Pepsico Case Analysis

In: Business and Management

Submitted By elleb211
Words 1046
Pages 5
PepsiCo
Problem
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 portfolio restructuring through acquisitions, product innovation, international expansion, and close relationships with distribution allies. All of this restructuring proved positive for the company and they saw success in many areas. They saw their international snack volume grow by 9 percent and the international beverage volume increased by 8 percent in 2007. However, PepsiCo’s international operations were much less profitable than its businesses operating in North America. The company did notice opportunities for growth in these international markets, though. PepsiCo executives expected that, by 2010, China and Brazil would be the two largest international markets for snacks. They also found that it could grow international sales through its Power of One Strategy. Through research PepsiCo concluded that the average consumption of carbonated soft drinks was more than double in the United States compared to developed countries. This shows PepsiCo that there is a plethora of room to expand their carbonated beverage industry outside of the United States.
Strategic Alternatives 1. One alternative for PepsiCo to strengthen itself would be to pair its more popular products in a…...

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