1. What is PepsiCos corporate strategy? Briefly identify the business strategies that
PepsiCo is using in each of its consumer business segments in 2008.
PepsiCos corporate strategy had diversified, in 2008, the company into salty and sweet
snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees,
purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals,
grain-based products, and breakfast condiments. Strategies that kept their brands at the top
were tied to new product innovation, close relationships with distribution allies,
international expansion, and strategic acquisitions. A new element of PepsiCos corporate
strategy was product reformulations to make snack foods and beverages less unhealthy.
Their belief that its efforts to develop good-for-you or better-for-you products would create
growth opportunities from the intersection of business and public interests. The company
was organized into four business divisions which all followed the corporations general
strategic approach. Frito-Lay North America manufactured, marketed, and distributed such
snack foods as Lay potato chips, Doritos tortilla chips, Cheetos cheese snacks, Fritos corn
chips, Quaker Chewy granola bars, Grandmas cookies, and Smartfood popcorn. The
PepsiCo Beverages North America beverage manufactured, marketed, and sold beverage
concentrates, fountain syrups, and finished goods under such brands as Pepsi, Gatorade,
Tropicana, Lipton, Dole, and SoBe. PepsiCo International manufactured, marketed, and
sold snacks and beverages in approximately 200 countries outside the United States.
Quaker Foods North America manufactured and marketed cereals, rice, pasta dishes, and
other food items that were sold in super markets.
2. What is your assessment of the long-term attractiveness of the industries represented in
PepsiCos business portfolio? What is your assessment of the competitive strength of
PepsiCos different business units? What does a 9-cell industry attractiveness/business
strength matrix displaying PepsiCos business units look like?
Now I will discuss my assessment of the long-term attractiveness of the industries
represented in PepsiCos business portfolio, starting off with Frito-Lay North America.
Three key trends that were shaping the industry were convenience, a growing awareness of
nutritional content of snack foods, and indulgent snacking. Many consumers want to
reward themselves with great-tasting flavors. Snacks are packaged in smaller portions so
they can address healthier eating. They are also using healthier oils in their products when
processing snacks. For example, they introduced Lays Classic potato chips cooked in
sunflower oil and retained Lays traditional flavor but contained 50 percent less saturated
fat.
In 2006, they also introduced Flat Earth fruit and vegetable snacks for the consumers with
