Products And Services Offered By Pepsico Commerce Essay

Products And Services Offered By Pepsico Commerce EssayPepsiCo is ace of the close successful drink subject and snack solid food stemma in the world. PepsiCo scrawled on 1965, during that time Pepsi-Colas CEO and President Donald M, Kendall(a) approached Herman Lay, Frito-Lays Chairman and CEO with a pro locating of merging the two political party in providing food and drunkenness with complementary carrefours that would give a slighter opportunity for cost sharing, voice merchandising and knowledge and skill transfer (MightyStudents, 2010). PepsiCo brands argon available in nearly 200 countries and territories. Its expertise is to create contrasting food and potable mathematical results that would soothe the taste of its consumer.PepsiCo is a world leader in commodious foods and drinks, with r so farues of about $57 billion and over 294,000 employees (JobsGlobal Online, 2011).The reinvention of protestent products, the introduction of sweet product, expansion into ball-shaped marts and clever advertising campaigns be the primary focal point of PepsiCo Inc. PepsiCos considerable market placeing expertise could be leveraged in the merchandise of fry chicken, pizza, and Mexi arse fast foods.The familys current operating locations, headquarters and current sign public offering stock market.Pepsi-Cola North the States, headquartered in Purchase, New York, is the diversion deglutition unit of PepsiCo Beverages and Foods North America, a division of PepsiCo, Inc. PepsiCo Beverages and Foods North America equivalentwise comprises PepsiCos Tropicana, Gatorade and Quaker Foods businesses in the linked States and Canada.Brand Pepsi and separate Pepsi-Cola products notice for nearly one-third of total bonkers drink gross sales in the United States, a consumer market totaling about $57 billion. Outside the United States, Pepsi-Cola swallows argon available in about 160 countries. Today Pepsi-Cola products identify for about a quar ter of all cushiony drinks sold internationally (Global Finance, 2011).. The confederacy has too established surgical butt ons in the emerging markets of the Czechoslovakian Republic, Hungary, Poland, Slovakia, India and Russia, where Pepsi-Cola was the starting U.S. consumer product to be marketed. Pepsi-Cola pass ons advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. This includes close to of the worlds best and most recognized advertising. New advertising and exciting promotions codetain Pepsi-Cola brands young.Performance and securementsPepsiCo current performance and achievement is brinytain to a greater extent than 12 billion liters of water through efficiency amelioratements indoors PepsiCo trading trading operations as comp atomic get along 18d to the 2009 baseline. Achieved a 16 percent reduction in per unit go for of energy in beverage plants and a 7 percent reduction in snack plants in 2010 compared to a 2009 baseline. Introduced the first fully compostable Sun Chips bag, which is do with 100 percent re impertinentable plant-establish materials. increase the percentage of executive positions held by women globally to 30 percent. Reduced virginal fat by to a greater extent(prenominal) than 50 percent in U.S. Lays and Ruffles potato chips. PepsiCos success is the import of superior products, superior standards of performance, distinctive competitive strategies and the gamy integrity.The Macro- milieu analysis of PepsiCo Company.Political FactorsThe production dissemination and aim of umpteen of PepsiCo product are keep down to various federal laws, more(prenominal) as the Food, medicine and Cosmetic Act, the Occupational Safety and wellness Act ad the Americans with Disabilities. The governing plays a role within the operation of manufacturing these products in destinations of regulations. at that place are potential fines set by the government on companies if th ey do not meet a standard of laws. The businesses are as well as dependant to state, local and foreign laws. The international businesses are subject to the Government stableness in the countries where PepsiCo is trying get into underdeveloped markets. The businesses are also subject to de taxation policy in each country they are operating. They also wee to comply with federal, state, local and foreign environmental laws and regulations.In policy-making stableness, whenever the Government Is Considered to Be Stable, the business get out grow. If there is political stability in the country the policies and strategies made by Pepsi can be coherent to be implemented. Foreign companies are also keen to invest in those countries which are politically stable where they make believe no fear of set in their market helping or shut down repayable to sudden change of government.In blended economy government and undercover sector twain plays their role in developing the economy of the country. investiture by foreign companies like Pepsi is more likely to flourish in mixed economy.Economic FactorsThe key elements taken into consideration are the principal market risks, which PepsiCo is exposed to inflation rate, pursuit rate, and foreign exchange rate. These are specified asThe major economic issue facing PepsiCo and its subdivisions is the lift input cost oftheir businesses due(p) to structural inflation. Agricultural, energy, and some metal industries are going through periods of steady inflation. Because PepsiCo relies on these industries, inflation costs essential be factored into their cost equations. In inflation rate, if the country faces inflationary elan in the market, the price of the Pepsi will ultimately increase which will dismantle its demand.Interest rate on PepsiCos debt as well as it short- destination investment portfolio PepsiCo can manage its overall pay strategies in term of balancing investment opportunities and risks. The unio n is use interest rate and coin swaps to effectively modify the interest rate in order to snub the overall borrowing costsForeign exchange rate and other international economic conditions, operating in international markets involve mental picture to movements in currency exchange rates, which typically affect the economic gain, inflation, interest rate, government actions and other factors. Once these changes occur, they will cause PepsiCo to ad fitting its financing and operating strategies. Changes in currency exchange rates that would have the prodigiousst strike on translating PepsiCos international operating profit include Mexican peso, British pound, Canadian dollar and Brazilian real.Social cultural FactorsConsumers today are not as much(prenominal) joyous to sess products as they were before. season and ethnicity are two main characteristics that affect consumer preference for quiet drinks and utility(a) beverages. With age, health concerns become more of a facto r when choosing a beverage. To illustrate, some studies show that cola products or softening drink in habitual may cause kidney stones and other related diseases. In contrast to senior consumers, younger consumers pointly teens and those in their twenties have less upkeep spans for products and are more likely to prefer products that seems to be fun and distinct .Age and ethnicity are two main characteristics that affect consumer preference for soft drinks and alternative beverages. With age, health concerns become more of a factor when choosing a beverage (PepsiCo, 2006). The requirements of different age themes are different. PepsiCo should betoken that age group that consumes it the most and make promotional strategies accord to their behavior. So their main target is the young generation.The loving environment within food services markets are changing evidentiaryly. A modernistic demand for anicteric food and beverages twin with a push to fightds green operations a nd environmentally-friendly company management has changed the social playing field within most markets. With this in mind, PepsiCo have successfully adopted fresh goals and produced peeled products in order to meet this more health-conscious market.PepsiCo and moreover Pepsi is subject to the lifestyle changes, because of it bases her advertising campaigns in a concrete kind of people with an special lifestyle, it is for that PepsiCo has to pay a special care on the lifestyle changes. Particularly in the United States Pepsi drinkers are much defined, there is a kind of people who drinks Pepsi another kind who drinks Coca-Cola it is for that they have to pay attention to the social mobility for not losing a possible market.technical FactorsPepsiCo and its subdivisions utilize technology in order to sustain company growth, keep up with the demands of its sustained growth, and perform efficiently. PepsiCos deli actually systems provide a smashed competitive advantage. In particular, their most tycoonful distribution system, Direct store-deli genuinely (DSD) allows them to bring home the bacon all of their retailers and customer-distributors with up-to-date stock. Direct store-delivery allows us to create maximum spell and visibility for our brands and support in-store promotions. DSD works well for popular products we restock very much, because it allows us to propagate new products quickly. Our DSD system reaches hundreds of thousands of retail outlets this way, from neighborhood convenience stores to large-format supermarkets (Annual Report, 11). through research and development quality of the product can be meliorate or better techniques or machinery can be developed which can increase the production. When technology is advance the supply of the product increase consequently the company experiences growth in their business.Some factors that cause companys actual results to differ materially from the expected results are as follows The effectiveness o f companys advertising, marketing and promotional programs. The new technology of internet and television which use special effectuate for advertising through media by make some products look attractive. This serve wells in selling of the products. This advertising makes the product attractive. This technology is being used in media to sell their products. Introduction of cans and plastic bottles have change magnitude sales for PepsiCo as these are easier to carry and you can bin them once they are used. As the technology is getting advanced there has been introduction of new machineries all the time. Due to introduction of this machineries the production of the PepsiCo company has increased tremendously therefore it was few years ago.Legal FactorsIn elements with changes to legislation, Waste Management and frequent Concerns of growing environmental cognizance are leading to increasing legislation. The companys operation is affected by federal legislative proposals that make senseress the four objectives. First, belittle the quantity of promotion material get into the nations solid waste system. Second, slander the consumption of scarce natural resources. Third, maximize the recycling and reuse of packaging materials. Fourth, Protect human health and the natural environment from adverse set up associated with the disposal of packaging materials.Laws Formulation in order Government has devoted copy rights to PepsiCo by Pepsi product, so that another company cannot sell their product by the name of Pepsi. The countries where laws are formulated, the strategies and activities of the company are different.This is one of the most valuable factors that a company needs to consider while starting, establishing and expanding operations in any country. Legal Environment is of the essence(predicate) because a company needs to confirm to the laws of the land and carry out its operations accordingly. period political environment is important as it can play an important informing opinions regarding the company. This is the reason why PepsiCo operates in India in collaboration, initially it started its operations in India with Punjab Government and then(prenominal) it started its operations in the carbonated and non-carbonated beverage segment n collaboration with RKJ group in India.Environment FactorsThis plays an important role in determining the acceptability of the product according to the environment norms of the market and the effect the company has on each of these. In the field of study of Environment, PepsiCo Foundation seeks programs that protect water sources and create better use for active water, in order to admirer minimize the growing water crisis that is confront by millions of people around the globe.In social responsibleness, PepsiCo social responsibility is to provide its customers with clean and hygienic product so to do this they have increased the use of disposable bottles. Companies need to be very wakeful about this issue as people are very nice about their culture and may not tolerate any infringement. This determines the ingredients of the products and the cause advertisement and promotions used by the company.The international considerationsWhere do they operate?PepsiCo entered India in 1989 and has grown to become the countrys largest selling food and Beverage Company. unrivalled of the largest transnational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India (PepsiCo India, 2011).The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned. In addition to this, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos load to backing by this vision every day is visible in its part to the co untry, consumers and farmers (PepsiCo India, 2011).What is/are their internationalisation method(s)?In order to enter the market scene, PepsiCo has been able to use sum venture. Joint venture is the term used when a business company merged to other company for the purpose of entering the international market. This is an alternative expressive style of exploiting a particular asset such as retail and potential branch network to form an sight with an established supplier of the product.PepsiCo gained gate to India in 1989 by creating a say venture with the Punjab government-ownedPunjab Agro Industrial Corporation(PAIC) andVoltas India Limited. This joint venture marketed and sold Pepsiuntil 1991, when the use of foreign brands was allowed PepsiCo bought out its partners and ended the joint venture in 1994.With the joint venture method used by the company to enter an international market, PepsiCo has been able to be known in the international market. Hence, it can be said that the method used by the company as a mode of foreign market entry is effective and appropriate to achieve the goal of the company of having a strong competitive position in the international market. The company has used suitable market entry mode to cover that their products will be delivered to international market.Discuss the problems faced by the company in international business and propose solution to govern the issues.ProblemsInitially, the India market was highly fragmented, and the wholesale and distributional systems were outdated. This was further complicated because PepsiCo was the rattlingexisting wholesaler of concentrate, and did not have devil to the operation of the bottling plants. To add to this problem, the companys local market agents were fully responsible for production and distribution during the initial stages of market entry.The India government exerted tight control over the development of the soft drink perseverance and was careful to nurture house serv ant brands. PepsiCo was not permitted to enter into a Joint Venture bottling business with its local partners until 1992, and even then it was restricted to a minority stake.Pepsi is also facing the problem concerning environmental issues like the supply of raw materials to produce their products. If Pepsi fails to help in environmental issues, the situation it had been during World War might happen againwhen they or so went out of business because of the shortage of sugar.SolutionTo overcome the above problem, PepsiCo internalized market transactions through a strategy of long-term investment and, with the approbation of the government was able to co-ordinate this with an increased control of production and domestic distribution. In the highly competitive market share operate business of carbonated soft drinks, to assume control of production and distribution is strategically essential. This meant that the acquisition of majority stakes in the bottling plants is almost a demand for gaining the control over management.Pepsi also has to deal with such environmental issues like the supply of raw materials to produce their products. If the environment will provide them a good raw material they might have a more profit.PepsiCos dedication and commitment to the environment is stated in their Worldwide code of Conduct. TheWorldwide Code of Conductdefines PepsiCos commitment based on the following(a) environmental principles.Developing programs that promote clean air and water, energy conservation, and press land fill waste. By supporting programs that educate, train and motivate employees to help the environment. Business is conducted by complying with all applicable laws and regulations and provides a safe and hale environment. Minimizing the violation of our businesses on the environment through methods that are socially responsible, scientifically based and economically sounds, such as recycling and conservation. By cooperating with different organizatio ns and governments to palpate solutions to reduce pollution and by supporting environmental policies.In order to make this foreign operational mode combination a success, PepsiCo should consider the most suitable and effective expansion strategy. It can be said that the spread of PepsiCo is truly global. The company has hundreds of brands, which can be frame in almost 200 countries and territories around the world. Market concentration is the result of interaction between the market size and a few bouncy factors. It is said that the industry of Carbonated Soft Drinks (CSD) is highly concentrated. There are lead major industries that compete in this business (PepsiCo and Coca-Cola).This shows that PepsiCo have a high market concentration. In this manner, the international market entry of PepsiCo is a good expansion strategy so as to maintain its position in the global market. In order to ensure that the market entry combination strategy used by the company will succeed, the compan y must be avail to consider the aspects of control and monitor. In this manner, the company must have a monitoring team that will ensure the profitability and growth of the company as the expansion strategy has been initiated. The monitoring team will be responsible for identifying the possible risks that the company will encounter upon the initiation of the expansion strategy through foreign market entry mode. In addition, this team will also be accountable for determining the cost that will be needed to implement that new strategy.Product competitive analysisSWOT (Strengths, Weaknesses, Opportunities and flagellums) analysis of the companys products.StrengthsBrandingOne of PepsiCos top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it ranked 26th amongst top 100 global brands. Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as victuals Pep si.DiversificationPepsiCos diversification is obvious in that the fact that each of its top 18 brands generates annual sales of over $1,000 million. PepsiCos arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as eat cereals, cakes and cake mixes. This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from sackfuling business climates. disseminationThe Company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.WeaknessesSecond Mover Disadvantage sustenance Pepsi Cola does have the first mover advantage which regimen bump has and this may prove to be a major short feeler also in the US Market no Extensive efforts have been made to popularize it. By brand, on a comparative scale Diet Coke proves to have a better brand image in customers mind than. This compels to incur extra expenditure in Advertising, Promotions and Sponsorship.CompetitorThe main competitor of the company is the Coca Cola. At the international level, Pepsi has a very strong ambition with Coke. Coke has started its advertisements more effectively to increase their demand and it is a very strong curse for Pepsi.ExpenditureRight from the very beginning Pepsi has hired the biggest and the most expensive stars in the country as its brand ambassadors and has spend heavily on advertising which has affected its difference sheetOpportunitiesLowest Per Capita ConsumptionEven after almost decades of comportment in the market, there are growth opportunities for Pepsi in US as here the per capita consumption of carbonated beverages is one of the lowest in the world. Health Based apart from its Juice Based drinks portfolio Pepsi can use the decoct Diet can to the maximum by promoting it as a health drink at cheaper prices.Healthy foods supportiveThe increasing concern for healthy foods supportive of diet and wellness will open a new door of opportunity for PepsiCo. The acquisition of Aquafina, Tropicana and Quaker Oats is already a significant positive step towards the consideration of a healthier food and beverage alternative. The awareness does not limit itself to these products and in fact, as if in a synergistic dedication,. PepsiCo is also committed towards the healthy lifestyle of children through train programs. As PepsiCo caters to snack foods that are high in fat, PepsiCo must lapse to challenge itself in the provision of healthy foods in the light of a deteriorating contemporary times. The spotlight on healthier foods would hopefully cut the costs of the ever-inflating cooking oil prices as focus is made on high protein snacks.New markets expansionNew markets are similarly opening up in the world, open for further expansion. Most apparent is the opening of the Ch inese market. Taking in mind the large population of this country, Pepsi must find measures to quickly penetrate, expand to China and beating the competition that will swipe from there. They must appeal to the tastes, culture and locale of their new Asian markets using a local feel to their products which can be manageable in their strong advertising campaign. Pepsi continuing diversity will provide the much needed back-up for the company and allow it to rely on other companies and businesses than just a sole occasionful brand.ThreatsHealthGrowing health awareness among people and some of ill effects of carbonated beverages have chased many people to switch over to non-carbonated beverages that can seriously handicap the long-term prospects of the entire Industry and Pepsi.EnvironmentEnvironmental concerns are often raised because of the massive amount of water extracted by the bottling plants resulting in the dope off in groundwater level which affects the local population adve rselyIntense contenderThe Coca-Cola Company is PepsiCos primary competitors. But others include Nestl, and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Recently Coca-Cola passed PepsiCo in Juice sales.Suggest solutions to think the position of the weaknesses and threat of the product line.The solutions to bump the position of the weaknesses and threat of the product line is Pepsi should also introduce a version of Diet Pepsi Cola as a sports drink scat this is a completely new and untapped market which will help in providing the impetus for Diet Pepsi. Pepsi should start more strong-growing marketing of its Diet Pepsi range of products as they have very good growth and future prospects while there is not much growth in the carbonated beverages sector.Next solution is the Pepsi is at its maturity stage and the sales of company are not growing very rapidly. Company is doing a lot of promotional activities to let the product remain in the market. It holds a large share of the market and whenever the sales state declining, the Pepsi can improve it by different promotional activities.Marketers of Pepsi can try to improve sales by improving one or more marketing mix elements. They can cut prices to attract new users and competitors customers. They can also put a better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Pepsi is at its maturity stage.The next solutions to recover the position of the weaknesses and threat of the product line is for Pepsi is to move forward with commitment to provide industry leadership in the health and wellness arena. Pepsi should do a better job of staying in touch with shoppers and consumers and in the process of innovating and creating value. This is absolutely essential for value creation in the beverage industry. I think the most important driver behind the demand for beverage is population demographics.The final solu tion for Pepsi is to develop strategies to win the cola war in this cytosine. Winning the cola war in twenty-first century is critical for Pepsi to maintain its industry leadership position and to be a total beverage company.New VentureBarriers to entryNew entrants Pepsi to the Norway industry were very high human development (VHHD) are not a strong competitive pressure in the soft drink industry. Coca-Cola and PepsiCo dominate with their strong brand name and superior distribution channels. In addition, the soft-drink industry is fully saturated. New growth is small. This makes it very difficult for new, unknown entrants to start competing against the existing established firms. Another barrier to entry is the high bushel costs for warehouses, trucks, and labor and economies of scale in Norway country. New entrants cannot compete on price without economies of scale. These high capital requirements and market saturation make it super difficult for companies to enter the soft drin k industry therefore new entrants are not a strong competitive force.Pepsis product specialty caused by their marketing strategy has limited the threat of new entrants. also the heavy start up costs of manufacturing and packaging plants would be a deterrent. But, the biggest deterrent is brand image and reputation a new company would be very hard pressed to take market share away from established players like Pepsi, Coke etc. More importantly, the access to distribution channels is currently one of the biggest barriers to entry, and this barrier remains because both Coke and Pepsi maintain very strong relation with their channel partners.6.2 Threat of SubstitutesSubstitutes for Pepsi products in Norway with (VHHD) are bottled water, sports drinks, coffee, and tea. Bottled water and sports drinks are increasingly popular with the movement towards the health conscious consumer. There are a growing number and varieties of water and sports drinks that appeal to different consumers ta stes. These are advertised as healthier than soft drinks. In addition, coffee and tea are competitive substitutes because they provide caffeine. Soft drinks can be substituted with coffee. Specialty blend coffees are also becoming more popular with the increasing number of Starbucks stores that offer many different flavors to appeal to all consumer markets. Low switching costs for the consumer makes the threat of substitute products very strong (Datamonitor, 2006).6.3 The bargaining power of supplierThreats of Suppliers to in Norway (VHHD) are suppliers Pepsi are bottling equipment manufacturers and secondary packaging suppliers. Since Pepsi owns the majority of the bottler, it looks like that particular supplier does not hold much bargaining power. However, there has been increased concern about the simmering tensions between Pepsi and its increasing powerful self-sustaining bottlers such as PepsiCo. PepsiCo controls 80 percent of the US market as well as parts of Europe. Pepsi is introducing new product at a significant rate. The operational and distributional complexity due to new product introduction is affecting the bottom line of the bottlers. Some bottlers have even refused to carry new products.In terms of equipment manufacturers, the suppliers are generally providing the uniform products. The number of equipment suppliers is not in short supply, so it is fairly lenient for a company to switch suppliers. This takes away much of the suppliers bargaining power. However, climb sugar and packaging material prices have a direct impact on the profitability of the Pepsis products.6.4 The Bargaining power of BuyersThe bribeers power in new venture of Norway with Very High Human Development County, Pepsi and other soft drinks are mainly large grocers, discount stores, and restaurants. The soft drink companies distribute the beverages to these stores for resale to the consumer. The bargaining power of the buyers is very evident and strong. Large grocers and discount stores buy large volumes of the soft drinks, allowing them to buy at lower prices. Restaurants have less bargaining power because they do not order in large volume. However, with the number of people drinking less soft drink, the bargaining power of buyers could start increasing due to decreasing buyer demand. The interesting shift in buyer demand because of increased demand for healthy choices has driven the market share of substitute drinks. Consumers are focusing more on healthy choices and buying healthy drinks from high end specialty stores.This phenomenon is due to health and wellness trend sweeping across the global beverage market. Soft drink consumers are moving their consumption from regular cola carbonates to low-calorie carbonates, bottled water, sport drinks, juice and teas. Pepsi should adapt to this consumer behavior for future growth.6.5 Competitive controversyThe competitive pressure from rival sellers is the greatest competition that Pepsi faces in the s oft drink industry to enter to Norway. PepsiCo, Coca-Cola, and Cadbury Schweppes are the largest competitors in this industry with global presence. Though Pepsi owns four of the top five soft drink brands (Pepsi, Diet Pepsi, Mirinda, and 7 up), it had lower sales in 2006 than did Coca-Cola. However, PepsiCo has higher sales in the global market than Coca-Cola. In 2006, PepsiCo dominated North America with sales of $22 billion, whereas Pepsi only had about $7 billion, with more of their sales coming from overseas. PepsiCo is the main competitor for Coca-Cola and these two brands have been in a power struggle for more than a century.