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Pepsico Case Analysis

1060 words - 5 pages

PepsiCo’s business strategies were working out very well for them except for in their international operations. The international segment had relatively low profit margins which meant that PepsiCo needed to implement a new organizational structure that would better utilize strategic fits between the company’s international operations. Also, the operating margins and profitability across the different geographic areas and product lines varied a lot for PepsiCo. Gaining some more stability throughout each area and product line would increase the company’s growth and strength within their targeted markets.
Situation Analysis
In 1997 PepsiCo set out to accomplish a major ...view middle of the document...

For example, in Chile Frito-Lay’s brand has 90 percent of the market, but Pepsi products are not doing so well. PepsiCo could run advertisements that allowed you to buy a Frito-Lay product and get a Pepsi product for half price. This way people would be more enticed to try the Pepsi products and eventually buy the beverage more on its own. An advantage of this would be that PepsiCo could continue having great profitability from the more popular product and could improve the profitability of the less popular brand. Consumers who may have chosen a different product if the “pairing” of the two PepsiCo products wasn’t offered will now want buy the products that save them money.
2. The noncarbonated beverage product is a growing market throughout the world. As another alternative, PepsiCo could work harder at promoting and selling these products across more areas in the world. With the world more involved in becoming healthy, consumers are leaning towards beverages that are not carbonated. PepsiCo’s noncarbonated beverage products could provide more places with healthier options to choose from. They haven’t really invested a lot in the bottled water segment in international markets and this could be a quite profitable area for the company, also. Promoting the noncarbonated beverages could gain PepsiCo larger shares of the market and at the same time improve the division’s profits and revenues. A drawback of this alternative is that it may be costly to try and promote and distribute these products into the international areas. For this idea to be successful a lot of time and money must be put in so that the promotions are strategically done and placed in areas that will see the most results.
3. A third option for PepsiCo would be to focus on developing a better understanding of consumer taste preferences. Flavor is an extremely important part of a products selling ability. Consumers don’t want to purchase products that they dislike the taste of and flavor preferences differ from person to person as well as from place to place. PepsiCo is already aware of these factors but they can dig deeper into this in order to better please their customers, especially in the international...

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