Strategic Management

Strategic Management
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Strategic Management
Pepsi Cola company alias Pepsi is one of the most successful managers the world has experienced in the soft drinks industry. The success of Pepsi as a multinational corporation has been achieved due to its precise strategies of operations in all divisions of the company. The strategies have ensured customer satisfaction, earned a competitive advantage, and created reliable structures that have enabled the company to achieve its annual targets. Besides, PepsiCo has dominated the industry and made successful business ventures and decisions through critical analysis of its strengths, weakness, opportunities, and threats. As a global player in the beverage industry, Pepsi has leveraged its strengths and opportunities to stay ahead of its competitors and specify its market niche. Similarly, the company has improved on its weaknesses and implemented measures to avert risks and threats.
Current Strategy and Use of Technology
Pepsi offers a wide array of products as an active player in the food industry. Being the second-largest player in the global beverage and food industry, PepsiCo bases its generic competitive strategy on the necessity to address market forces from its rivals such as the Coca-Cola company (Jallow, 2021). Pepsi’s intensive growth strategies have enabled the company to maintain its competitive advantage. According to Quan (2020), Pepsi’s intensive growth strategy is centered on the ability to respond to evolving global beverage and food market conditions. the intensive growth strategy matches the competitive advantage which has ensured the long-term growth of the firm. As one of the leading soft drink companies, Pepsi’s strategy is also centered on cost leadership and broad differentiation. As such, the company concentrates on cost minimization to improve its overall competitiveness and financial performance. For instance, Pepsi offers low prices as a result of low operating costs in addition to occasional special promotional offers that enhance discounted prices.
As a secondary generic competitive strategy, Pepsi corporation uses broad differentiation strategies. The generic strategy has enabled business competitive advantage through the attraction of consumers to unique features of the company’s products. For instance, lay’s tomato chips manufactured by PepsiCo are promoted as healthful snack products since they have a minimal saturated fat concentration. On the other hand, the company has strongly embraced technology to boost security, marketing, and production. Pepsi has successfully used data analytics and artificial intelligence (AI) to collect special intel about product categories and special flavors (Kotler et al., 2019). It is also through the AI system that the company’s research and development team has to glean various insights on consumer preferences that cannot be obtained via focus groups. With the generic strategies and use of technology, Pepsi has retained its competitiveness in the beverage industry.
SWOT Analysis

Pepsi SWOT matrix (Jallow, 2021).
PepsiCo has unique strengths that have made it a valuable brand across the world. Riding on a single umbrella for foods, snacks, and beverages, the company has maintained a high global ranking as a diversified business. However, its several brands under a single portfolio have improved diversification in both the beverage and food sector and have ensured huge annual profitability for the company from annual retail sales (Kotler et al., 2019). That has enabled Pepsi to meet and defeat its forecast while competitors struggle to attain their forecasts as a result of market uncertainties. Other strengths include strong global presence, direct store delivery, market dominance, and effective marketing strategy that entail sponsoring major sports with huge viewership. Weaknesses are overdependence on packaged food and carbonated drinks which has undermined the company’s agility and flexibility whenever there is turmoil in the segments. Some of its products are also perceived as unhealthy especially soft drinks and snacks due to high salt and sugar concentrate and added flavors or chemicals. With a poor environmental record, PepsiCo has been named among the leading plastic polluters. The weakness has been compounded by the failure to implement meaningful measures that increase the recycling or safe destruction of plastic products.
On the flip side, Pepsi has numerous opportunities to boost its performance and beat its targets. With over 22 brands under a portfolio concentrated within the beverage and food industry, the company has an opportunity for product diversification (Quan, 2020). During the digital era, the company also has an opportunity to expand its e-commerce and enlarge its market base. With the adoption of AI, the company has the potential of increasing consumer-driven research and development to ensure all its products are individualized to specific customer preferences. There is also the opportunity of introducing new flavors and increasing healthy options by reducing calories, sugar concentrates and added chemicals in their products. There exist threats too which include stiff competition from Coca-Cola, Unilever, and nestle, economic slowdown, adoption of effective technology by competitors, and increasing health consciousness.
BCG and Space Matrices
The BCG matrix determines a company’s growth rate and market share relative to competitors in the industry. Also known as the growth-share matrix, BCG Matrix has four different categories i.e., dogs, cash cows, question marks, and stars (Hunger, 2020). Products that fall under the dogs’ category have low market share or growth. For Pepsi company, such products are Pepsi max. Cash cows quadrant contains products with a high market share but a low growth market. This could be products like Frito Lays which has a 72.4% market share (PepsiCo., 2020). Stars quadrant has products with both high growth market and market shares such as Pepsi itself and mountain dew. Question mark quadrant is associated with products having high growth markets and low market share. This could entail Mirinda, 7 up, and diet Pepsi. The BCG matrix is essential for long-term planning and will influence Pepsi’s strategic decisions on where or when to develop products, invest or discontinue a product. There is also the space matrix that has enabled Pepsi to analyze its environment before formulating strategies. As such, the company can assess the most suitable strategy whether aggressive, conservative, defensive, or competitive depending on the business environment and organizational structure.

Pepsi Space Matrix (Quan, 2020).

Alternative Strategies
The company should first focus on the available opportunities and adopt modern digital technologies to compete favorably. The company should particularly apply porter’s five forces model to evaluate the competitive environment it operates in. As a result, the company can effectively control some of the factors influencing market competition in the beverage industry. Similarly, the company should participate in market expansion strategies by using celebrities, sportspersons, and teenagers to market their products hence achieving its annual profit targets from retail sales. Similarly, constant improvement of product taste, visibility, and tastes will enable the company to differentiate its market segment by meeting consumer needs. The strengths of these alternative strategies are the availability of a strong financial base for implementation and an able management team that will guide their implementation. However, there are weaknesses such as the potential of increasing new brands to the portfolio which increases the risk of failed products.
Overall, Pepsi needs to embrace changes to survive in the dynamic business environment. The organizational structure should adopt a purely hierarchical system to align with the goals and business operations in the global market (Hunger, 2020). With a hierarchical organizational structure, the company can easily promote specialization, effective communication and maintain authority throughout its firms across the world. The company should also focus on values such as trust, empowerment, responsibility, and sustained growth to create economically and socially aggressive brands. With technology, the company has done its best to promote e-commerce and marketing strategies across the world using digital systems. To promote human resource management PepsiCo should consider rewards were the best performance which will eventually motivate its workforce to achieve the best performances

Conclusion
Pepsi’s company continues to be a global leader in the beverages and foods industry. Being a merger, the company has utilized different strategies to maintain its competitiveness and increase profitability. Through SWOT, SPACE, and BCG matrices analysis, the discussion has demonstrated how and why the company has made certain decisions to stay at the top of the industry. Leveraging its strengths and opportunities while initiating strategies to avert threats and resolve weaknesses, PepsiCo has achieved customer loyalty and spread its fortunes in different content across the globe. Besides, the company has several strategic alternatives including potential changes to its organizational structure and values to optimize its potential.

References
Hunger, J. D. (2020). Essentials of strategic management.
Jallow, D. (2021). A Strategic Case Study on PepsiCo. Available at SSRN 3828353.
Kotler, P., Keller, K., Brady, M., Goodman, M., & Hansen, T. (2019). Marketing Management: 4th European Edition. Pearson UK.
PepsiCo. (2020). 2019 annual report. Retrieved from https://www.pepsico.com/investors/financialinformation/annual-reports-and-proxy-information.
Quan, J. (2020, November). The Trend of PepsiCo by Comparing PepsiCo’s Financial Reports in 2018 to 2019 Based on Harvard Analytical Framework. In 2020 5th International Conference on Modern Management and Education Technology (MMET 2020) (pp. 162-166). Atlantis Press.