Soft Drink and Market Share Essay Example for Free

Soft Drink and commercialise place Sh are evidenceUsing the appropriate tools and processes taught in class, the group is required to develop business st scoregies for the organization. Guidelines below might sustain the group to prepare the written report. 1. Identify the firms existing vision and mission. Vision report 1. To be the cosmeas best bever progress confederation. Being the best means providing big(p) quality, service, cleanliness and value, so that their every customer is contented and happy with their products. 2. To increase the value of their takeholders enthronement through gross sales growth, cost control and wise investment of re offsets. Mision Statement 3.To be the worlds premier consumer Products familiarity focused on convenient food and beverages. We seek to produce sizable financial rewards 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 . 2. Develop vision and mission statement for the organization (if compulsioned). 3. Identify the organizations external opportunities and thr eliminates. External Opportunities and Threats a) Demographic divisors Age Pepsi should target that age group that consumes it the most and make promotional strategies according to their behavior.So their chief(prenominal) target is the unripe generation. commandment A company has to make promotional strategies keeping in view the customer level. If the percentage of knowledge is high in a country then through advertisements people chiffonier be do hale aware of their product and evoke convey their message considerably. Promotional and education has a manage relationship. b) Economic Factors Economic Policies Some of the economic policies which fire instill the market of Pepsico, it is a 1. Fiscal constitution ? It is the policy of taxes. If heavy tax is levied on pepsi then its price will rise having negative affect o n its consumption.2. Monetary Policy ? Is made to restrict or increase the supply of money in the market. If the policies are made to restrict the flow of money in the market, inflation can be controlled and so increase the real income of the people which will ultimately affect the consumtion of pepsi. 3. Price Policy ? If price of Pepsi is increase its demand will decrease and vice versa. 4. Income Policy ? If income of the people will increase their purchasing supply will increase and hence increasing the market share of pepsi. c) Physical Factors Region Marketing and sales of Pepsi is diverse in different geographical contributions.In hot areas its demand is much. City size The cities which are densely populated the consumption of Pepsi is more. Climate Pepsi is more suitable for hot weathered countries. It is a source of refreshment when a person is thirty due to the hot weather. Infrastructure Roads are the prefatorial need for transportation of Pepsi from one pl ace to another. d) Technological Factors Research and Development Through research and outgrowth quality of the product can be improved or better techniques or machinery can be developed which can increase the production. When technology experiences growth in their business.e) Political and Legal Factors Laws Formulation organization has given copy right to Pepsico so that another company cannot sell their product by the appoint Pepsi. The countries where laws are formulated, the strategies and activities of the company are different. Social Responsibility Is to provide its customers with clean and hygienic products so to do this they flip increased the use of disposable bottles. f) Social and Cultural Factors Social Status Pepsi is a well renowned grunge. People who are brand conscious will not drink beverages of less(prenominal)er cognise brands.They will try to show their status by drinking Pepsi which is known to all in all in all as a quality drink. Media I t is a very important factor for marketing. Media these days is a very effective can boast up sales to a great extent. g) Competitors Each of PepsiCos division has its close competitors. It has been find that most of their competitors are single-product line companies, giving them a more direct handle of the industry. PepsiCo will concord to compete with these strong competitors head on in order to maintain its market share. If PepsiCo is not on the lookout enough, its competitors may eat its market share.h) Emerging health / environment More Consumers are starting to eat and live healthy, but as we can see majority of PepsiCos products are not healthy (junk food and delicate drinks). 4. Construct an External Factor Evaluation (EFE) Matrix. EXTERNAL FACTOR ANALYSIS (EFE) ground substance KEY EXTERNAL FACTORS WEIGHT RATING heavy SCORE Opportunities Pepsico new products can easily penctrate in the market. 0. 10 4 0. 40 Noncarbonated drinks are the fastest-growing industr y. 0. 12 3 0. 36 Demand of Pepsi is more than Competitor 0. 07 3 0. 21 Changing kind trends (Fast Foods) 0. 09 3 0.27 Internet promotion and guild processes 0. 05 1 0. 05 May tie up or liaison with major showrooms, computer centre eating place 0. 06 2 0. 22 Threats Non-Carbonated substitutes (The Mango Season) 0. 15 3 0. 45 Baverage industry is mature 0. 11 4 0. 44 Fake products (Imitators) 0. 09 2 0. 18 Competitors schemes 0. 04 2 0. 08 besotted competition with Coca- skunk company 0. 12 2 0. 24 TOTAL 1. 00 2. 90 Assign rating between 1 to 4 for each key external factors Poor Response 1 AverageResponse 2 higher upAverageResponse 3 Superior Respons 4.5. Identify the organizations internal strengths and weaknesses. Internal Factors organisational Structure 1. Frito-Lay North America (FLNA) Frito-Lay North America manufactures, markets, sells and distributes salty and sweet snacks. Products construct and sold in North America include Lays and Ruffles bra nd potato chips, Doritos and Tostitos brand tortilla chips, Cheetos brand cheese-flavored snacks, Fritos brand corn chips, a variety of branded dips and salsas and Rold Gold brand pretzels. Low-fat and no-fat versions of several brands are also manufactured and sold in North America. 2.PepsiCo Beverages North America In recent years sales of non-carbonated beverages have grown steadily. 3. PepsiCo International Snack food businesses are growing fastest in the Asia pacific region si PI should give attention to these market to avail growth opportunity. Overall carbonated modest drink market has shown less than 1% growth over the past few years and all that growth is came from diet bats drinks and energy drinks. Consumer has shown an increasing interest in healthy alternatives to carbonated soft drinks, much(prenominal) as ready-to-drink teas, bottled water, sports drinks and juices. In 2004 more than one-third of PepsiCos sales came from spot (no trans fats) products. Internal Strengths Company Image It also is a reputable and is well known all over world. Perception of producing a high quality product. Quality Conscious They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo. intelligent Relation with Franchise Throughout its history it has a goodness relation with franchisers working in different areas of the world where they have the production facilities. Production Capacity It has the highest production capacity in South Asia. Market Share It has a highest market share Large no. of Diversity Business This is also its main strength as it ahs diversity in many businesses such as i. Pepsi beverages ii. Pepsi foods iii. Pepsi Restaurants. High Tech market-gardening The whole culture and business operating environment at Pepsi-Cola-West Asia has quick access to a change database an they use computers as business tools for analysis and quick finality making. Internal Weaknesses Decline in smack During the last years, it was published in Financial post that there has been big complaints from the customers with regard to the bad degustation that they experienced during the span of six months. Political Franchises Such as in Pakistan, Hamayun Ahkhtar is its franchisee who has a strong semipolitical support from a political party which is in opposition. In their era in government less taxes are imposed on them but relation increases as they come in opposition. So the weft is not appropriate as this thing is harmful to their image as well as the strategies. go around Term Approach They have a lack of emphasis on this in their advertising such as currently when they losses the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as nothing official astir(predicate) it. Weak Distribution They lack behind in catering the rural areas and just concen trating in the urban areas. Low Consumer Knowledge Unable to maximize local consumer knowledge. Lack of Soft Drink Lack of soft drink know-how as a result of diversified business units and generalist managers. 6. Construct Internal Factor Evaluation (IFE) Matrix.INTERNAL FACTOR ANALYSIS (IFE) MATRIX KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE Strengths salutary multinational (Brand Equity) 0. 11 3 0. 33 affectionate vast dispersion take 0. 10 4 0. 40 Lack of capital constraints 0. 07 3 0. 21 Record market share 0. 10 4 0. 40 Strong brand portfolio 0. 05 3 0. 15 aggressiveness in the market (market leader) 0. 06 3 0. 18 Brand promotion 0. 13 4 0. 52 Weakness Targeting only young customers 0. 10 2 0. 20 Political franchises 0. 07 2 0. 14 Centralized decision making 0.05 2 0. 10 Decline in taste 0. 08 1 0. 08 Motivational factor 0. 05 1 0. 05 Not all products bear the company name 0. 03 2 0. 06 TOTAL 1. 00 2. 82 Assign rating rate from 1 to 4 for ea ch key internal factors o Major weakness 1 o kidskin weakness 2 o Minor strength 3 o Major strength 4 7. Prepare a Strenght-Weaknesses-Opportunities-Threats (SWOT) Matrix, strategical Position and carry out Evaluation (SPACE) Matrix, Internal-External (IE) Matrix, stately Strategy Matrix, and Quantitative Strategic Planning Matrix (QSPM) as appropriate. Strenght-Weaknesses-Opportunities-Threats (SWOT) Matrix STRENGTHS failingES Brand promotion 1. Decline in taste Strong multinational (Brand Equity) 2. Targeting only young customers Record market share 3. Not all products bear the Strong vast distribution Channels company name Lack of capital constraints 4. Motivational factor Aggressiveness in the market (Market Leader) 5. Political Franchises Strong brand portfolio 6. Centralized decision making OPPORTUNITIES S O STRATEGIES W O STRATEGIES 1.PepsiCo new products can easily S1, S2, S3, O2, O3, O4 W2, O2 penetrate in the market Company can introduce new product or non- By introducing non-carbonated drinks Pepsi 2. Noncarbonated drinks are the fastest- carbonated drinks because it have good brand can capture different age groups. growing industry equity, large resources 3. Changing social trends (Fast Food) S4, O5, O3 4. Demand of Pepsi is more than of By having good distribution channel co. Can Competitor focus easily fast food restaurants, clubs. 5. May tie up or liaison with major . showrooms, computer centers restaurant 6. Internet promotion ordering processes THREATS S T STRATEGIES W T STRATEGIES 1. Non-carbonated substitutes (The S4, S5, T1, T3 W1, T3 Mango Season) Because company has financial recourses and By improving the taste quality company 2. Fake products (Imitators) distribution channel therefore it can producecan reposition its products can take long 3. Beverage industry is mature non-carbonated drinks. confines position on maturity stage. 4. Strong competition with Coca- Cola compan y . Strategic Position and Action Evaluation (SPACE) Matrix o Competitive Advantage ? Brand recognition- 3. 00 ? Large market share- 2. 00 -11. 00 = 2. 75 ? unspecific distribution channel- 1. 00 4 ? Customer loyalty- 5. 00 11. 00 o Financial Strength ? Inventory turnover+ 7. 00 ? Return on asset+ 2. 00 + 12. 00 = + 4. 00 ? Net income+ 3. 00 3 + 12. 00 o Industrial Strength ? High industry growth rate+ 6. 00 ? Profit potential+ 4. 00 +15. 00= +3. 75 ? Financial stability+ 3. 00 4 ? Resource utilization+ 2. 00 + 15. 00 o environmental Stability ? Economic stability- 2. 00 ? Barrier to entry- 1. 00- 7. 00 = 2. 33?Competitive pressure- 4. 00 3 7. 00 Coordinate x ( CA + IS )= 2. 75 + ( + 3. 75) = + 1. 00 Coordinate y ( FS + ES ) = 2. 33 + ( + 4. 00) = + 1. 67 Strong Average Weak 4. 0 3. 0 2. 0 1. 0 The EFE Total Weighted Score High i ii iii 3. 0 Medium iv v vi 2. 0 Low vii viii ix 1. 0 IFE Score = 2. 82 EFE Score = 2. 90 ** At the v place = Hold Maintain Grand Strategy Matrix RAPID MARKET GROWTH WEAK COMPETITIVE quarter-circle II Quadrant I STRONG COMPETITIVE.POSITION market exploitation POSITION market penetration product development backward integration forward integration horizontal integration related diversification Quadrant cardinal Quadrant IV SLOW MARKET GROWTH Quantitative Strategic Planning Matrix (QSPM) as appropriate STRATEGIC ALTERNATIVES KEY FACTORS WEIGHT Non Carbonated product Tie up with Resturants, Clubs, Showrooms STRENGTHS AS TAS AS TAS Strong multinational (brand equity) 0. 11 3 0. 33 2 0. 22 Strong vast distribution channels 0. 10 2 0. 20 3 0. 30 Lack of capital constraints 0.07 4 0. 28 1 0. 07.Record market share 0. 10 1 0. 10 3 0. 30 Strong brand portfolio 0. 05 2 0. 10 3 0. 15 Aggressiveness in the market (market leader) 0. 06 3 0. 18 4 0. 24 Brand promotion 0. 13 2 0. 26 4 0. 52 WEAKNESS Targeting only young customers 0. 10 3 0. 30 2 0 . 20 Political franchises 0. 07 - - - - Centralized decision making 0. 05 - - - - Decline in taste 0. 08 3 0. 64 2 0. 16 Motivational factor 0. 05 1 0. 05 2 0. 10 Not all products bear the company name 0. 03 1 0. 03 3 0. 09 1. 00 . OPPORTUNITY New products can easily penetrate in the market 0. 10 4 0. 40 1 0. 10 Noncarbonated drinks are the fastest-growing industry 0. 12 4 0. 48 3 0. 36 Demand of pepsi is more than of competitor 0. 07 2 0. 14 4 0. 28 Changing social trends (fast foods) 0. 09 2 0. 18 4 0. 36 Internet promotion and ordering processes 0. 05 2 0. 10 3 0. 15 Tie up or liaison with major showrooms restaurant 0. 06 1 0. 06 3 0. 18 THREATS Non-carbonated substitutes (the mango season) 0. 15 4 0. 60 2 0. 30 Baverage industry is mature 0. 11 3 0. 33 2 0.22 Fake products (imitators) 0. 09 1 0. 09 2 0. 18 Competitors schemes 0. 04 1 0. 16 3 0. 12 Strong competition with Coca-Cola company 0. 12 2 0. 24 3 0. 36 1. 00 5. 25 4. 96 8. Pro vide two recommendations for the organization i. e. , strategies. Support your recommendations. Out of the many strategic alternatives that PepsiCo could call for to follow, we have chosen to endorse one that fosters continued growth and diversification. Although their over-diversified portfolio has hindered their International Growth, these strategies strengthen their overall embodied worth and market presence domestically. As consultants for PepsiCo, we are making the following recommendations 1. Pepsi should focus on increasing sales globally to compete effectively with Coke. They have been beaten badly in some markets, and need to focus more on un-tapped areas. 2. Continue to diversify their beverage selection through acquisitions. This will alter PepsiCo to combat the decreased interest in cola. Going along with this, PepsiCo needs to ensure that they can right manage all of these acquired companies and should divest those that show limited potential.