi, Mirinda, 7UP and Mountain Dew. These brands
are sold to authorized bottlers, independent distributors and retailers. However, in certain
markets, AMEA operates its own bottling plants and distribution facilities. In addition, AMEA
licenses the Aquafina water brand to certain of its authorized bottlers. AMEA also, either
independently or through contract manufacturers, makes, markets and sells ready-to-drink tea
products through an international joint venture with Unilever (under the Lipton brand name).
AMEA reports two measures of volume

Our Distribution Network
Our products are brought to market through DSD, customer warehouse and foodservice and
vending distribution networks. The distribution system used depends on customer needs, product
characteristics and local trade practices.
Direct-Store-Delivery
We, our bottlers and our distributors operate DSD systems that deliver snacks and beverages
directly to retail stores where the products are merchandised by our employees or our bottlers.
DSD enables us to merchandise with maximum visibility and appeal. DSD is especially well-
suited to products that are restocked often and respond to in-store promotion and merchandising.
Customer Warehouse
Some of our products are delivered from our manufacturing plants and warehouses to customer
warehouses and retail stores. These less costly systems generally work best for products that are
less fragile and perishable, have lower turnover, and are less likely to be impulse purchases.
Foodservice and Vending
Our foodservice and vending sales force distributes snacks, foods and beverages to third-party
foodservice and vending distributors and operators. Our foodservice and vending sales force also
distributes certain beverages through our bottlers. This distribution system supplies our products
to restaurants, businesses, schools, stadiums and similar locations.

Challenges faced as an MNE
Demand for our products may be adversely affected by changes in consumer preferences
and tastes or if we are unable to innovate or market our products effectively.
Any damage to our reputation could have an adverse effect on our business, financial
condition and results of operations.
Our financial performance could be adversely affected if we are unable to grow our
business in developing and emerging markets or as a result of unstable political
conditions, civil unrest or other developments and risks in the markets where we operate.
Trade consolidation or the loss of any key customer could adversely affect our financial
performance.
Changes in the legal and regulatory environment could limit our business activities,
increase our operating costs, reduce demand for our products or result in litigation.
If we are not able to build and sustain proper information technology infrastructure,
successfully implement our ongoing business transformation initiative or outsource
certain functions effectively, our business could suffer.
Unfavorable economic conditions in the countries in which we operate may have an
adverse impact on our business results or financial condition.
Fluctuations in foreign exchange rates may have an adverse impact on our business
results or financial condition.
Our financial performance could suffer if we are unable to compete effectively.
Our operating results may be adversely affected by increased costs, disruption of supply
or shortages of raw materials and other supplies.
Disruption of our supply chain could have an adverse impact on our business, financial
condition and results of operations.
Climate change, or legal, regulatory or market measures to address climate change, may
negatively affect our business and operations.
If we are unable to hire or retain key employees or a highly skilled and diverse
workforce, it could have a negative impact on our business.
A portion of our workforce belongs to unions. Failure to successfully renew collective
bargaining agreements, or strikes or work stoppages could cause our business to suffer.
Failure to successfully complete or integrate acquisitions and joint ventures into our
existing operations could have an adverse impact on our business, financial condition and
results of operations.
Forward-Looking and Cautionary Statements
Market Risks
Commodity Prices
Foreign Exchange
Interest Rates
Risk Management Framework


PepsiCo and World cup

Pepsi "isnt going to let Coca-Cola Co. rule" football's World Cup in Brazil, according to Tariq
Panja of BLOOMBERG. Cokes relationship with FIFA is in its fifth decade, yet Pepsi "is
planning its biggest-ever" football campaign, featuring Argentine Lionel Messi among its key
performers. Pepsi Global CMO Kristin Patrick said, Its the first time weve rolled out a global
football campaign to this magnitude.

Launched on the back of Pepsi SAs Play in our World campaign, the activation took place in
stores specifically chosen by Pepsi. Each store activation comprised of 4 hours of live promotion,
including sampling, dance offs and a purpose built kick at goal competition with exciting
prizes and giveaways for the lucky winners.
Each Pepsi activation rig included stage trailers, gazebos, plasma TVs and a multiple sample
stations all of which created a very impressive, eye catching brand presence with the key
objective being to invite potential participants and Pepsi customers to come Play in our World
says Winstanley, Pepsi were extremely happy with the results shown from this exciting
campaign
The activations not only generated great brand awareness for Pepsi but also allowed us to drive
sales in a very competitive market segment. An excellent platform for future promotions and
activations in the South African market says Merlin Norman, Marketing manager of Pepsi
South Africa.


Corporate Culture
We understand that the success of our business is not just thanks to our products, but our people
who are our most important asset. By delivering outstanding business performance, Suntory
PepsiCo Vietnam has become a great place to work.
This means providing development opportunities to employees and a well-balanced work life.
Alongside being a diverse place to work, Suntory PepsiCo Vietnam also offers generous
compensation and benefits packages and excellent working conditions. We work hard to develop
the competency of the management teams who in turn, continuously improve the working and
business environment. We have established systems to ensure continual career development for
our employees and the reward and recognition program is part of our management culture.

Suntory PepsiCo Vietnam empowers all our employees to deliver sustained growth. We promote
a good work-life balance (WLB) to help our employees not only fulfill their responsibilities in
the company but also spend time with their families. Therefore, they get the support from their
family to continuously contribute to the company's business development.
Suntory PepsiCo Vietnam nurtures a work ethic in which business is conducted in line with
Vietnamese traditional cultural, moral and social values. Other than our competitive
compensation and benefits, this is one of the key factors responsible for attracting talent people.

Besides that, our Values and Code of Conduct play an important role in building a strong
corporate culture:
Values
Our commitment is to deliver sustained growth through empowered people acting with
responsibility and building trust. We must always strive to:
Care for our customers, consumers and the world we live in
Sell only products we can be proud of
Speak with trust and candor
Balance short term and long term
Win with diversity and inclusion
Respect others and succeed together




FACTS ABOUT THE COMPANY


1. Pepsi is a USA based public company whose stocks are available in New York.
2. Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising and package graphics
room hillbillies to action-oriented scenes.
3. The third Mountain Dew slogan appeared in 1973 "Put A Little Yahoo in Your Life."
4. In 1977, PepsiCo acquires Pizza Hut; Inc. Pizza Hut was founded in 1958 by Dan and Frank
Carney.
5. Taco Bell is was acquired by Pepsi. Taco Bell was established in the mid 1960s by Glen Bell.
6. In 1968, PepsiCo is listed on the Tokyo stock exchange. Pepsi-Cola acquires Mug Root Beer.
PepsiCo purchases Kentucky Fried Chicken (KFC).
7. In 1989, PepsiCo acquires Walkers Crisps and Smith Crisps, two of the United Kingdom's
leading snack food companies. PepsiCo enters the top 25 of the Fortune 500 ranking.
8. In 1988, "Chase", a four-part Pepsi ad featuring Michael Jackson in his first-ever episodic
commercial, airs during the Grammy Awards and becomes the most-watched commercial in
advertising history.
9. In 1990, PepsiCo acquired controlling interest in Gamesa, Mexico's largest cookie company.
10. In 1991, Pepsi-Cola forms a joint venture with Unilever to develop and market tea-based
drinks.
11, In 1994, Pepsi-Cola was the first major soft drink maker to begin producing and distributing
its product in Vietnam. PepsiCo and Starbucks form the North American Coffee Partnership to
jointly develop ready-to-drink coffee beverages.
12. In 1995, Frito-Lay announces plans to buy the 104-year-old snack Cracker Jack. Aquafina
bottled water is rolled-out nationally. PepsiCo spins off Kentucky Fried Chicken, Pizza Hut and
Taco Bell as Tricon Global Restaurants, Inc. PepsiCo will introduce Lay's brand potato chips in 20
markets throughout the world.
13, In 1998, PepsiCo acquires Tropicana Products from Seagram Company Ltd., the biggest
acquisition ever undertaken by PepsiCo. The Pepsi-Cola Company celebrates its 100th
anniversary.
14, In 2001, PepsiCo merges with The Quaker Oats Company.
15, In 2006, Pepsi acquires IZZE Beverage Company. PepsiCo completes the acquisition of
Stacy's Pita Chip Co.
16, In 2007, PepsiCo and Pepsi Americas jointly acquire Sandora, a leading juice company in
Ukraine.
17, In 2008, PepsiCo announces plans to invest US $1 billion in China over the next four years as
part of the strategy to expand in emerging markets and broaden the portfolio of locally relevant
products.
18. In 2009, PepsiCo and Calbee Foods Company announce a strategic alliance to make and sell
a wide range of food products in Japan.
19. In 2011, PepsiCo and Tingyi Holding, one of the major food and beverage companies in
China, announce an agreement to form a strategic alliance in China. PepsiCo acquires Mabel, a
leading producer of cookies, crackers and snacks in Brazil.
20, In 2013, Mller Quaker Dairy, a joint venture between PepsiCo and The Mller Group, open
a new state-of-the-art yogurt manufacturing facility in Batavia, New York.

































A corporate vision can focus, direct, motivate, unify,
and even excite a business into superior performance.
The job of a strategist is to identify a clear vision.
JOHN KEANE

VISI N
PepsiCos responsibility is to continually improve all aspects of the world in which we operate -
environment, social, economic - creating a better tomorrow than today.

Pepsi cola international vision is put into action through programs and a focus on environmental
stewardship, activities to benefit society, and a commitment to build shareholder value by making
PepsiCo a truly sustainable company.
































A business is not defined by its name, statutes, or Articles
of incorporation. It is defined by the Business mission.
Only a clear mission and purpose of the organization
makes Possible clear and realistic business
objectives.
PETER DRUCKER
MISSI N STATEMENT
Our mission is to be the worlds premier consumer products company focused on convenient foods and
beverages. We seek to produce financial rewards to investors as we provide opportunities for growth
and enrichment to our employees, our business partners and the communities in which we operate. And
in everything we do, we strive for honesty, fairness and integrity.

REVIEW OF MISSION STATEMENT
To be a result oriented and profitable Company by consistently improving market share, quality,
diversity, availability, presentation, reliability and customer acceptance.
To ensure cost consciousness in decision making and operations without compromising the
commitment to quality.
To set up highly ethical business standards and be a good corporate citizen, contributing
towards the development of the national economy and assisting charitable causes.
To adopt appropriate safety rules and environment friendly policies.
















The idea is to concentrate our strength
against our competitors relative weakness.
BRUCE HENDERSON

SWOT ANALYSIS OF PEPSI
STRENGHTS:
Strong Multinational (Brand Equity)
Strong & Vast Distribution Channels
Lack Of Capital Constraints
Record Market Share
Strong Brand Portfolio
Aggressiveness In The Market (Market Leader)
Brand Promotion & Sponsorship

WEAKNESS:
Targeting Only Young Customers
Political Franchises
Centralized Decision Making
Decline In Taste
Motivational Factor
Not All Products Bear The Company Name


OPPORTUNITY:
PepsiCo New Products Can Easily Penetrate In The Market.
Noncarbonated Drinks Are The Fastest-Growing Industry
Demand Of Pepsi Is More Than Of Competitor
Changing Social Trends (Fast Foods)
Internet Promotion And Ordering Processes
May Tie Up or Liaison With Major Showrooms, Computer Centers &Restaurant



If everyone is thinking alike, then
somebody isnt thinking.

GEORGE PATTON
THREATS:
Non-Carbonated Substitutes (The Mango Season)
Beverage Industry Is Mature
Fake Products (Imitators)
Competitors Schemes
Strong Competition With Coca-Cola Company







Good strategy and good implementation are
the most trust worthy proof of good
management.
JOEL ROSS
External Factor Evaluation (EFE) Matrix

Scoring Method:
List The Key External Factor
Assign Weight To Each (0 To 1.0)
Weight In Response To Importance Of A Factor For A Particular Industry
Sum Of All Weights = 1.0
Assign 1-4 Rating To Each Factor
Firms Current Strategies Response To The Factor: How Well Firms Response To These
Factors (Effectiveness Of The Firm).
Poor Response 1
Average Response 2
Above Average Response 3
Superior Response 4
Multiply Each Factors Weight By Its Rating
Produces A Weighted Score
Sum The Weighted Scores For Each
Determines The Total Weighted Score For The Organization
Result:
Above Average Response 2.77 (Aggressive)
Internal Factor Evaluation (IFE) Matrix


Scoring Method:
List Key Internal Factors (Strengths & Weaknesses)
Assign Weight To Each (0 To 1.0)
Weight In Response To Importance Of A Factor For A Particular Industry
Sum Of All Weights = 1.0
Assign 1-4 Rating To Each Factor
Firms Current Strategies Response To The Factor: How Well Firms Response To These
Factors (Effectiveness Of The Firm).
Major Weakness 1
Minor Weakness 2
Minor Strength 3
Major Strength 4
Multiply Each Factors Weight By Its Rating
Produces A Weighted Score
Sum The Weighted Scores For Each
Determines The Total Weighted Score For The Organization
Result:
Score 2.5 Aggressive
Score 2.5 Defensive
2.79 (Aggressive)

COMPETITIVE PROFILE MATRIX (CPM)


Scoring Method:
List Key Internal And External Critical Success Factors
Assign Weight To Each (0 To 1.0)
Weight In Response To Importance Of A Factor For A Particular Industry
Sum Of All Weights = 1.0
Assign 1-4 Rating To Each Factor
Firms Current Strategies Response To The Factor: How Well Firms Response To These
Factors (Effectiveness Of The Firms).
Major Weakness 1
Minor Weakness 2
Minor Strength 3
Major Strength 4
Multiply Each Factors Weight By Its Rating
Produces A Weighted Score
Sum The Weighted Scores For Each
Determines The Total Weighted Score For The Organization
Result: PepsiCo has More Aggressive Policy as compare to other competitors

SWOT Matrix
Strategic management is not a box of tricks or a Bundle
of techniques. It is analytical thinking and
Commitment of resources to action.
But quantification alone is not
planning. Some of the
Most important issues
in strategic management
Cannot be quantified
at all.
PETER DRUCKER
The Strategic Position And Action Evaluation (SPACE) Matrix
Steps for the preparation of SPACE Matrix:
1. Select a set of variables to relating to financial strength, competitive advantage, environmental
Stability, and industry strength.
2. Assign a numerical value ranging from +1 (worst) to +6 (best) to each of the variables that make
Up the financial strength and industry strength dimensions. Assign a numerical value ranging from
-
1 (best) to -6 (worst) to each of the variables that make up the environmental stability and
Competitive advantage dimensions.
3. Compute an average score and dividing by the number of variables
4. Plot the average scores in the space matrix.
5. Add the two scores on the x-axis and plot the resultant point on x. Add the two scores on the y-
axis
And plot the resultant point on y. Plot the intersection of the new xy point.
6. Draw a directional vector from the origin of the space matrix through the new intersection point.
This vector reveals the type of strategies recommended for the organization: aggressive,
Competitive, defensive, or conservative.
Competitive Advantage:-
Brand Recognition -3 Mean= -2.75
Large Market Share -2
Wide Distribution Channel -2
Customer Loyalty -4
Financial Strength:-
Inventory Turnover +5 Mean= +4
Return On Asset +4
Net Income +3
Industrial Strength:-
High Industry Growth Rate +5 Mean = +3.75
Profit Potential +3
Financial Stability +4
Resource Utilization +3
Environmental Stability:-
Economic Stability -2 Mean = -2.33
Barrier To Entry -2
Competitive Pressure -3

CA + IS = +1.0
FS+ES = +1.67

Aggressive
Backward, Forward, Horizontal Integration
Market Penetration
Product Development
Diversification (Related or Unrelated)
BCG Matrix
Division Revenue % Revenue Profit Profit % Market Share
Market
Growth
Frito-Lay North America $ 13,224.00 31% $ 3,258.00 38% 1 5.42%
Quaker Foods North America $ 1,884.00 4% $ 628.00 7% 1 -0.95%
Latin America Foods $ 5,703.00 13% $ 904.00 10% 1 -3.26%
PepsiCo Americas Beverages $ 10,116.00 23% $ 2,172.00 25% 0.8 -7.51%
Europe $ 6,727.00 16% $ 932.00 11% 0.4 -2.38%
Asia, Middle East & Africa $ 5,578.00 13% $ 716.00 8% 0.3 8.97%
Total $ 43,232.00 100% $ 8,610.00 100%




Stars
Frito-Lay North America

Cashcows
Quaker Foods North America
Latin America Foods
PepsiCo Americas Beverages

Question Mark
Asia, Middle East & Africa

Dogs
Europe




















Without a strategy the organization is like a
ship without a rudder, going around in
circles. Its like a tramp that has
no place to go to.
JOEL ROSS AND MICHAEL KAMI
The Internal-External (IE) Matrix
This is also an important matrix of matching stage of strategy formulation. It relate to
internal (IFE) and external factor evaluation (EFE). The findings form internal and external
position and weighted score plot on it. It contains nine cells. Its characteristics is a s follow:
Positions an organizations various divisions in a nine-cell display.
Similar to BCG Matrix except the IE Matrix
Requires more information about the divisions
Strategic implications of each matrix are different
Based on two key dimensions
The IFE total weighted scores on the x-axis
The EFE total weighted scores on the y-axis
Divided into three major regions
Grow and build Cells I, II, or IV
Hold and maintain Cells III, V, or VII
Harvest or divest Cells VI, VIII, or IX

Steps for the development of IE matrix:
Based on two key dimensions IFE and EFE.
Plot IFE total weighted scores on the x-axis and the EFE total weighted scores on the y
axis
On the x-axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a
weak internal position; a score of 2.0 to 2.99 is considered average; and a score of 3.0 to
4.0 is strong.
On the y-axis, an EFE total weighted score of 1.0 to 1.99 is considered low; a score of 2.0
to 2.99 is medium; and a score of 3.0 to 4.0 is high.
IE Matrix divided into three major regions.
Grow and build Cells I, II, or IV
Hold and maintain Cells III, V, or VII
Harvest or divest Cells VI, VIII, or IX
Whether its broke or not, fix it__ make it better.
Not just products, but the whole
company if necessary.
BILL SAPORITO

IFE score 2.79
EFE score 2.77
Hold And Maintain:
Market Penetration
Product Development


The IFE Total Weighted Score

4
Strong
3
Average
2
Weak
1
High





3

I
Invest
II
Invest
III Hold
The EFE Total
Weighted
Score
Medium



2
IV
Invest
V
Hold
VI
Harvest
Low





1
VII
Hold
VIII
Harvest
IX
Divest
Life is full of lousy options.
GENERAL P. X. KELLEY
Grand Strategy Matrix
This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is
popular tool for formulating alternative strategies. In this matrix all organization divides into
four quadrants.
Any organization should be placed in any one of four quadrants. Appropriate strategies for an
organization to consider are listed in sequential order of attractiveness in each quadrant of the
matrix. It is based two major dimensions
1) Market growth
2) Competitive position
Quadrant 1
As above quadrant diagram Pepsi fall in Quadrant I indicate that the firm is in rapid market
growth and strong competitive position. PepsiCo can continue concentrating on their current
business. However, PepsiCo with excess resources may consider vertical integration .PepsiCo
must focus on current market and appropriate to follow market penetration, market
development and products development are appropriate strategies.
Market Development
Market Penetration
Product Development
Backward, Forward, Horizontal Integration
Related/Concentric Diversification
Competing in the market place is like a war.
You have
injuries and casualties, and the best
strategy wins.
JOHN COLLINS
The quantitative strategic planning matrix (QSPM)
The last stage of strategy formulation is decision stage. In this stage it is decided that which way
is most Appropriate or which alternative strategy should be select. This stage contains QSPM
that is only tool For objective evaluation of alternative strategies. A quantitative method used
to collect data and prepare A matrix for strategic planning. It is based on identified internal and
external crucial success factors. That is only technique designed to determine the relative
attractiveness of feasible alternative action. This technique objectively indicates which
alternative strategies are best.
The QSPM uses
Input from Stage 1
Analyses and matching results from Stage 2
Analyses to decide objectively among alternative strategies.
That is, the EFE Matrix, IFE Matrix, and Competitive Profile Matrix that make up Stage 1,
coupled with the TOWS Matrix, SPACE Analysis, BCG Matrix, IE Matrix, and Grand Strategy
Matrix that make up Stage 2, provide the needed information for setting up the QSPM (Stage
3).

Steps in preparation of QSPM:
List of the firm's key external opportunities/threats and internal strengths/weaknesses
in the left column of the QSPM.
Assign weights to each key external and internal factor
Examine the Stage 2 (matching) matrices and identify alternative strategies that the
organization should consider implementing
Determine the Attractiveness Scores (AS)
Compute the Total Attractiveness Scores
Compute the Sum Total Attractiveness Score

Limitations
Requires intuitive judgments and educated assumptions
Only as good as the prerequisite inputs
Only strategies within a given set are evaluated relative to each other

Advantages
Sets of strategies considered simultaneously or sequentially
Integration of pertinent external and internal factors in the decision making process

QSPM Matrix











Results:
From the above matrix it is concluded that PepsiCo. Should adopt the 2nd strategy that is
PepsiCo. May Tie Up Or Liaison With Major Showrooms, & Restaurant and different clubs
Recommendations & Conclusion
From all the above discussion it is concluded that PepsiCo. Should go for market penetration
that is to increase its market share through tie up with different restaurants & clubs as well as
continue or go with its already adopted strategies such as increase its share through huge
advertisement and through sponsoring different events such as PepsiCo. Continuously
sponsoring cricket matches at national and international level. From above the score of both
strategies are very close to each other so PepsiCo. May also take both of the strategies as well.


Competitive Analysis: Porters Five-Forces Model

1. Rivalry among competing firms
High-
They face very strong competition from Coca-Cola in the beverage market and face strong
competition in their snack division from Coca-Cola, Kellogg, Kraft and General Mills (David,
2011). This competition is fought out through advertising, through store shelve space and
through various sponsorship opportunities.

2. Potential Entry of new competitors
High-
PepsiCo faces a high likelihood of potential new competitors. These new competitors can be
from new products from their existing competitors such as Coca-Cola competing with PepsiCos
existing brands or new companies developing new products such as Starbucks cold coffee
drinks. As PepsiCo expands into other countries they will face those countries regional food
manufactures who already have had developed a market presence there.

3. Potential development of substitute products
High-
Foods can be substitute most readily for other foods of equal quality costing less, lower quality
costing less or a different product altogether. Not only can one food be substituted for another
but can be purchased at a different locations. In addition, consumers can simply buy a store
brand, have tap water or go without the any substitute altogether.

4. Bargaining power of suppliers
Low-
The basic food products PepsiCo needs to develop its products from originate at farms, these
farms sell to intermediaries who then sell it to food processing facilities. It is these
intermediaries, food processing companies and wholesalers who have the most bargaining
power in relation to suppliers. However, should some of these farms experience internal or
external environmental issues the result could hamper PepsiCos supply chain.
5. Bargaining power of consumers
High-
Consumers have a high level of bargaining power in relation to food manufactures such as
PepsiCo. Shoppers can chose from a variety snacks and beverages from a wide variety of stores
from within just a few miles of their home. Consumers can chose what types of food stuffs to
buy in a store and they can shop at multiple stores to complete their entire purchase. In
addition, shoppers can substitute one food for another, chose products based on price, quality,
sale, marketing, its packaging, freshness, shelf life and many other characteristics. Consumers
can buy in bulk or they can impulse buy, each determining the profit of the store supplying the
snack or beverage and the return on the product for PepsiCo.

Financial Statement Analysis



References
1. http://financials.morningstar.com/ratios/r.html?t=PEP
2. http://en.wikipedia.org/wiki/Porter_five_forces_analysis
3. http://www.docstoc.com/docs/9533938/Pepsi---PowerPoint
4. http://www.strategicmanagementinsight.com/swot-analyses/pepsico-swot-analysis.html
5. http://www.pepsico.com/
6. http://en.wikipedia.org/wiki/PepsiCo