PepsiCo: Turning Point Case Analysis
PepsiCo is an international company that deals with manufacturing foods and beverages, as well as the marketing aspects of the products. The company operates in more than 200 countries. In fact, they have employed over 285,000 people worldwide. The company has five main brands, including Tropicana, Gatorade, Pepsi-Cola, Quaker, and Frito-Lay (Michael 2). PepsiCo’s mission is to provide a healthier option that will improve the lifestyles for children through providing health products to homes, schools, and places specifically for fun. The company believes that through this approach, it will be able to sell its products and enhance the lives of kids.
The Case Issue
PepsiCo faces a wide range of social and ecological issues. These issues stem from the fact that in the recent past, there has been an increased awareness of the consumers about health related issues such as obesity. In fact, recent research has shown that obesity results from increased intake of calorie-rich, energy-dense, nutrient-poor foods that contain saturated fats and high amounts of sugar, and reduced physical exercise, which is associated with most of PepsiCo products (Wright, 730-732).
The company has a robust brand positioning and a relatively larger revenue development as compared to most of its competitors, which is attributable to the diversification of its brand. It has not only beverages but also food products. In addition, PepsiCo has strong brand endorsement through brand ambassadors and worldwide celebrities. Through many test challenges that have been conducted, it has been revealed that Pepsi is one of the most ideal and preferred products by consumers, which has seen its total revenue increase to 43.2 billion dollars in the year 2009. PepsiCo also has resilient marketing and distribution channels, with the new integral competency focused on developing new brands.
With the increase of consumer awareness of healthy diets, the use of sugar, fats, and salt has been viewed as a negative feature of the company. Indeed, the manufacturing of unhealthy products is the major weakness the company is facing. The company has also attempted to lobby against health establishments, which is a factor that has seen it spend more than 4.2 million dollars, thus decreasing its revenue. The company is also criticized of erupting ecological issues by emitting greenhouse gases into the atmosphere.
The company has a wide range of opportunities, such as investing in research that can help develop new healthy brands that have more nutrients than the current products. Indeed, the company can also change its strategies in marketing and adopt a more consumer-oriented approach to fit the consumer demands in the marketplace.
The company faces two major threats: the nitrogen revolution, a concept for preparing unhealthier and organic beverages and foods. Different scientists have indicated that none of the company’s brands is healthy. The company’s rival, the Coca-Cola Company, brings about another threat to the market share. In fact, Coca-Cola, which is the largest and globally known company in beverage production, poses a huge threat to the company based on the aspect of competitive advance.
Despite the challenges that PepsiCo faces, it has successfully built its empire on manufacturing and dispersing instantly recognized brands. The worldwide retail sales were estimated to be 108 billion US dollars in 2009, where 43.2 billion dollars represents the total net profit.
Recommendations and Positioning of the Company in Future
In order to explore the heights of success, PepsiCo Company should consider altering its business strategies and processes by decreasing the production of the unhealthy brand and focusing on healthy products. The company should collect feedback from its customer and potential customers concerning the best product that they would require currently and in the future. Therefore, the company, in this aspect, will be able to focus on the required change. Unless this happens, the company’s positioning in the future will not achieve its financial projections in terms of revenue production.
Michael Valente. PepsiCo’s Turning Point: Establishing a Role in a Sustainable Society. University of Western Ontario. 2011. Print.
Wright, Suzanne M., and Louis J. Aronne. “Causes of obesity.” Abdominal Imaging 37.5 (2012) :730-732. Print.