Explain Internal environment (SWOT analysis) of pepsi-cola.

What elements dominate their internal environment -- those elements are classified as strengths and weaknesses.

Use pepsi-cola company (again, hopefully one we've heard of) and list/describe/discuss some strengths OR weaknesses of the firm. Do the company’s “strengths” pursue real challenging “opportunities,” i.e., are they risk-takers, or do they undertake the “lowest hanging fruit,” i.e., are they risk-averse. Give examples. Do they guard against “threats,” which could take advantage of their “weaknesses”? Again, in doing so, name some 1) strengths and 2) weaknesses of the firm, in light of “opportunities” and “threats.”

Answer:

PEPSI is an international player in the soft drink market and operation across the world. In 1893, Pepsi started its manufacturing in 1893. It got a new name as Pepsi-Cola on August 28, 1898. Then in 1961, it was ultimately named as Pepsi. Initially it was marketed as “Brad’s Drink”. The substitutes available in the same market are as follows:

1) Coca-Cola

2) Cola Turka

3) Big Cola

4) RC-Cola

In every segment of the target market, Pepsi-cola is highly favorable. Due to its wise spread use at homes, ceremonies and during travels, it has been chosen for this project.

Pepsi-Cola’s current position as the second biggest firm in the global food and beverage market is based on the company’s ability to wield its strengths to continue growing. The company grows despite an increasing level of market saturation. This SWOT analysis shows that Pepsi-Cola is positioned to grow and reach the top position in the global food and beverage industry. The SWOT analysis framework identifies the strengths and opportunities that the firm can tap to address its weaknesses and business threats. As a global company, Pepsi-Cola must address the issues shown in this SWOT analysis to minimize barriers to its global performance.

Internal environment (SWOT analysis) of pepsi-cola.

Pepsi-Cola’s SWOT analysis presents major challenges in the areas of competition, changing consumer behaviors, and product development.

Pepsi-Cola’s Strengths (Internal Strategic Factors)

PepsiCola’s continued global growth and prominence reflects the company’s strengths. This aspect of the SWOT analysis framework outlines internal strategic factors that enable firms to fulfill their business goals. The following are the most significant strengths of PepsiCola:

1. Strong brand image
2. Broad product mix
3. Extensive global production network
4. Extensive global distribution network

As a successful global company, PepsiCola has one of the strongest brands in the market. This strength enables the firm to attract consumers to its new products. In addition, the broad product mix represents PepsiCola’s increasing ability to reach various markets and segments, such as through Frito-Lay products, Quaker products, and Pepsi products. PepsiCola’s extensive global production and distribution networks are strengths that support the company’s international growth and expansion strategies. In this aspect of the SWOT analysis, PepsiCola’s strengths are sufficient to support its global growth strategy.

Pepsi-Cola’s Weaknesses (Internal Strategic Factors)

Pepsi-Cola suffers from a number of weaknesses that act as barriers to international growth. The internal strategic factors that limit organizational development are considered in this aspect of the SWOT analysis framework. The following are PepsiCola’s main weaknesses:

1. Low penetration outside the Americas
2. Limited business portfolio
3. Weak marketing to health-conscious consumers

Pepsi-Cola derives about 70% of its revenues from markets in North America and South America. This weakness indicates that the company has not yet maximized potential revenues outside the Americas. In addition, PepsiCola operates primarily in the food and beverage industry. This is a weakness because it maximizes the company’s vulnerability to risks in the food-and-beverage market. Also, PepsiCo fails to effectively market many of its products to health-conscious consumers. This aspect of the SWOT analysis highlights weaknesses that PepsiCola must address through changes in its growth strategy.

Opportunities for Pepsi-Cola (External Strategic Factors)

PepsiCola has opportunities for continued global growth. In this aspect of the SWOT analysis framework, external strategic factors that provide options for business improvement are identified. PepsiCola’s opportunities are as follows:

1. Business diversification
2. Market penetration in developing countries
3. Global alliances with complementary businesses

PepsiCola has the opportunity to diversify its businesses, such as by acquiring a complementary firm that is not in the food and beverage industry. Another opportunity is for PepsiCola to increase its penetration in developing countries to generate more revenues from markets outside the Americas. In addition, PepsiCola can create alliances with complementary business to increase its market presence. Based on this aspect of the SWOT analysis, PepsiCola has significant opportunities to strengthen its business resilience.

Threats Facing Pepsi-Cola (External Strategic Factors)

The food and beverage industry experiences a variety of threats. External strategic factors that could reduce business performance are considered in this aspect of the SWOT analysis framework. In PepsiCola’s case, the following are the most significant threats:

1. Aggressive competition
2. Healthy lifestyles trend
3. Environmentalism

Aggressive competition is a major threat against the company. The influence of the Coca-Cola Company is especially significant against Pepsi-Cola. In addition, the healthy lifestyles trend is a threat against Pepsi-Cola’s products, many of which are seen as unhealthful because of their sugar, salt, or fat content. Also, environmentalism threatens the company in how consumers negatively respond to product waste and lifecycle issues. This aspect of the SWOT analysis indicates that Pepsi-Cola must reform its strategies to overcome the threats to business.

Pepsi-Cola’s SWOT Analysis – Recommendations

Pepsi-Cola can use its strengths to effectively respond to the issues identified in this SWOT analysis, especially those considered as threats. The realistic actions that Pepsi-Cola could take to improve its competitiveness and international growth are as follows:

1. Diversify businesses to minimize market risk exposure
2. Further penetrate developing markets to grow revenues
3. Improve product healthfulness to attract more consumers
4. Enhance recycling efforts to address environmentalism