PEPSI Final essay

Strategic management process consists of three stages: strategy formulation, strategy implementation and strategy evaluation. The scope of the project is to discuss the strategies adopted and applied by “Pepsi Cola”, Pakistan and also decide which alternative strategy will benefit the firm most.

Moreover the reject also discusses the analysis of competition, market growth and trend, opportunity analysis and strategies for creating competitive advantage adopted by ‘Pepsi Cola’ Pakistan. Purpose of this project is to study the strategies which Pepsi is doing in Pakistan market for its products. Pepsi International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. In Pakistan It also has proved itself to be the No. 1 soft drink. Now a days Pepsi is recognized as Pakistanis National drink. Pepsin’s greatest rival is Coca Cola.

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Coca Cola has an international recognized brand. Coke’s basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining at No. L position in Pakistan. PepsiCo. At stage 1 in FEE, FIFE have aggressive responses as well as strong competitive position as compare to Coca Cola and Gourmet Cola that also indicate that the PepsiCo. Is a market leader. PepsiCo. At stage 2 in TOWS, SPACE, II and GRAND strategy Matrix again have an aggressive response which helps and identifies different strategies to choose and implement.

PepsiCo. At stage 3 in SPACE Matrix is good in for choosing the strategy of market penetration that is to increase its market share through tie up with Major Showrooms, Computer Centers & Restaurant and clubs. History of Pepsi Cola Pakistan The market in Pakistan is surely dominated by Pepsi. It has proves itself to be the No. 1 soft drink in Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971 , first plant of Pepsi was constructed in Manual, and from their after Pepsi is going higher and higher. Pepsi is the choice soft drink of every one.

It is consumed by all age groups because of its distinctive taste. Compared with other Cola in the market, it is a bit sweeter and it contributes greatly to its liking by all. Consumer’s survey results explain the same outcome and Pepsi has been declared as the most wanted soft drink of Pakistan. Pepsin’s greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke’s basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No. Position in Pakistan. In coming future Pepsi is also planning to enter into the field of fruit rinks. For this purpose it has test marketed its mango juice in Karachi for the first time. When Pepsi was introduced in Pakistan, it faced fierce competition with pup, lemon and lime drinks, which was established during 1968, in Manual. Pepsi introduced its lemon and lime, “Teem” to compete with pup. It successfully, after some years, took over pup, and this enhanced Pepsin’s profits and market share.

In Pakistan, Pepsi with pup enjoys 70% of the market share where as the coke just has 20% markets share. Now a days PepsiCo. Is focusing on youngster’s best choice Mountain Dew as a energetic soft drinks. Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are Pepsin’s strength. Pepsi has given franchise to these bottlers. Bottlers produce, distribute and help in promoting the brand. VISION “PepsiCo responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today. Pepsi cola international vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. MISSING STATEMENT Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

REVIEW OF MISSION STATEMENT To be a result oriented and profitable Company by consistently improving market share, quality, diversity, availability, presentation, reliability and customer acceptance. To ensure cost consciousness in decision making and operations without compromising the commitment to quality. To set up highly ethical business standards and be a good corporate citizen, contributing towards the development of the national economy and assisting charitable causes. To adopt appropriate safety rules and environment friendly policies.

SOOT ANALYSIS OF PEPSI COLA STRENGTHS: Pepsi cola has a brand name that holds its own prestige in the world market. The multinational entity of the Pepsi Cola Pakistan gives it an edge upon other competitors. The management of this beverage company comprises of one of the most professional people and the strong financial firmness guarantees it solid backing to sell its products. It is rated as the Pakistanis number one cold drink and is famed for its internationally well-known brand name “Pepsi Cola”. The product quality has improved due to upgraded quality of packaging and the ameliorated liquid in comparison to its competitors.

My personal experience is that the product is far better than any product of it’s kind and also the improvement in packaging and the commencement of plastic shells has received a favorable Response from the dealers and the loaders. The regular supply of the products is another strength of the company. The reduces are regularly supplied to the dealers through proficient means of delivering and distribution has given Pepsi Cola Pakistan an added Advantage. Pepsi Cola trucks supply the products regularly and always have the desired products for the dealers.

Its marketing strategy is very aggressive which aids it in further and incessant production and distribution of its products. It gives trade offers to its dealers for storing more and more Pepsi Cola products and the signage strategies and agglomeration of all the marketing strategies proves that it has a very aggressive marketing Strategy. This will help Pepsi Cola Pakistan in strengthening its integrity in the market. The location of the Pepsi plant is utilized that all major markets Of Punjab are within the reach Of the Pepsi Plant within 30-45 minutes.

WEAKNESS: PepsiCo. Does not enjoy the number one position at international level and is far away from leader Coca-cola in the international market. Pepsi target only young customers in their promotions not focusing different age groups social classes. One of the major weaknesses as in majority of companies is the lack of co- ordination between the management and the worker. In short there is a weak point in their Human Resource management. Workers feel that they are being exploited and are not given the remuneration that they deserve.

The decision making process in the company is highly centralized and the workers feel that there exists no proper authority existing in the firm. The salesmen feel Dissatisfied for they are totally powerless to make any decisions themselves In dealing with their buyers they have not the slightest authority to allow them any credit or discount. OPPORTUNITY: Company has brand equity in the eyes of customers, so its new Products can easily penetrate in the market. The company may also diversify its business in some other potential business. PepsiCo May tie up or liaison with major showrooms, computer centers &Restaurant.

Incorporated drinks(Often a substitute for water) are the fastest-growing part of the industry Catering to Health Consciousness of People. There is Lower entry barriers due to presence of highly distribution system for other Pepsi products. PepsiCo may focus on technological advancement & utilization of Internet promotion such as banner, ads and keywords can increase their sales, and more computerized Manufacturing and ordering processes can increase their efficiency. Fake beverages by the name of PepsiCo are being supplied by unknown people. Such activities really hamper the company’s name and its brand originality.

Above all the fake beverages supplied are almost similar to the taste of the original PepsiCo. Brand and not everyone can decipher the difference between the original and the fake product. This is in fact a great threat to PepsiCo. For unworthy people is taking advantage of its brand name and spoiling its good name in the market The greatest affect is on the revenue from the rural areas where mango drinks take over. However this is one factor that PepsiCo cannot do anything about for it is not in their hands. If the mango season is to come then it will ND nothing can be done about it.

The main competitor of the company is the Coca Cola. At the international level, PepsiCo. Has a very strong competition with Coke. Coke has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi. Cola drinks are not good for the health so the awareness level of the people is in creasing which is a big threat to the company. SW T STRENGTHS: Strong Multinational (Brand Equity) Strong & Vast Distribution Channels Lack Of Capital Constraints Record Market Share Strong Brand Portfolio Aggressiveness In The Market (Market Leader)

Brand Promotion & Sponsorship Ta resting Only Young Customers Political Franchises Centralized Decision Making Decline In Taste Motivational Factor Not All Products Bear The Company Name PepsiCo New Products Can Easily Penetrate In The Market. Incorporated Drinks Are The Fastest-Growing Industry Demand Of Pepsi Is More Than Of Competitor Changing Social Trends (Fast Foods) Internet promotion And Ordering Processes May Tie Up or Liaison With Major Showrooms, Computer Centers THREATS: Non-Carbonated Substitutes (The Mango Season) Beverage Industry Is Mature Fake Products (Imitators)

Competitor’s Schemes Strong Competition With Coca-Cola Company EXTERNAL ENVIRONMENT The macro environment consists of the larger societal forces that affect the micromanagement. The external factors are not under the control of the strategists; they can just observe them and make strategies in light of these factors. Some of these factors are given below: Demographic Factors: Age The requirements of different age groups are different. PepsiCo. Should target that age group that consumes it the most and make promotional strategies according to their behavior. O their main target is the young generation. Education A company has to make promotional strategies keeping in view the customer level. If the percentage of education is high in a country then through advertisements people can be made well aware of their product and can convey their message easily. Promotion and education has a direct relationship. Population Distribution Population distribution means how much population lives in urban areas and rural areas. In Pakistan 35 % population resides in urban areas and 65% population lives in rural areas.

PepsiCo. Is focusing on urban areas as people there are more inclined towards such beverage while people in rural areas re more inclined drinking lassie and dies drinks. Population Density It means number of people in one square km per area. Punjab has the largest population density as compare to other. Pepsi sales are more in Punjab as compared to the sales in other provinces. Economic Factors: Income and Income per Capita Fifth income level Or per capita income Of the people increases, it will have a positive effect on the consumption of Pepsi.

Inflation If the country faces inflationary trend in the market, the price of the Pepsi will ultimately increase which will lower its demand. Consumption Behavior Pakistan is a consumption oriented society. Due to demonstration effect the people are more inclined towards consumption than saving. So the people of Pakistan spent heavily on food items. Hence Pepsi has a good market share in the present circumstances. Income Distribution It means how much is in the hands of rich and poor class.

In Pakistan rich people posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced distribution of income in the country, the consumption of the people will increase hence increasing the sales of beverages as well. Payment Mod As the use of plastic money is increasing the consumption pattern of the people are increasing. Although it will have a low affect on the consumption of Pepsi. Employment Opportunities As employment opportunities increase the living standard of the people increase and the people consume more.

Aggregate Demand In case of Pepsi, aggregate demand of the product increases in the season of summer as the hot weather makes the consumers want to drink more. Aggregate Supply In summer season to cope up with the increasing demand they have to increase the aggregate supply of their product. Economic policies Some of the economic policies which can affect the market of Pepsi are discussed below: Fiscal Policy It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise having negative affect on its consumption.

Monetary Policy Monetary policy is made to restrict or increase the supply of money in the market. If policies are made to restrict the flow of money in the market, inflation can be controlled hence increasing the real income of the people which will ultimately affect the consumption of Pepsi. Price policy If price of Pepsi is increased its demand will decrease and vice versa. Income Policy If income of the people will increase their purchasing power will increase and hence increasing the market share of Pepsi. Physical Factor: Region Pakistan is divided into different geographical regions.

Marketing and sales of Pepsi is different in different geographical regions. In hot areas its demand is more. City Size The cities which are densely populated the consumption of Pepsi is more. Climate Pepsi is more suitable for humid or hot weathered countries like Pakistan. It is a source of refreshment when a person is thirty due to the hot weather. Infrastructure Roads are the basic need for transportation of Pepsi from one place to another. Pepsi cannot open factories in every city of Pakistan so it has to rainspout it to other cities where Pepsi is demanded.

Electricity is the basic necessity for production of any product. Constant load shedding slows down the process of production which leads to less production and low market share. Technological Factors: Research and Development Through research and development quality of the product can be improved or better techniques or machinery can be developed which can increase the production. When technology is advance the supply of the product increase hence the company experiences growth in their business.