PepsiCo’s impressive position in the global food & beverage industry is secured due to its internal strengths and resilience against adverse factors. The company keeps on growing and expanding despite the increasing market saturation. This analysis highlights the strengths as well as weaknesses that act as an external strategic factor. In the same way, opportunities and threats influencing external strategic factors are also covered in detail. The company can use these strengths to exploit opportunities and thus address weaknesses and threats to ensure continued growth. Therefore, the company must address hurdles in the way PepsiCo’s growth.
PepsiCo’s SWOT analysis reveals the primary issues due to several factors. The most prevalent of them are fluctuating consumer behaviors, product development, and increasing competition.
PepsiCo’s Strengths
The company has been growing continually for many decades. The prominent reason for this growth is the company’s strengths. This section of the analysis reveals the strengths that enabled the company to secure continued growth. The following given strengths are significant in this aspect:
- Strong brand reputation
- Extensive product mix
- Extensive distribution and production network worldwide
The company has secured a top value brand for customers around the globe. It enables the company to capture buyers and increase its revenue. Moreover, PepsiCo has another advantage of extensive product mix, which allows the company to penetrate different markets such as Quaker products, Frito-Lay products, and Pepsi products. Even more, the company has another advantage vast distribution and production networks. These networks enable the company to expand its operations in international markets, thus expanding the firm’s business. Therefore, this section of the analysis reveals the strengths that enable the company to secure global growth.
PepsiCo’s Weaknesses
The company is prone to many weaknesses that are affecting the internal business environment. These internally prevalent strategic factors acts are barriers to the company’s growth and expansionism. The subsequently given factors are the main weaknesses of PepsiCo.
- Restricted Penetration outside the US
- Weak portfolios of business
- Enfeebled image in front of health-conscious customers
The company has successfully penetrated the markets of the American continent of the South and North regions. These markets earn the company a revenue of more than 70%. Therefore, it reveals that the company has not fully explored the markets outside the Americas. Moreover, the company has a business portfolio in food and beverages and does not exploit other industries. In the same way, the company has another weakness when it fails to optimize its image in front of health-conscious customers. Therefore, this segment of SWOT analysis exposed the weaknesses of PepsiCo.
Opportunities for the company
The company has opportunities in its external business environment. This aspect of the analysis reveals the opportunities in the way of PepsiCo. The following factors provide the opportunities which can be exploited by the company for growth and expansion:
- Business diversification
- Penetration in developing nations
- New alliances with related business industries
The company has many opportunities to diversify the scope of business even outside of the food & beverages industry. Moreover, the company can increase its operations and business by entering the markets outside the Americas. These developing states have opportunities as they have bigger markets. Furthermore, PepsiCo can undergo new alliances with the related companies to diversify its products. In this way, PepsiCo can grow and expand in terms of business operations and revenue by exploiting these opportunities, as shown in this SWOT analysis.
Threats faced by PepsiCo
This business industry is prone to many threats that can undermine its growth and expansion. The prevalent external factors that can harm business operations in the long term are shown in this analysis. The most significant threats that the company must address to continue business growth are given as follows:
- Aggressive competition
- Healthy Lifestyle ethos
- Environmentalism
PepsiCo is facing intensive competitional rivalry in the market. The aggressive competition is posed by Coca-Cola, which has shrunk the company’s growth in many regions. Moreover, the healthy lifestyle ethos beginning at this age contributes significantly to affecting the market growth. People are more conscious about their health than the taste of the product. Additionally, environmentalism further contributes to this threat as there are growing regulations on the recycling of waste products. Therefore, the company must undergo a wise policy to mitigate these threats.
Recommendation
PepsiCo has many threats that can contribute to the successful mitigation of the threats, as shown by this analysis. The company needs the following actions to improve global expansion and address the intense competition:
- Diversification of business to ameliorate market risks
- Penetration in growing markets can ensure expansion
- Improving the health aspect of its products
- Ability to recycle waste products to enact a socially responsible image
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