Pepsi Company Strategic Management

Pepsi Company products

Pepsi Company sells a wide portfolio of products ranging from beverages to snacks in their markets across the globe. These products fall under the main categories, namely fun-for-you, good-for-you, better-for-you, and 22 mega brands (Good-for-you products, n.d.). Fun-for-you products are at the centre of the company’s food and beverage product sales with great taste being important. The products are Pepsi, Pake-taxo, Doritos and Simba.

Better-for-you products have ingredients added based on the globally recommended quantities to ensure healthy eating and drinking. Products in this category include low sugar and fat content products such as Twists, and baked lays that are not only delicious but also nutritious. Good-for-you products offer customers good nutrition with. This category includes functional benefit products, for example, those designed to enhance athletic performance. They include Quaker, Tropicana, Izze and Stila. In fact, many people participating in physical activities, such as athletics, have remained committed consumers. It is documented that each brand enables the organisation to achieve more than $1 billion (2012 PepsiCo Annual Report, n.d.).

Business model

The firm uses a business model that is based on social and environmental responsibility. This approach focuses on a commitment to sustainable growth and empowering people to achieve organisational trust (Kapferer, 2012). The sustainability model results in an innovative and result-oriented culture through effectiveness and efficiency in all operations. People empowerment enables them to be creative and take personal initiatives for the best interests of the company. The company focuses on improving the aspects of trust and responsibility to ensure continued market growth through customer trust and improved process efficiency.

The business model is driven by six operating principles. First, the company cares for its customers, which implies striving to achieve customer satisfaction. Second, products are designed based on organisational belief and trust. Third, honesty is adopted in all operations. Fourth, the balance between short and long-term goals is maintained for sustainability in operations of the organisation. Fifth, enhancing workplace diversity and inclusion of sources of new ideas, innovativeness, and market growth. Finally, the model is based on mutual trust and respect for all stakeholders to enhance collaboration and communication for common objectives. In the business model, advertising is a major aspect of operations because it contributes to brand recognition across the world (Kapferer, 2012).

Increasing revenue

The business establishment increases revenue through six main ways. First, the company reinforces its current value drivers, which are the major global brands retailed in the best markets. Second, the organisation ventures into various markets through advertising its products in the good-for-you category. Third, the company concentrates on the benefits achieved on the premises of the firm’s diverse products that complement each other to achieve cost advantage, capability sharing, and commercial benefits. Fourth, the company continually develops new capabilities through an organisational structure that fosters entrepreneurship at the country and regional levels. Fifth, Pepsi Company increases revenue through teamwork and organisational culture of innovativeness with customer satisfaction at the centre of operations. Finally, the company focuses on sustainability and performance with long-term goals as key drivers.

PepsiCo marketing

In its marketing strategy, the firm realises the importance of ensuring responsible and honest communication (Kapferer, 2012). Marketing of the company’s products is based on different localities. Local or regional bottlers determine what to market to consumers based on their tastes and demand, among other aspects of the markets. The organisation enhances promotion and communication mainly through celebrity endorsement.

Furthermore, event sponsorship, newspapers, the internet and other media channels are important platforms utilised in marketing. Promotion in outlets is achieved through great pricing and discounts, which attract customers. In the face of technological advancements, e-marketing through short messages and email marketing are important (Fripp, 2013). In addition, the marketing department of the firm has adopted social media platforms. Examples of these include Facebook and Twitter, among others.

Challenges facing PepsiCo

PepsiCo faces the challenge of economic downturns, which affect the buying power of consumers because they tend to prefer value brands to loyalty brands (2012 PepsiCo Annual Report, n.d.). This is a big challenge because the company has to continue with its marketing and customer retention strategies. Environmental issues pose a challenge to PepsiCo because the firm company has to comply with strict environmental regulations in the waste disposal and reuse. The market is continuously being health-conscious, which implies that the company must continue to produce and increase low sugar and fat products. There is the challenge of intense competition from Coca Cola and Gourmet Cola (Fripp, 2013).

Recommendations

From the report, it is apparent that PepsiCo remains a strong global brand that is committed to achieving its mission and strategic objectives. Popular for the company’s customer focus and quality of products, there are no major strategic transformations needed. However, the company could improve in three major areas. First, considering the growth in healthy eating, the company should continue growing the human sustainability approach in product design. Second, enhanced participation in social development projects, especially in the developing world. Finally, the company can grow its market share by targeting the ageing population.

References

2012 PepsiCo Annual Report. (n.d.). Web.

Fripp, G, 2013, PepsiCo’s Strategic Focus. Web.

Good for-you products. (n.d.). Web.

Kapferer, J. (2012). The new strategic brand management advanced insights and strategic thinking (5th ed.). London, United Kingdom: Kogan Page. Web.