Redhawks Consulting
Pepsi’s Vietnam Challenge
“It’s important to remember that results count. If you can’t
get the results over the goal line, are you really a leader?”
-Steven Reinemund, Chairman & CEO of Pepsi
Overview
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Key Concern
SWOT Analysis
Identification of Alternatives
Key Success Factors
Recommendation
Phases of Implementation
Timeline
Summary
Key Concern
• To advise the executives of Pepsi in
Vietnam on the future strategic direction
of the company.
SWOT Analysis
Strengths
Weaknesses
 Brand recognition
 Lack of health benefits
 Market leader and producer of soft drinks
 Low consumption of soft drinks in Vietnam
 Initial market entry
 200 product variations per year
 Cover all regions of Vietnam
 Size of company prevents government funding
 Snack food industry
 Improvement of distribution channels
 Offer environmentally friendly products
 Product development
Opportunities
Threats
 Soft drinks popular for special occasions
 Traveling between provinces
 1994 trade embargo
 Coca-Cola
 Increased consumption in rural areas
 Domestic products
 Technological advancements
 Consumer prefer healthy food items
 Increased brand exposure in fast food restaurants
 Refrigeration systems
 Expansion creates jobs for Vietnamese
Identification of Alternatives
1.
2.
3.
4.
5.
Refrigeration System and Sanitation
Snack Food Industry
Youth Market Segmentation
Exportation to Cambodia
Maintain Current Position
Alternative 1:
Refrigeration System and Sanitation
• Advantages
– Health and well-being of consumer
– Provide additional service
– Easier to serve items
• Disadvantages
– Installation costs
– Maintenance costs
Alternative 2:
Snack Food Industry
• Advantages
– Early in product life cycle
– Build upon Pepsi Brand
• Disadvantages
– Research cost
– Higher than average risk of failure
Alternative 3:
Youth Market Segmentation
• Advantages
– Half of population under age of 25
– Technological advancements increase
– Nostalgia and brand recognition
• Disadvantages
– Vast market: 46 million people
– Diversity
– Rural regions
Alternative 4:
Exportation to Cambodia
• Advantages
– 14 million people (Median age of 22)
– Annual Growth: 6.4%
– Build upon current distribution channel
• Disadvantages
– Very costly
• Promotional
• Infrastructure
– Language Barrier
Alternative 5:
Maintain Current Position
• Advantages
– Low cost
– Customer loyalty
– Maintain short-term market share
• Disadvantages
– No expected growth
– May lead to relative depletion of long-term
market share
Key Success Factors
Sanitation
Snack
Foods
Youth Cambodia Same
Market
Production Efficiency
1
1
1
2
2
Supply Chain
Management
2
3
2
2
2
Brand Image
3
3
3
2
2
Return of Investment
1
3
2
1
1
Total:
7
10
9
7
7
Recommendation
• Alternative 2:
Snack Food Industry
Phases of Implementation
I. Establish Implementation Team
II. Market Research
III. Product Development
IV. Infrastructure and Organizational Development
V. Integrated Marketing and Communications
VI. Milestone Review
VII. Expansion
VIII.Long-term Planning
Phase I:
Establish Implementation Team
• Time frame: Immediately upon approval
• Parties involved:
– Vietnam Pepsi
• Soft drinks
• Snack food
– Cultural specialist (anthropologist)
– Pepsi Co. of North America
– Research professionals
Phase II:
Market Research
• Time Frame: 0-3 Months
• Analyze the following:
– Market
– Distribution Networks
– Trends
– Demographics
– Psychographics
• Utilize focus groups
Phase III:
Product Development
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Time Frame: 3-9 months
Select which products to introduce
Product differentiation
Ex: Aloe Vera specialty drinks in Asia
Phase IV:
Infrastructure & Organizational Development
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Time Frame: 3-9 months
Distribution networks
Export and Import processes
Hire executives and management
– North, Central, and Southern regions
Phase V:
Integrated Marketing & Communications
• Time frame: 9 months – Ongoing
• Utilize current Pepsi marketing avenues:
– Television advertising
– Point of sale displays
– Promotional campaigns
• Market as “fast, on-the-go food”
• School incentive program
Phase VI:
Milestone Review
• Time frame: 12 months
• Establish review criteria
– Market share
– Sales (net profit)
• Re-evaluate every 3-6 months
Phase VII:
Expansion
• Time Frame: Upon 1st successful review
• Offer other products
– As directed by research
Phase VIII:
Long-Term Planning
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Time Frame: 10 years +
Cambodia
Horizontal integration
Sector and distribution network
Timeline
Months
Phase I: Establish
Implementation Team
Phase II: Market Research
Phase III: Product
Development
Phase IV: Infrastructure &
Organizational Development
Phase V: IMC Campaign
Phase VI: Milestone Review
Phase VII: Expansion
Phase VIII: Long-term
Planning
0
3
6
9
12
15
+
Redhawks Consulting
Pepsi’s Vietnam Challenge
“It’s important to remember that results count. If you can’t
get the results over the goal line, are you really a leader?”
-Steven Reinemund, Chairman & CEO of Pepsi