pepsi presentation

1. PepsiCo
Sebastian Cummings
John Dunn
Tim Flory
Michelle Hubbell
Nellie Echevarria
Asia Smith
Amanda Sullivan

2. Introduction
• Headquarters located in Harrison, New York
• 5 Brands (Frito Lay, Pepsi, Tropicana, Quaker, Gatorade)
• Products can be found in almost 200 countries
• 19 products generate over $1 billion in sales
• Product mix: 63% food and 37% beverages
• Main competitor is Coca Cola

3. History of PepsiCo
• Caleb Bradham invented the drink Pepsi in New Bern, North Carolina in
1898
• Patented in 1902
• Incorporated in 1919 in Delaware
• Pepsi was purchased by Loft Candy in 1933.
– Bottle size increased to 12 ounces compared to 6 ounces
– The low cost differentiation strategy was successful, allowing the company to expand in
the cola industry.
http://www.youtube.com/watch?v=mpXw2sbNg6Q

4. History
1960’s 1970’s
• New Products: Diet Pepsi, • Sales passed $3 billion mark
Mountain Dew, Frito’s, Lay • More than one Frito-Lay plant
potato chips, Cheetos, Ruffles, opened each year
Rold Gold Pretzels, Doritos • First 2-liter bottle and recyclable
• Merged with Frito Lay plastic bottles
• Introduced red, white and blue • Mountain Dew made it on top 10
packaging selling soft drinks and Pepsi was
• Entered Japanese and Eastern number one
European Markets • Entered Russian market

5. History
1980’s 1990’s
• Sales passed $15 billion mark • Profits exceeded $1 billion
entering top 25 of Fortune 500 • Sales hit $20 billion mark
• New Products: Tostitos, Caffeine • New Products: Sunchips,
Free Pepsi, Slice and Diet Slice, Expansion of Tostado’s and
7Up, Mug Root Beer Cheetos, Aquafina, Wavy Lays
• Nutrition Labels • Freshness dating
• Largest company in beverage • Low/No Fat products
industry • Launch of official website
• Available in 150 countries • Purchase of Tropicana

6. Industry
•Who are the major competitors of PepsiCo?
•International market vs. US Market net revenue
•What are the some of the brands that competitor sell?
•Marketing and advertising strategies used by competitors

7. Mission Statement
Mission
Our mission is to be the world’s premier consumer products company (3) focused on convenient
foods and beverages (2). We seek to produce financial rewards to our investors (5) as we
provide opportunities for growth and enrichment to our employees (9), our business
partners, and the community in which we operate (1) (8). And in everything we do, we strive
for honesty, fairness, and integrity (6).
Vision
PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate –
environment, social, economic – creating a better tomorrow than today. Our vision is put
into action through programs and a focus on environmental stewardships, activities to
benefit society, and a commitment to build shareholder value by making PepsiCo a truly
sustainable company.

8. Mission Breakdown
1. Customers: provide opportunities for growth and enrichment to the communities
in which we operate
2. Products or services: focused on convenient foods and beverages
3. Markets: to be the world's premier consumer products company
4. Technology:
5. Concern for Survival, Growth, and Profitability: seek to produce financial rewards
to our investors
6. Philosophy: In everything we do, we strive or honesty ,fairness, and integrity
7. Self-Concept:
8. Concern for Public Image: Seek to produce financial rewards to our investors as
we provide opportunities for growth and enrichment to our employees, our
business partners, and the communities in which we operate.
9. Concern for Employees: provide opportunities for growth and enrichment to our
employees

9. Revised Mission
Our mission is to be the world’s premier consumer products company (3) focused on convenient foods
and beverages (2) while addressing social and environmental issues (7). We seek to produce
financial rewards to our investors (5) as we provide opportunities for growth and enrichment to
our employees (9), our business partners, and the communities in which we operate (1) (8). And in
everything we do, we strive for honesty, fairness, and integrity (6) while protecting Earth’s natural
resources through innovation and more efficient use of land, energy, water, and packaging in our
operations (4) .
Revised Mission Statement Breakdown
• Customers: provide opportunities for growth and enrichment to the communities in which
we operate
• Products or services: focused on convenient foods and beverages
• Markets: to be the world's premier consumer products company
• Technology: protecting Earth’s natural resources through innovation and more efficient use
of land energy water and packaging in our operations.
• Concern for Survival, Growth, and Profitability: seek to produce financial rewards to our
investors
• Philosophy: in everything we do, we strive or honesty ,fairness, and integrity
• Self-Concept: addressing social and environmental issues
• Concern for Public Image: seek to produce financial rewards to our investors as we provide
opportunities for growth and enrichment to our employees, our business partners, and the
communities in which we operate.
• Concern for Employees: provide opportunities for growth and enrichment to our employees

10. Input
Matrices

11. External Factor Evaluation Matrix
Key External Threats Weight Rating Weighted Score
Opportunities
1. International demand for bottled water has increased 0.12 3 0.36
2. Large carbonated drink market in Asia and Europe 0.09 2 0.18
3. 99% of American households have salty snacks in their homes 0.03 4 0.12
4. Higher demand for salt/fat free foods as well as baked and kettle products 0.07 3 0.21
5. Worldwide competition requires extensive advertising and promotion 0.03 3 0.09
6. High demand in US for non-carbonated beverages 0.09 2 0.18
7. Chip Market has an annual growth rate of 6.35% 0.06 4 0.24
Threats
1. Downturn of economy results in consumer need for less costly products 0.12 2 0.24
2. Major competitors have 9% higher market share in China 0.06 2 0.12
3. Contamination can quickly destroy consumer confidence 0.03 3 0.09
4. Carbonated drink market has declined 4% in the US 0.09 4 0.36
5. Major competitor holds largest market share in the US 0.07 2 0.14
6. Environmental campaign against plastic containers of bottled water impacts sales 0.04 3 0.12
7. Consumers have had a change in taste 0.1 3 0.3
Total 1 2.75

12. Internal Factor Evaluation Matrix
Key Internal Threats Weight Rating Weighted Score
Strengths
1. Controlled cost by decreasing cost of goods sold 0.03 3 0.09
2. New plant uses 22% less water and 38% less energy than other Pepsi factories 0.05 2 0.1
3. Expanding into global markets and increasing international revenues 0.11 3 0.33
4. Develop new drinks and snacks for changing taste of consumers and health 0.09 4 0.36
concerns
5. Projects and alliances around the world 0.03 2 0.06
6. Expanding products allows bottlers to gain retail shelf space 0.05 4 0.2
7. More diverse than major competitors 0.07 4 0.28
8. Savory snack industry leader 0.09 4 0.36
9. Use all available media to promote product 0.07 3 0.21
Weaknesses
1. Increase in cost 0.1 2 0.2
2. Decrease in net income 0.12 2 0.24
3. ROA dropped 0.03 1 0.09
4. Inventory turnover decrease 0.04 2 0.08
5. Long term debt increased 0.04 1 0.04
6. Constantly have to develop new products to meet demands 0.08 3 0.24
Total 1 2.88

13. Matching
Matrices

14. SWOT Matrix
Strengths
1.) Controlled cost by decreasing cost of goods sold
2.) New plant uses 22% less water and 38% less energy than
other Pepsi factories
3.) Expanding into global markets and increasing international
revenues
4.) Develop new drinks and snacks for changing taste of
consumers and health concerns
5.) Projects and alliances around the world
6.) Expanding products allows bottlers to gain retail shelf
space
7.) More diverse than major competitors
8.) Savory snack industry leader
9.) Use all available media to promote product
Opportunities SO Strategies
1.) International demand for bottled water has increased New Commercial/FB or Twitter promotion (O5, S9)
2.) Large carbonated drink market in Asia and Europe New healthier salty snack (O3, O4, O7, S8)
3.) 99% of American households have salty snacks in their homes Priority to Chinese market (O2, O1, S3)
4.) Higher demand for salt/fat free foods as well as baked and kettle
products
5.) Worldwide competition requires extensive advertising and promotion
6.) High demand in US for non-carbonated beverages
7.) Chip Market has an annual growth rate of 6.35%
Threats ST Strategies
1.) Downturn of economy results in consumer need for less costly products Lower Prices (T1, S8)
2.) Major competitors have 9% higher market share in China New healtier drink (T7, S4)
3.) Contamination can quickly destroy consumer confidence Enviormentally friendly bottles (T6, S5)
4.) Carbonated drink market has declined 4% in the US Focus marketing in Chine on culture (T2, S3)
5.) Major competitor holds largest market share in the US
6.) Environmental campaign against plastic containers of bottled water
impacts sales
7.) Consumers have had a change in taste

15. Weaknesses
1.) Net revenues down
2.) Increase in cost
3.) Decrease in net income
4.) ROA dropped
5.) Inventory turnover decrease
6.) Long term debt increased
7.) Constantly have to develop new products to meet
demands
Opportunities WO Strategies
1.) International demand for bottled water has increased Expand chip market to maximize growth (O7, W1)
2.) Large carbonated drink market in Asia and Europe More attention to non carbonated and less salty snacks
(O6, O4, W7)
3.) 99% of American households have salty snacks in their homes Joint venture in Asian drinks (O2, W3)
4.) Higher demand for salt/fat free foods as well as baked and kettle products
5.) Worldwide competition requires extensive advertising and promotion
6.) High demand in US for non-carbonated beverages
7.) Chip Market has an annual growth rate of 6.35%
Threats WT Strategies
1.) Downturn of economy results in consumer need for less costly products Market research to find tastes for new products (T7,
W7)
2.) Major competitors have 9% higher market share in China Lower prices, promote specific products of smaller
portions (T1, W4, W5)
3.) Contamination can quickly destroy consumer confidence
4.) Carbonated drink market has declined 4% in the US
5.) Major competitor holds largest market share in the US
6.) Environmental campaign against plastic containers of bottled water impacts
sales
7.) Consumers have had a change in taste

16. SPACE Matrix Calculations
FINANCIAL POSITION (FP)
Factors Rating
Long-term debt obligation 2 Calculations
Net income 3
Net revenue 6
Return on investment 2 SP Average: -11/5= -2.2 IP Average: 26/6= 4.33
Inventory turnover 4
Earnings per share 3
CP Average: -14/6= -2.33 FP FP Average: 20/6= 3.33
TOTALS 20
INDUSTRY POSITION (IP)
Factors Rating Directional Vector Coordinates: X-axis: .33 + (4.33) = 2.00
Growth potential 6 Y-axis: -2.2 + (3.33) = 1.13
Profit potential 5
Financial stability 4
Extent leverage 2
Resource utilization 2
Ease of entry into market 7
TOTALS 26
STABILITY POSITION (SP)
Factors Rating
Technological changes -3
Price range of competing products -2
Barriers to entry -1
Competitive pressure -3
Price elasticity of demand -2
TOTALS -11
COMPETETIVE POSITION (CP)
Factors Rating
Market share -3
Product quality -2
Product life cycle -3
Customer loyalty -2
Technological know how -3
Control over suppliers/distributors -1
TOTALS -14

17. SPACE Matrix
CONSERVATIVE 10 AGGRESSIVE
9 -Backward, forward, horizontal integration
-Market penetration, market development,
8 product development
-Related and unrelated diversification
7
6
5
4
3
2
1
-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 .
1 2 3 4 5 6 7 8 9 10
DEFENSIVE -1 COMPETITIVE
-2
-3
-4
-5
-6
-7
-8
-9
-10

18. Boston Consulting Group Matrix
Divisions Revenue % Relative Industry
*in Millions
Revenues Market Share Market Sale
Frito-Lay 12,507 28.9 .90 +.04
Quaker Foods 1,902 4.3 .85 +.01
Latin American Foods 5,895 13.6 .65 +.15
Pepsi American Beverages 10,937 25.2 .75 -.15
UK and Europe 6,435 14.8 .55 +.18
Middle East, Africa & Asia 5,575 12.8 .70 +.20
Total 43,251 100 - -

19. Boston Consulting Group Matrix
Relative Market Share
Position
High 1 Medium 0.5 Low 0
High 20
12.8
14.8
28.9 13.6
4.3
Medium 0 Stars Question Marks
Cash Cows Dogs
25.2
Low -20

20. Internal/External Matrix
IFE Total Weighted Scores
4.0 3.0 2.0 1.0
I II III
3.0
IV V VI
2.0
VII VIII
* IX
1.0
Hold and Maintain
- Market Penetration
- Product Development

21. Grand Strategy Matrix
Rapid Market
Growth
Quadrant II Quadrant I
1.Market Development
2.Market Penetration
3.Product Development
4.Forward Integration
5.Backward Integration
6.Horizontal Integration
7.Related Diversification
Weak Competitive
Position Quadrant III Quadrant IV
* Strong Competitive
Position
Slow Market
Growth

22. Decision
Matrices

23. Data Collection Matrix
SWOT SPACE BCG IE GSM Total
Forward Integration 3
Backward Integration 3
Horizontal Integration 3
Market Penetration 5
Market Development 4
Product Development 5
Related Diversification 4
Unrelated Diversification 2
Retrenchment 2
Divestiture 1
Liquidation 0

24. QSPM
Strategic Alternatives
1 2
Healthy Lifestyle Alliance With Diet
Campaign Program
Key Factors Weight AS TAS AS TAS
Opportunities
1 International demand for bottled water has increased 0.12 --- ---
2 Large carbonated drink market in Asia and Europe 0.09 --- ---
3 99% of American households have salty snacks in their homes 0.03 2 0.06 1 0.03
4 Higher demand for salt/fat free foods as well as baked and kettle products 0.07 4 0.28 3 0.21
5 Worldwide competition requires extensive advertising and promotion 0.03 3 0.09 4 0.12
6 High demand in US for non-carbonated beverages 0.09 3 0.27 4 0.36
7 Chip Market has an annual growth rate of 6.35% 0.06 1 0.06 2 0.12
Threats
1 Downturn of economy results in consumer need for less costly products 0.12 2 0.24 1 0.12
2 Major competitors have 9% higher market share in China 0.06 --- ---
3 Contamination can quickly destroy consumer confidence 0.03 --- ---
4 Carbonated drink market has declined 4% in the US 0.09 3 0.27 2 0.18
5 Major competitor holds largest market share in the US 0.07 --- ---
6 Environmental campaign against plastic containers of bottled water impacts sales 0.04 --- ---
7 Consumers have had a change in taste 0.1 3 0.30 2 0.20
1.00

25. Strategic Alternatives
1 2
Healthy Lifestyle Alliance With Diet
Campaign Program
Key Factors Weight AS TAS AS TAS
Strengths
1 Controlled cost by decreasing cost of goods sold 0.03 --- ---
2 New plant uses 22% less water and 38% less energy than other Pepsi factories 0.05 --- ---
3 Expanding into global markets and increasing international revenues 0.11 --- ---
4 Develop new drinks and snacks for changing taste of consumers and health concerns 0.09 3 0.27 4 0.36
5 Projects and alliances around the world 0.03 --- ---
6 Expanding products allows bottlers to gain retail shelf space 0.05 3 0.15 4 0.20
7 More diverse than major competitors 0.07 4 0.28 3 0.21
8 Savory snack industry leader 0.09 3 0.27 2 0.18
9 Use all available media to promote product 0.07 4 0.28 3 0.21
Weaknesses
1 Increase in cost 0.10 2 0.2 1 0.10
2 Decrease in net income 0.12 --- ---
3 ROA dropped 0.03 --- ---
4 Inventory turnover decrease 0.04 2 0.08 1 0.04
5 Long term debt increased 0.04 1 0.04 2 0.08
6 Constantly have to develop new products to meet demands 0.08 3 0.24 4 0.32
Total 1.00

26. Recommendations
• Healthy Lifestyle Campaign
• New products
• New packaging
• Partnerships
•Schools, offices, etc

27. Epilogue
•Received several awards:
•“Respect Award” from Gay, Lesbian and Straight Education Network
•“Best Companies for Multi-Cultural Women” list by Working Mother magazine
•Listed in the top 20 'Ideal Employer MBA Ranking' in Fortune magazine
•Paired with CBS to launch first-ever video player packaged in a print ad
•Kicked off partnership with the NFL
•Major League Baseball multi-year sponsorship
•New York Mets and New York Yankees
•PepsiCo's Doritos and Pepsi Max issued an ad contest
•$5 Million in Prizes and air time during Super Bowl XLV
•YouTube - DORITOS® - Pug Attack -- Crash the Super Bowl 2011 Finalist
•Partner of the new Meadowlands Stadium
•Home of the New York Jets and New York Giants
•Burger King Corporation signed multi-year agreement with PepsiCo
•Exclusive soft drink supplier in more than 1,000 restaurants
•Latin America and Caribbean region

28. • Social Vending System
– Debut at National Automatic Merchandising Association’s One Show in Chicago, April
27-29
• Acquired approximately 66% of the outstanding shares of Wimm-Bill-
Dann Foods OJSC, Russia's leading branded food-and-beverage company
• Donated $1.5 million towards Japan relief and recovery