PepsiCo's situational analysis: internal strengths and competitive advantages

Pepsi Co

One of the most effective ways of analyzing a business is to conduct a situational analysis. This is when there is a focus on looking at past / current economic, political, social and technological information to understand the opportunities / challenges impacting a firm. In the case of Pepsi Co, the company has been continuing to evolve with different changes that are taking place inside the industry. To fully understand what is happening requires examining various internal factors, resources, tangible / intangible assets, capabilities, core competencies and conducting a value chain analysis. Together, these different elements will highlight the strengths and weaknesses of Pepsi Co. ("Situation Analysis")

Internal Factors

Internally, Pepsi Co has been focusing on increasing their reach through rapidly expanding. This occurred by identifying those firms that have the brands, which are seeing dramatic increases in growth and then acquiring them. Over the course of time, this helped the firm to locate managers that allowed the company to rapidly expand its operations internationally. As these subsidiaries, are used to give the company a footprint in specific areas without changing the brand. The combination of these factors helped Pepsi Co to locate competent managers who understood the needs of consumers in different markets. This allowed the firm to rapidly expand its presence and increase the overall amounts of internal resources (via quality personnel). (Penzkopfer)

Tangible and Intangible

As far as tangible assets are concerned, Pepsi Co has over 22 different brands with $1 billion in sales annually. A few of the most notable include: Frito Lay, Quaker Oats and Gatorade. At the same time, the company creates a unique local following in different countries through various bottlers. These are organizations that the firm has partnered with to distribute various products in these markets. The results are that Pepsi has many of the top selling brands as part of their portfolio of companies. ("Pepsi Co's Factory of the Future") (Penzkopfer)

Intangible

The presence in various countries means that Pepsi Co can build its image. This is accomplished through supporting programs that are helping the local economy. At the same time, they are engaged in activities to show that they care about communities. This builds upon the favorable images of the company's products. ("Pepsi Co's Factory of the Future") (Penzkopfer)

Capabilities

The various capabilities of Pepsi Co include: the ability to quickly enter / dominate key markets, purchase competitors that are profitable and use cultural factors to impact consumers. The combination of these elements helps the company to adapt to specific regions. When this happens, they will create a unique image of the brand in the minds of stakeholders. This is point that the firm can begin to dominate these markets. ("Pepsi Co's Factory of the Future") (Penzkopfer)

Core Competencies

The core competencies of Pepsi Co include: the management team, the ability to identify unique opportunities and offer a competitive product. These elements have allowed the company to gain market share at the expense of rivals. At the same time, is has helped the firm to expand into over 200 countries. ("Pepsi Co's Factory of the Future") (Penzkopfer)

Value Chain Analysis

When conducting a value chain analysis, it is clear that Pepsi Co is embracing a number of attributes. These include: strong inbound / outbound logistics, operations, marketing / sales, service, infrastructure, procurement, human resource management and technology development. All of these areas are showing how the firm is addressing the needs of stakeholders. The results are that the company has created a unique strategy for reaching out to each segment. Once this takes place, is the point that the firm is able to design a unique brand that is viewed favorably. Therefore, one could effectively argue that these areas helped to motivate employees and create a product that is in demand. This has allowed the company to become one of the largest snack and beverage producers in the world. ("The Value Chain")