Pepsico -- Buco 252

8/12/2019 Pepsico -- Buco 252

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A Brand & An EmpirePresented by Yusuf Aktan, Steve Gao, Kyron Richard &Sucharita Yellapragada

8/12/2019 Pepsico -- Buco 252


Our Recommendation

• Continue to devote resources to the carbonated beveragemarket.

• Invest heavily into emerging markets. • Establish separate brand identities for subsidiary companies.

8/12/2019 Pepsico -- Buco 252


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Customers Product Rivalry Company Proposal

8/12/2019 Pepsico -- Buco 252


PepsiCo is a major player•

Huge consumer base including customers from • Tropicana • Quaker Oats • Frito-Lay

8/12/2019 Pepsico -- Buco 252


Customers want healthy options

• Balance a reduction of sodium, added sugar, and saturatedfats in beverages and snacks

• Keep continuity with taste and customer experience

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Important conditions to consider• Half of current revenue comes from outside US• India and Middle East are quickly growing regions. • Clear market leader in snacks worldwide• Focuses on volume growth, revenue growth, and growth in

operating profit

8/12/2019 Pepsico -- Buco 252


How to serve our customers•

Retailers: served by Pepsi’s packaged goods business • Direct Consumers: served by restaurant business • Both businesses involve inexpensive consumer products • Major markets include:

• supermarkets • mass merchandisers • smaller retail outlets (gas stations)

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Pepsi in relation to families•

Children are being cut off from soft drinks • Full calorie sodas removed from American schools in 2006

• Diet sodas are healthier and maintain brand recognition • Advertising to children might be restricted

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A conflicting company portfolio • Two types of products within Pepsi for consumers to buy

• Fun for You: snacks, chips, and sodas (Pepsi, Doritos) • Good for You: nutritious foods and drinks (Naked, Stacy’s

Chips)• Nutritious foods and beverages that enjoyed a reputation for

health and wellness among consumers

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8/12/2019 Pepsico -- Buco 252


Fun For You products made Pepsi

• Key brands like Mountain Dew, Doritos, and 7up made Pepsi • Even today, Pepsi Cola is a major source of revenue

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Soft Drinks are not market leaders

• Current industry trends show that the soft drink category is weakening due to tastechanges and government regulations.

• Healthy trends are popular across the market and will influence product popularity.

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8/12/2019 Pepsico -- Buco 252


Diversify Pepsi’s product offering

• Maintain high-revenue with FFY Products • Focus on growing healthy brands• Diversify, and limit, future product portfolio to match consumer

tastes

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The conditions of market

• Essentially an oligopoly, with 4 main competitors • Coke

• Dr. Pepper-Snapple Group

• Mondelez (formerly Kraft)

• Nestle

• Considerable barriers to entry prevent a new competitor from takingsignificant market share.

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8/12/2019 Pepsico -- Buco 252


Pepsi has the global food advantage

• Closest market competitor is 25% behind in food market.

• Food suppliers have low bargaining power without an affect on price.

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Short life cycles require innovation

• Pepsi has remained an industry leader through innovation • 1970: Globalization & Acquire Food Companies

• 1980s: Acquire Bottling Companies

• 1990s-2000s: Acquire Beverage Companies

• Now: Produce fun and healthy foods

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8/12/2019 Pepsico -- Buco 252


Pepsi’s SWOT in the industry

Strength: Mainly ubiquity and brand recognition. Multipleacquisitions offer a wide platform to develop GFY business.

Opportunities: Invested in numerous smaller premium brandsand new acquisition offer the possibility of an extendedpresence in GFY market.

Threats: Manufacturers are facing tougher regulations

Weakness: Unhealthy connotations associated with Pepsi brand.

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Unique positioning of subsidiaries

• Subsidiaries such as Quaker Oats and Naked Juice are notdirectly associated with the Pepsi Brand by consumers.

• These brands enable Pepsi to apply different channels ofdistribution

8/12/2019 Pepsico -- Buco 252


Possible ingredients in GFY market

• Categories that are prevention by instant gratification

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Possible ingredients in GFY market

• Ingredients that promise long term health benefits

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Making headway in the HW market

• Investment in Naked Juices and other companies reinforced thecompany’s offering in the HW market.

• Continue expanding with products like Pepsi Next, naturalsweetened with Stevia.

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8/12/2019 Pepsico -- Buco 252


Our Recommendation

• Continue to devote resources to the carbonated beveragemarket.

• Invest heavily into emerging markets. • Establish separate brand identities for subsidiary companies.

8/12/2019 Pepsico -- Buco 252


A Brand & An EmpirePresented by Yusuf Aktan, Steve Gao, Kyron Richard &

Sucharita Yellapragada

Pepsico -- Buco 252

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