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Comprehensive SWOT Analysis Of Pepsi – Detail Explanation

Updated on: Sep 20, 2021
SWOT Analysis of Pepsi - Featured Image

About PepsiCo 

This SWOT analysis by PepsiCo shows us how the world’s second-largest food company is using its competitive edge to dominate the beverage and snack food industry.

Identify all major strengths, weaknesses, opportunities and threats affecting the company. It is a leading global food and beverage company with a complementary portfolio of exciting brands including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.

Many of their food and snack products hold significant leadership positions in the food and snack food industry in the United States and around the world. In 2017, PepsiCo and The Coca Cola Company accounted for approximately 23% and 20% of the beverage category in the U.S. According to retail metering channel estimates, respectively.

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SWOT Analysis of PEPSI

Strengths of PepsiCo :

  • Brand equity: 

It is one of the most famous and well-known global brands in the food and beverage industry. It is also known as the brand of youth. Has a high brand and reputation. It is worth $ 19.4 billion and is ranked 29th on the Forbes list of Most Valuable Brands.

  • Product portfolio performance: In 2015, they noticed a slight decrease withinside the sale of smooth drinks. India is evolving as a country and turning into greater health-conscious. This may be referred to from the 2015 evaluation of pinnacle-promoting brands (in India) that the top five drinks are the handiest juices and candy syrups. There isn’t any tender drink in the pinnacle five. Pepsi has products withinside the top five drinks bought in the country.

The top five drinks are in order:

BrandOwned byMarket Share
RealDabur8%
TangMondelez6%
SlicePepsiCo6%
RoohafzaHamdard6%
TropicanaPepsiCo6%

 

  • So, even if Pepsi is second to Coca-cola in terms of distribution of its Cola, there are other footprints that Pepsi has because of its product portfolio.
  • Strong Leadership: Under the management of Indra, Nooyi PepsiCo has been doing well. It has controlled to stay on the various function in the whole food and beverage region most effective in the back of Nestle in that field.
  • Customer Loyalty: PepsiCo has a very dependable consumer base. In its beverage category, all its soft drinks have an iconic flavour and that’s why their customers do not opt to shift brands. They have emerged as a totally robust brand in terms of the juices and bottled water category. Frito-Lay has been one of the top-promoting manufacturers around the globe with manufacturers beneath it which includes Doritos, Lay’s, Funyuns, Uncle Chips, Cheetos, Tostitos, and Walkers. They had controlled to grab 6 slots in the top 10 international snack brands with topping the charts (all three spots) as well.
  • Strong distribution: Pepsi has a global presence in more than 200 countries providing them with a very good distribution network.
  • Supply Chain: It has one of the exceptional supply chain networks in the world, making the goods available at some stage in the world. Apart from this they also have very efficient reverse logistics associated with it.

Weaknesses of Pepsi :

  • Competition: It has heavy opposition from Coca-Cola in its soft drinks category. They are constantly neck to neck with each other. This competition thereby offers room for not so loyal client base to exchange brands quickly.
  • Products perceived as unhealthy: Most of the soft drinks of PepsiCo are perceived as unhealthy.
  • Product Dependence: They are only present in the food and beverage industry, which can ultimately be harmful. They need to diversify into other product segments to become global leaders.
  • Failed Products: Many failed products such as ‘Crystal Pepsi’ hurt the brand image of PepsiCo and thereby giving room for the competitors to grow.
  • Brand Ambassadors: Wrong feedback or sick overall performance by well-known personalities/celebrities, in turn, may harm the brand image of PepsiCo as they’re the face of the organization. Over-dependence on celebrities for endorsements is a massive risk.
  • Value addition: Pepsi is thought to have commercials that can be focused in the direction of youngsters. However, it isn’t recognised to display Value advertising that’s a feature of Coca-cola. Coca-cola has, again and again, targeted the fantastic values of life, something which Pepsi can examine from them.

Opportunities of Pepsi :

  • Healthy Options: They should implement extra fitness-specific ingredients in their products and make the consumer aware of the same. Diet Pepsi is a superb move in that direction.
  • Diversification: Business diversification into exclusive marketplace segments is a massive opportunity. They have the talent, resources, and economic backing to do the same. This can also be carried out through acquisitions
  • CSR: They can do more CSR activities to tackle the negative remarks that hurt the brand image of the organization and benefit the local people.
  • R&D: Recently PepsiCo got here out with more healthy alternatives in soft drinks. To make 7Up through the usage of the synthetic sugar known as Stevia. This can become a game-changer. More such research needs to be done. Focus extra on the weight loss program drinks category. They have lately launched a variation in their cola sweetened with Stevia and sugar known as Pepsi Next.
  • Flavours: A brand that has risen strongly in the latest years is Paperboat. Paperboat is thought of for its numerous flavours which include watermelon, raw mango, etc. Bringing in such flavours even in carbonated beverage shape can help Pepsi attract a bigger market.

Threats of PepsiCo :

  • Competitors: PepsiCo’s main competitors are Coca-Cola, Kraft Foods, Nestle, Dr Peppers Snapple Group, and Mondelez.
  • Health Factor: An unhealthy item associated with their product can negatively affect health-conscious customers and they can lose them. This is evidenced by the decline in sales of soft drinks.
  • Economic Slowdown: With the recent reforms in the country PepsiCo might see a drop in its sales due to a cash crunch in the economy. Other factors such as recession and inflation may also impact the sales of the company.
  • Government Norms: Different norms of different countries might prove difficult to handle and compliance with it as well.
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Conclusion:

Pepsi is a world-famous beverage brand. In recent years, it has expanded its product portfolio and now includes healthy products in both the snack and beverage categories. In addition to investments in marketing and digitization, they have also started making profits, and the brand’s revenue continues to grow.

The higher net organic income in 2017 is the result of their investments and efforts in these areas over the past five years; however, a stronger dollar, regulatory and competitive pressures pose significant risks to brands.

To grow further, the brand can form new partnerships as well as acquire related small businesses. Investing in supply chain innovation and expanding retail chains can also help brands grow faster.`

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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