PepsiCo SWOT Analysis
“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and
the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely
used technique through which managers create a quick overview of a company’s
strategic situation. The technique is based on the assumption that an effective strategy
derives from a sound “fit” between a firm’s internal resources (strengths and
weaknesses) and its external situation (opportunities and threats). A good fit maximizes
a firm’s strengths and opportunities and minimizes its weaknesses and threats.
Accurately applied, this simple assumption has powerful implications for the design of a
successful strategy.”
PepsiCo
PepsiCo is one of the largest food and beverage companies in the world.
The company manufactures, markets, and sells a range of salty, convenient,
sweet and grain-based snacks, and carbonated and non-carbonated beverages.
The company holds 38% market share of the total US savory snacks market and
a 25% market share of the US liquid refreshment beverage market. The
company figures at the 58th position in the Fortune 500 ranking for 2008. Strong
market position allows the company to launch new products and also increases
its bargaining power in the market. However, the high transportation cost
resulting from the higher oil prices has increased PepsiCo’s shipping and
handling cost from $4.1 billion in 2005 to $5.1 billion in 2007. Given the intense
competition in the market, the company may not be able to pass on increases in
operating costs to its customers. High oil prices would adversely affect the
margins of the company.
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PepsiCo SWOT Analysis
Strengths, Weaknesses, Opportunities and Threats (SWOT)
Location of Factor
TYPE OF FACTOR
Favorable
Internal
Strengths
Unfavorable
Weaknesses
¾ Strong market position
¾ Strong brand portfolio
¾ Business
concentration
¾ Strong growth in
revenues and profits
External
Opportunities
¾ Acquisitions and
alliances
¾ Growing bottled water
market
¾ Growing Hispanic
population in US
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Threats
¾ Sluggish growth of
carbonated
beverages
¾ Intense competition
¾ High oil prices