Pepsi is one of the most popular and successful beverage brands in the world. But, like any company, it has its strengths and weaknesses. In this section, we’ll take a look at the SWOT analysis of Pepsi, its strengths, weaknesses, opportunities, and threats.
An Overview of PepsiCo
When it comes to the beverage and snack food business, PepsiCo has the upper hand, and it is widely known throughout the world. This SWOT analysis will give you more insights about this firm.
Gatorade, Frito-Lay, Quaker, and Tropicana are just a few of the great brands that make up this premier worldwide food and beverage business.
A large number of their food and snack brands hold prominent and leading positions in the United States and international food and snack industries. According to retail metering channel estimates, PepsiCo and The Coca-Cola Company contributed 23% and 20% of the US beverage market, respectively, in 2017.
For the purpose of this article, we are going to examine the strengths, weaknesses, opportunities, threats, and other internal factors that have contributed to the growth and development of Pepsi Company.
In-Depth Pepsi Swot Analysis
The Most Valuable Global Brand
Forbes did research in 2019 and found that PepsiCo’s brand is worth about $18.8 billion. This makes it the 29th most valuable brand in the world.In 2020, Forbes rated PepsiCo as the 87th biggest corporation in the world.
The Power of One Strategy
When you focus on one thing, you have more power. Because of its wide range of “food & snacks” and “beverages” brands (such as Frito Lays, Cheetos, Doritos, and Kurkure), PepsiCo is a more sustainable company. Food products of the company accounted for 54% while beverages had 46% of the company’s revenue.
A Highly Diversified Portfolio
When it comes to the food and beverage industry, PepsiCo’s key strength is its wide range of products. There are 22 brands in PepsiCo, including Pepsi, Pepsi Max, Diet Pepsi and Fritos. Each brand produces at least $1 billion in yearly retail sales.
Because of its wide range of products, PepsiCo was able to meet and even exceed its goals, which was not the case for other companies.
Strong Global Presence
PepsiCo has taken advantage of its worldwide reach by participating in over 200 countries. Because of PepsiCo’s global dominance, people are more familiar with the company and its products. As a result, PepsiCo has been able to go head-to-head with rivals like Coca-Cola.
This company employs a direct store delivery (DSD) strategy, which enables the delivery of drinks, snacks, and food directly to retail locations. Using DSD improves in-store marketing and gains the most exposure possible.
Dominance in The Market
Superior and dominating enterprises have the power to demand terms in the marketplace. In 2019, Pepsi has a 22 percent share of the US liquid refreshment drinks market, while Coca-Cola has a 20 percent share.In order to obtain a considerable amount of shelf space, it must exploit its position as a market leader by cultivating positive relationships with retailers.
A Marketing Strategy That Works
For the past 7 years, Pepsi has been the main sponsor of the Super Bowl halftime performance, which reaches an audience of more than 100 million people annually. In 2020, the Pepsi Super Bowl LII Halftime Show received 104.1 billion views.
An Iconic Youthful Brand
Pepsi has long aimed to appeal to a younger population. For many years, Pepsi has cultivated its reputation as a young brand. In the past, many of the most memorable advertisements were aimed at pre-teens and adolescents and had a fun aspect like sports, music, or other activities.
Weaknesses in the SWOT analysis of Pepsi
In the beverage and soft drink market, the company faces stiff competition from Coca-Cola. They’re always battling it out for first place. As a result, customers who aren’t as devoted to a single brand might easily switch to another.
Products Perceived as Unhealthy
The majority of PepsiCo’s soft drinks are viewed as unhealthy. This is why many people enjoy drinking its competitor’s product (Coca Cola).
They’re exclusively found in the food and beverage business, which means they might be detrimental in the long run. For the company to become a worldwide leader, they need to expand their product line.
Products That Fail
PepsiCo’s brand name has been tarnished by several unsuccessful products. Such products include “Crystal Pepsi,” which has allowed its rivals to expand.
Famous personalities or celebrities, who are the face of PepsiCo, might harm the company’s brand image if they say or do something wrong. The dangers of relying too much on celebrity endorsements cannot be emphasized enough.
Young people are frequently targeted in Pepsi’s advertising campaigns. However, value advertising is a trademark of Coca-Cola, which is not found in Pepsi.
Opportunities in The Swot Analysis of Pepsi
This company has great potential to improve the health consequences of their goods, and it should educate the public about them. The introduction of Diet Pepsi marks a step in the right direction.
Paperboat is a company that has seen significant growth in recent years. Paperboat is noted for its wide variety of tastes, including watermelon, raw mango, and more. It is possible that Pepsi might gain a greater market share by including similar tastes in its carbonated beverages.
Diversification into new markets is a great opportunity for businesses. There is no reason why they couldn’t do the same. Acquisitions can also be used to accomplish this goal.
Increasing their CSR efforts will help them fight the bad press that is hurting the company’s brand image and will also help the community around them.
PepsiCo just introduced new, healthier soft drink choices. Stevia, a sugar substitute, is used in the manufacture of 7Up.This might have a major impact on the brand. More of this type of investigation is required to improve the quality of the brand. Pepsi Next is a new sweetened cola from Pepsi that uses Stevia and sugar as sweeteners.
Competitors like Coca-Cola, Dr. Peppers, and Nestle are putting PepsiCo’s profits and market share at risk. The rivalry also challenges long-term economic sustainability since it raises the cost of defending market share with advertisements, promotions, and discounts to keep consumers.
Economic Slowdown or Recession
There is a chance that the company could soon experience a slowdown or perhaps a recession. During a recession, PepsiCo might lose money since its product assortment is mainly geared toward things that are often the first to be dropped by customers.
Pepsi had to lay off roughly 3300 workers during the recession of 2008-2009 as sales of beverages fell. The firm had to cancel its full-year outlook for the 2020–2021 fiscal year owing to market uncertainty. After its net profit declined from $1.41 billion to $1.34 billion in the first quarter of 2020, it cancelled its forecast of 4% sales growth for the year.
Competitors Adopt Technology More Effectively
New technology adoption rates determine whether or not companies succeed in today’s technologically advanced environment. PepsiCo’s competitors might have an advantage over the company if they are better at adopting innovations that change the game.
Businesses may suffer as a result of demographic and economic shifts in target markets. As the company’s customer base ages, these factors might have a negative impact on PepsiCo’s profitability and long-term viability.
Government Regulations and Laws
Pro-health policies have been more common in recent years as governments seek ways to combat lifestyle disorders and illnesses linked to the use of junk food and other unhealthy items. Most of PepsiCo’s products are unhealthy soft drinks and snacks, and if this trend keeps getting worse, it could hurt the company’s profits, its ability to stay in business, and even its very existence.
What is PepsiCo SWOT analysis?
PepsiCo’s SWOT analysis reveals the company’s strategies for staying at the top of the beverage and snack food markets and its position as the world’s second-largest food company. And also to find the company’s biggest strengths, weaknesses, opportunities, and threats.
What Is the Strategy of Pepsi Company?
Pricing decisions at Pepsi are influenced by the prices of their competitors and the needs of their customers. The company encourages customers to buy in bulk by offering lower per-ounce prices for larger quantities of Pepsi. In doing so, they are able to strengthen their existing channels of distribution.
Who Is Pepsi’s Target Market?
Pepsi’s target demographic consists of people in the United States and around the world who are in their teens to early 30s.
Many people all over the world enjoy drinking Pepsi. In recent years, it has widened its offerings to include nutritious options in the snack and drink markets. They’ve started making a profit, and the revenue from the brand is growing despite all the money they’ve put into advertising and technology.
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