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PepsiCo Strategic Positioning

Uploaded by spootyhead on Apr 18, 2007

PepsiCo Strategic Positioning

Industry Analysis

PepsiCo, Inc. is in the Food and Beverage industry. The U.S. food and beverage industry sector (SIC 20) is the nation's largest manufacturing sector at $321 billion and it is mature and developed. Additional growth in the food and beverage industry likely to come from overseas market and factors that will affect industry growth are population growth, economic conditions, and foreign trade patterns. The top competitors within the industry are:

- PepsiCo

- Coca-Cola

- Cadbury Schweppes

- Kraft Foods

The U.S. population is expanding by less than 1 percent annually, and immigrants constitute about one-fourth of this increase. The population is continuing to age as the size of U.S. households shrinks. Current economic concerns cause spending restraint and prompt greater purchases of less costly private-label products and greater patronage of warehouse-club type operations.

The trend toward smaller households with increasing numbers of single-person and one-parent households is expected to continue. The combination of an aging population characterized by decreasing household size and greater numbers of single-person and one-parent households indicate that total spending for food and beverages is likely to increase very slowly. More women work outside the home and a higher number of single-person households cause redistribution of the food and beverage dollar away from home and towards other outlays at the expense of the retail grocery industry where potential profits are higher.

In order to combat the aforementioned trends, food and beverage processors will be pressured to provide products tailored to older and single-person households to minimize the natural appeal of away-from-home eateries. As mentioned in the first paragraph, domestic market growth will be limited, thus manufacturers will likely compete very aggressively for market share and intensify export efforts to increase sales and enjoy high profits.

Although there are lots of challenges, the food and beverage industry is very attractive industry due to following reason:

The size of the industry is about $321 billion. If played smart, it could be very profitable for the companies involved. The industry is Global and opportunities exist throughout the world. There will always be demand for food and beverages. Innovation and other alternatives (i.e., non-carbonated drinks, healthy alternatives).

Company Background

PepsiCo, Inc., incorporated in 1919, is a world leader in convenient foods and beverages, with revenues of about $27 billion and about 143,000 employees. The company consists...

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Uploaded by:   spootyhead

Date:   04/18/2007

Category:   Company Profiles

Length:   13 pages (2,950 words)

Views:   7214

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