In-Depth SWOT Analysis of Pepsi | Strengths Weaknesses Opportunities & Threats
History of Pepsi
Pepsi’s history started in 1893 in North Carolina with Caleb Bradham, who invented the Beveridge. Since then, the drink has spread across the United States, becoming one of the most recognizable brands today!
Although Pepsi’s history does not go back as far as Coke’s, it is definitely similar. Pepsi can be traced back to 1893 when it was sold under the name ‘Brad’s Drink.’ It was produced and sold in a New Bern, North Carolina drugstore. The idea was to have a drink that would taste good and raise energy and enhance digestion. Just five years after its launch, the product’s name was changed from Brad’s Drink to Pepsi-Cola.
During the Great Depression, Pepsi struggled, declaring bankruptcy and selling its properties to a new owner. Following another ownership transition, the commodity started to find its feet by pricing itself lower than Coca-Cola. Pepsi began to expand after capturing a significant share of the market, and the rivalry with Coke was established – and it continues to this day.
PepsiCo, Inc. is currently a global food and beverage corporation headquartered in Purchase, New York. It ranked as one of the largest companies in the world in terms of market size and one of the leading soft drink brands, with a brand value of more than 11 billion US dollars in 2020. Pepsi was once one of the most heavily promoted drinks on television in the United States.
Beverage Industry Performance
The global beverage market was valued at US$1,544.61 billion in 2018 and is expected to rise at a CAGR of 3.1 percent to reach a market size of US$1,854.589 billion by 2024. The food and beverage industry is an important part of the world’s economy, currently with an annual turnover of 1.6 trillion dollars. The sector takes a fifth of all coffee production and 7% of the beef, sugarcane, corn, and bananas production.
With this potential revenue, PepsiCo is one of the world’s top brands in the industry. PepsiCo has operations everywhere from Japan to Africa, which makes it a global brand.
SWOT Analysis of Pepsi
PepsiCo’s Strengths & Weaknesses
PepsiCo’s strengths and weaknesses are definitely huge factors that will determine whether it will be able to maintain its market share or not. The company’s strengths have helped it take one of the largest slices of the market, but it will also be responsible for its fall if it does not use them properly.
What are PepsiCo’s Strengths?
The company’s strengths are its variety of products, including bottled water, juice, frozen juices, and soft drinks. These products are highly different from each other, yet they all appeal to the same segment. It has been able to cover over 30% of the market with these different kinds of drinks, which is an outstanding success. The company has done a terrific job.
The other main strength of PepsiCo is its international expansion. In the past few years, it has been aggressive in developing overseas markets, which has been a successful strategy. The company has achieved particularly stunning growth rates in international markets, especially in Latin America.
In Brazil, for example, PepsiCo grew from 12 percent of the market to nearly 50 percent over the last five years. The company has also added huge amounts of new business overseas by entering into long-term contracts with bottlers to sell its products well into the future.
In many of these markets, PepsiCo has also gained a substantial market share, and this has been the company’s most successful strategy for expansion.
One of PepsiCo’s primary strengths is its brands and the ability to develop new products. Their domestic marketing strategy has always been very aggressive, and they use celebrities very effectively to support their product. Through this, they have built strong brand loyalty through frequent exposure of the brands in which they invest. They always focus on strong promotional campaigns around their advertising.
Another PepsiCo’s primary strength is its advertising reach. They have the ability to reach a large number of people quickly and effectively, especially through mass media. They also have strong brand loyalty. The company has invested heavily in marketing and advertising in several markets, making it stand out among other soft drink producers.
Furthermore, PepsiCo has developed its advertising and communications to communicate a message and motivate consumers to buy the product.
They also have a diverse portfolio of products that can be marketed to many different markets and audiences. Their ability to market their products to women is strong, as they market many products within the woman’s interest categories (i.e., health, beauty, etc.). Therefore, PepsiCo can be positioned in many different industries.
One of the strengths that PepsiCo has is its product quality. Since then, the company has been in business for over 100 years and has been involved with some of the best-known companies in the world. This has given it a huge advantage, and it makes sense for PepsiCo to stick with those companies that share the same values.
The product research that PepsiCo conducts is also a strength that should not be dismissed. This research helps PepsiCo develop new products based on customer needs and wants, which is why they are such successful products. The company’s use of technology also helps it tremendously.
PepsiCo has been able to obtain new and exciting ways of selling its products, which is an added advantage that the company will need to consider in the future.
The other part of PepsiCo’s strategy for success is its media campaigns. The company has several different programs that it runs through to help it sell more of its products, and they have all been extremely successful.
The Pepsi Refresh Project is a good example. It works through grassroots organizations and encourages people to participate in local programs that help their community.
PepsiCo has shown that it is not afraid of giving back to the community, which will help it achieve success in the long run because customers like to see companies working together with them.
What are PepsiCo’s Weaknesses?
PepsiCo is not as strong in the beverage areas as they are in the snack food industry. They achieve their growth by acquiring smaller companies and flooding the market with their products. This has hurt their brand loyalty, and the value of PepsiCo shares has decreased significantly.
PepsiCo is still growing, and as it expands, it may not be able to maintain its strong brand loyalty. Also, a large corporation such as PepsiCo can be perceived as being less accountable than smaller companies.
PepsiCo has received criticism for its unhealthy products and corporate practices. The company was criticized in the past for paying low wages to its employees, being responsible for putting too many chemicals into food, and selling unhealthy products to customers (McKenzie 2013).
PepsiCo’s main competitors at Coca-Cola are under similar pressures but are not necessarily more efficient business-wise (BBC 2013). Therefore, it is essential that PepsiCo understands its limits and does not go beyond them as it may struggle to compete against more efficient companies in the future.
Furthermore, PepsiCo’s ability to develop new products is limited due to competition from small companies.
What are PepsiCo’s Opportunities?
PepsiCo has several opportunities. First, as they continue to expand, they will have more space for growth in both mature and emerging markets. Also, as they expand internationally, PepsiCo may be able to grow by developing its presence in smaller markets.
PepsiCo’s Major Opportunities are in its Emerging Markets. These countries include Russia, India, Indonesia, China, and Brazil. The world is also an increasingly globalized place, which means that people are willing to experiment with new cultures and products.
The environment in which PepsiCo operates is a crucial aspect of the success of its products. PepsiCo operates in many different countries around the world and has to take note of any changes that may occur to these markets.
The soda industry has received negative publicity from the media and health experts who say that sugary drinks are bad for health. There is a requirement for the company to reduce its sugar content in order to appeal to a wider range of consumers.
PepsiCo has a good opportunity to utilize its existing market share by offering healthier alternatives. It should also focus on reducing the sugar content in its main drinks. As well as appealing to a wider range of consumers, this strategy could help the company stand out from its competitors.
The global bottled water market is expected to grow in the coming years, with the largest growth in the European and Asian markets. There are also new opportunities for PepsiCo to increase its brand presence.
PepsiCo needs to ensure that it remains one step ahead of Coca-Cola by launching healthier alternatives. Its rival will develop products that can compete with the company in this emerging market.
The company’s strategy should be to develop new, healthier products that can compete with Coca-Cola in the bottled water industry.
The growing popularity of carbonated soft drinks will be beneficial for PepsiCo’s success.
What are PepsiCo’s Threats?
PepsiCo must contend with the fact that it is in a highly competitive environment. PepsiCo faces tough competition from companies such as Coca-Cola, Dr. Pepper, and Mott’s and other drink companies such as Monster and Red Bull that are branching out into the soda market.
PepsiCo is also facing stiff competition in the sports drink category. Other companies such as Gatorade and Powerade have been making gains among young athletes that have been branching out from the traditional soda brands.
Other threats to PepsiCo include price changes by retailers and increased production of competing products. Coca-Cola is starting to produce its own bottled water, which could be a major threat to PepsiCo’s prices in the packaged water market.
The growing popularity of non-carbonated drinks is a threat to PepsiCo as there is less room for growth in this market. This will hurt their ability to compete with Coca-Cola. Also, as government regulation changes, it may affect PepsiCo’s product development and cost structure.
PepsiCo also faces the challenge of having a product that consumers perceive as non-competitive. Consumers tend to perceive Pepsi as the poor relation of Coke and other soft drinks.
Other threats include losing customers to newer brands, such as Coca-Cola Life, and artificial sweeteners becoming less popular because they are not good for you.
PepsiCo’s SWOT Analysis & PepsiCo Business Strategy
The company’s SWOT Analysis has shown it that PepsiCo has a very strong market position. The list of Strengths stands out from the other categories and includes factors such as strong brand loyalty, strong market share, a trusted product, high-quality products, and vast resources in terms of both money and people.
The Weaknesses are also very few when compared to the Strengths. These include the fact that the company is highly dependent on staples such as sugary drinks. Its products are being marketed aggressively through aggressive marketing. There is a potential for increased competition from non-traditional competitors (PepsiCo 2013).
These weaknesses should not be seen as a reason for PepsiCo to change its business practices. It has a good opportunity to improve on its weaknesses by playing around with new ideas and strategies. The company has to understand that it cannot go out of business, and it cannot ignore these weaknesses.
PepsiCo’s Strengths and Weaknesses need to be used in the decision-making process as they provide the company with a good roadmap on how to improve its corporate practices.
The first thing that PepsiCo needs to do is to make sure is that its products are healthy. It should look at ways of ensuring that they are easy to sell and make sure that its products are environmentally friendly.
Another thing that PepsiCo needs to do is learn to expand its products. It needs to take a look at some of its competitors and find ways of either eliminating them from the market or competing against them.
The last thing that PepsiCo needs to do is to figure out ways of selling its products cost-effectively. It will need to figure out the best way of selling its beverages so that it gets the maximum benefits.
PepsiCo’s international expansion strategy has worked very well, but it is clear that the company needs to find new ways of growth within its own home market.
The company should also make sure that it does not become too dependent on Latin American markets, giving Coca-Cola a significant advantage if it decides to enter into those markets.
The company should also learn to grow in markets where its competitors do not yet have a presence. This will be the company’s best protection against new competitors like Coca-Cola trying to enter into that market.
PepsiCo has a good chance to expand internationally and expand internationally. Still, it needs to do so carefully as not everything will work out as planned, and it will need to adjust accordingly.
PepsiCo has done many things right but now needs to start thinking about different ways to expand its business. The company’s first move should be towards understanding its weaknesses better.
This will help it be more aware of the threats that Coca-Cola may pose to its market share and also enable it to find new ways of utilizing its strengths. Its focus should not be on eliminating all competition, as this could attract other companies to enter the market and dilute PepsiCo’s strength in the long run.
The company should make sure that it does not seek a monopoly any time soon and instead make some effort to expand its business in new areas so that it can maintain its position in the market over time.