case study solution the pepsicompany and iys solution semester weekend

7/21/2019 Case Study Solution the Pepsicompany and Iys Solution Semester Weekend

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CASE STUDY: PEPSICO.

Pepsi Co. evaluate that in Pakistan they have very strong brand loyalty, they have

strong financial condition, they also have latest technology available in their

department and all departments are united to perform work effectively. But in the

category of snacks they do not have much experience. There are several ethical and

religious issues related with their snacks, they don’t have huge work force but the

positive thing is that they have the capability to produce on larger scale and backing

of PepsiCo.

Moreover the company also evaluates that for both of their SBU’s operating in

Pakistan market is not declining and there is a continuous increase in the quarterly

sales of their SBU’s. According to the accounts and finance departments the

strategist got the following data:

SBU Sales of 2014 Sales of 2013

Beverage 100,000,000 90,000,000

Snack 5,000,000 4,500,000

Competitors Sales of 2014

Coca Cola 90,000,000

Pakola 3,000,000

Kolsan Slanty 9,000,000

Q1: Develop proposed mission and vision of PepsiCo. with their evaluation matrix

Q2: Develop IFE and EFE for both SBU’s of PepsiCo. separately and write their

conclusion

Q3: Develop CPM matrix for both SBU’s of PepsiCo. separately and write proper

conclusion

Q4: Make TOWS matrix for both the SBU’s of PepsiCo. separately and identify

strategies and give them proper name

Q5: Make BCG matrix for both SBU’s of PepsiCo. and write proper conclusion

Q6: Make IE matrix for both the SBU’s of PepsiCo. and write proper conclusion

Q7: Make QSPM matrix in order to identify the best strategy or strategies which must

be implemented in both SBU’s of PepsiCo. (Hint: use strategies from TOWS matrix

for the purpose of evaluating them through QSPM)

Q8: Make Space matrix for both the SBU’s of PepsiCo. and write proper conclusion



M/S PEPSICO. PAKISTAN

QUESTION NO. 2


SBU BEVERAGES

INTERNAL FACTOR EVALUTION MATRIX

SR. NO. FACTORS WEIGHT RATE SCORE

Strengths

1 Strong brand loyalty 0.27 4 1.08

2 Strong financial condition 0.22 4 0.88

3 Latest technology in all departments 0.15 4 0.60

4 Successful marketing and advertising 0.10 4 0.40

5 Unity within departments for greatereffectiveness

0.06 3 0.18

Weaknesses

6 Decline in taste 0.06 2 0.12

7 Low pricing as compared to competitors 0.05 2 0.10

8 Weak brand awareness among customers 0.05 2 0.10

9 Targeting only young consumers inadvertisements

0.04 1 0.04

Total 1 3.50

Conclusion

Since the total weighted score of Beverage SBU of M/S PEPSICO. PAKISTAN is

found to be 3.50 out of 4, that’s why SBU is progress ive in maintaining its internal

factors.




SBU SNACKS

INTERNAL FACTOR EVALUTION MATRIX


Strengths

1 Capability to produce on larger scale 0.20 4 0.80

2 Backing of PepsiCo. 0.15 4 0.60

Weaknesses

3 Religious issues related to production 0.25 2 0.50

4 Ethical issues related to production 0.20 2 0.40

5 Not experienced working force as comparedto competitors

0.10 1 0.10

6 Don’t have enough work force 0.10 2 0.20

Total 1 2.60

Conclusion

Since the total weighted score of Snacks SBU of M/S PEPSICO. PAKISTAN is found

to be 2.60 out of 4, that’s why SBU is average in maintaining its internal factors.




SBU BEVERAGES

EXTERNAL FACTOR EVALUTION MATRIX


Opportun i t ies

1 Mass marketing & advertising to increaselevel of awareness

0.25 4 1.00

2 Horizontal Integration over Pakola orGourmet

0.15 3 0.45

3 Producing beverages in Pakistan themselves 0.07 4 0.28

4 Launching new brands of SKU’s 0.03 4 0.12

Threats

5 Law & Order situation of Pakistan 0.25 4 1.00

6 Health conscious people avoiding thebeverage

0.17 3 0.51

7 Decrease in Brand loyalty in Pakistan 0.06 3 0.18

8 Decrease in buying power of consumers 0.02 2 0.04

Total 1 3.58

Conclusion

Since the total weighted score of Beverage SBU of M/S PEPSICO. PAKISTAN isfound to be 3.58 out of 4, that’s why SBU is progress ive in maintaining its external

factors.




SBU SNACKS

EXTERNAL FACTOR EVALUTION MATRIX


Opportun i t ies

1 Launching of new brands & SKU’s 0.25 4 1.00

2 Mass marketing & advertising to dealeffectively with religious & ethical issues

0.15 3 0.45

3 Increase sales by upselling & cross selling 0.05 4 0.20

4 Enhancement in trade promotion 0.05 3 0.15

Threats

5 Continuous de-marketing of brand 0.23 3 0.69

6 Law & order situation of Pakistan 0.16 3 0.48

7 Continuous religious concerns in Pakistan 0.08 2 0.168 Competitors policies & strategies 0.03 3 0.09

Total 1 3.22

Conclusion

Since the total weighted score of Snacks SBU of M/S PEPSICO. PAKISTAN is found

to be 3.22 out of 4, that’s why SBU is above average in maintaining its external

factors.



QUESTION NO. 3


SBU BEVERAGES

COMPETITIVE PROFILE MATRIX

Sr.No.

Critical SuccessFactors

Weight PEPSI COCA COLA PAKOLA

Rate Score Rate Score Rate Score

1 Marketing & Advertising

0.20 4 0.80 4 0.80 2 0.40

2 Availability ofFinance

0.20 4 0.80 4 0.80 3 0.60

3 Consumer Loyalty 0.15 4 0.60 4 0.60 3 0.45

4 Market Share 0.13 4 0.52 3 0.39 2 0.265 Product Quality 0.10 3 0.30 4 0.40 2 0.20

6 Brand Reputation 0.08 4 0.32 4 0.32 3 0.24

7 SuccessfulProductPromotions

0.05 4 0.20 4 0.20 3 0.15

8 PriceCompetitiveness

0.04 4 0.16 3 0.12 4 0.16

9 Product Range 0.03 4 0.12 4 0.12 2 0.06

10 GeographicalExpansion

0.02 4 0.08 4 0.08 3 0.06

1 3.90 3.83 2.58

Conclusion

Since the total weighted score of SBU Beverages for M/S PEPSICO. PAKISTAN is

3.90 out of 4, which is more than M/S COCA COLA and M/S PAKOLA, but that does

not mean that PepsiCo. is better than Coca Cola and Pakola, it only means that

PepsiCo. is emphasizing more on its critical success factor as compared to CocaCola and Pakola.




SBU SNACKS

COMPETITIVE PROFILE MATRIX

Sr.No.

Critical SuccessFactors

Weight PEPSI (LAYS) KOLSAN(SLANTY)

SNACKCITY(KURLEEZ)

Rate Score Rate Score Rate Score

1 Marketing & Advertising

0.20 4 0.80 3 0.60 3 0.60

2 Availability ofFinance

0.17 4 0.68 4 0.68 4 0.68

3 Consumer Loyalty 0.15 3 0.45 4 0.60 3 0.45

4 Market Share 0.13 3 0.39 4 0.52 3 0.39

5 Product Quality 0.10 4 0.40 4 0.40 4 0.406 Brand Reputation 0.10 4 0.40 4 0.40 4 0.40

7 Successful ProductPromotions

0.05 4 0.20 3 0.15 3 0.15

8 PriceCompetitiveness

0.05 2 0.10 4 0.20 3 0.15

9 Product Variety 0.05 4 0.20 3 0.15 4 0.20

1 3.62 3.70 3.42

Conclusion

Since the total weighted score of SBU Snacks for M/S KOLSAN (SLANTY) is 3.70

out of 4, which is more than M/S PEPSI (LAYS) and M/S SNACKCITY (KURLEEZ),

but that does not mean that Kolsan (Slanty) is better than Pepsi (Lays) and

Snackcity (Kurleez), it only means that Kolsan (Slanty) is emphasizing more on its

critical success factor as compared to Pepsi (Lays) and Snackcity (Kurleez).



QUESTION NO. 5


SBU BEVERAGES

TOWS MATRIX

STRENGTHS1) Strong brand loyalty2) Strong financial condition3) Latest technology in all

departments4) Successful marketing and

advertising5) Unity within departments

for greater effectiveness

WEAKNESSES1) Decline in taste2) Low pricing as compared

to competitors3) Weak brand awareness

among customers4) Targeting only young

consumers in

advertisements OPPORTUNITIES

1) Mass marketing &advertising to increaselevel of awareness

2) Horizontal Integrationover Pakola or Gourmet

3) Producing beverages inPakistan themselves

4) Launching new brandsof SKU’s

SO Strategies WO Strategies

Use strong financial condition forhorizontal integration over Pakolaor Gourmet (S 1 , O 2 )Strategy: Horizontal Integrat ion

Use successful marketing andadvertising to increase level ofawareness (S 4 , O 1 )

Strategy: Product Deve lopment

Launch new brands of SKU’s toovercome low pricing ascompared to competitors (W 2 ,

O 4 )

Strategy: Conglomerate

Diversi f icat ion

Mass marketing & advertising toincrease level of awareness toovercome targeting only youngconsumers (W 4 , O 1 )

Strategy: Market Penetratio n

THREATS1) Law & Order situation of

Pakistan2) Health conscious people

avoiding the beverage3) Decrease in Brand

loyalty in Pakistan

4) Decrease in buyingpower of consumers

ST Strategies WT Strategies

Use strong financial condition toovercome decrease in buyingpower of consumers (S 2 , T 4 )

Strategy: Market Penetrat ion

Use successful marketing and

advertising to overcome decreasein brand loyalty in Pakistan (S 4 ,

T 3 )

Strategy: Market Developm ent

Improve taste in order to avoiddecrease in brand loyalty inPakistan (W 1 , T 3 )

Strategy: Produc t Developm ent

Increase brand awareness

among customers to cope upwith health conscious peopleavoiding the beverage (W 3 , T 2 )

Strategy: Market Penetration

Preferred Strategy

According to strategist, the preferred strategies from the matrix are Product

Development and Market Development

INTERNAL

FACTORS

EXTERNAL

FACTORS




SBU SNACKS

TOWS MATRIX

STRENGTHS1) Capability to produce on

larger scale2) Backing of PepsiCo.

WEAKNESSES1) Religious issues related to

production2) Ethical issues related to

production3) Not experienced working

force as compared tocompetitors

4) Don’t have enough workforce

OPPORTUNITIES1) Launching of new

brands & SKU’s 2) Mass marketing &

advertising to dealeffectively with religious& ethical issues

3) Increase sales byupselling & cross selling

4) Enhancement in tradepromotion

SO Strategies WO StrategiesUse backing of PepsiCo. tolaunch new brands & SKU’s(S 2 , O 1 )


Cong lomerate Diversi f icat ion

Use capability to produce onlarger scale to increase sales byupselling & cross selling (S 1 , O 3 )

Strategy: Produc t DevelopmentForward Integrat ion

Mass marketing & advertising toavoid religious & ethical issues(W 1 , W 2 , O 2 )


Enhancement in trade promotionby increasing enough work force(W 4 , O 4 )

Strategy: Produc t Developm ent

THREATS1) Continuous de-

marketing of brand2) Law & order situation of

Pakistan3) Continuous religious

concerns in Pakistan4) Competitors policies &

strategies

ST Strategies WT Strategies

Use backing of PepsiCo. toovercome continuous de-marketing of brand (S 2 , T 1 )

Strategy: Market Developm ent

Use backing of PepsiCo. toovercome competitors policies &strategies (S 2 , T 4 )

Strategy: Produc t Development

Improve religious & ethical issuesrelated to production to facecontinuous de-marketing ofbrand (W 1 , W 2 , T 1 )

Strategy: Product Development

Increase work force to avoidcompetitors policies & strategies

(W 4 , T 4 )Strategy: Market Penetrat ion

Preferred Strategy


Development and Market Penetration

INTERNAL

FACTORS

EXTERNAL

FACTORS



Page

10

QUESTION NO. 6


SBU BEVERAGES

BCG MATRIX

RMS =

=100,000,000

90,000,000

= 1.11

SGR =

−

=100,000,000− 90,000,000

90,000,000

= 0.11

1 20

0.5 0

− 20

0

(1.11, 0.11)

Related Market Share

ales Growth

Rate



Page

11

Conclusion

Since the RMS of SBU Beverages of PepsiCo. is 1.11 and SGR of SBU Beverages

of PepsiCo. is 0.11 , that’s why SBU Beverages is in quadrant 2 of BCG matrix and

selected strategies which we can pursue are Market Penetrat ion, Product

Development, Market Development, Concentr ic Diversi f icat ion, Horizontal

Diversi f icat ion, Backward Integrat ion and Forward Integrat ion

Preferred Strategy


Development, Market Development and Market Penetration



Page

12


SBU SNACKS

BCG MATRIX

RMS =

=5,000,000

9,000,000

= 0.56

SGR = −

= 5,000,000− 4,500,0004,500,000

= 0.11

= 0.11

1 20

0.5 0

− 20

0 (0.56, 0.11)

Related Market Share

Sal

es

Gr

ow

th

Sh

are



Page

13

Conclusion

Since the RMS of SBU Snacks of PepsiCo. is 0.56 and SGR of SBU Beverages of

PepsiCo. is 0.11 , that’s why SBU Beverages is in quadrant 2 of BCG matrix and

selected strategies which we can pursue are Market Penetrat ion, Product

Development, Market Development, Concentr ic Diversi f icat ion, Horizontal

Diversi f icat ion, Backw ard Integrat ion and Forward Integrat ion

Preferred Strategy


Development, Market Developm ent and Market Penetration



Page

14

QUESTION NO. 7


SBU BEVERAGES

INTERNAL EXTERNAL MATRIX

Conclusion

Since the total weighted score of IFE of SBU Beverages of M/S PEPSICO.

PAKISTAN is 3.50 and total weighted score of EFE of SBU Beverages of M/S

PEPSICO. PAKISTAN is 3.58 , that’s why SBU lies in 1st

cell of IE matrix whichindicates Grow & Bui ld strategy the strategies which can pursue are Backward

Integrat ion, Forw ard Integrat ion, Hor izontal Integrat ion, Market Penetrat ion,

Market Developm ent and Product Deve lopment

Preferred Strategy



IFE SCORE

23

3

2

E

F

E

S

STRONG WEAK

LOW

(3.50, 3.58)



Page

15


SBU SNACKS

INTERNAL EXTERNAL MATRIX

Conclusion

Since the total weighted score of IFE of SBU Beverages of M/S PEPSICO.

PAKISTAN is 2.60 and total weighted score of EFE of SBU Beverages of M/S

PEPSICO. PAKISTAN is 3.22 , that’s why SBU lies in 2nd cell of IE matrix which

indicates Grow & Bui ld strategy the strategies which can pursue are Backward


Market Developm ent and Product Deve lopment

Preferred Strategy



IFE SCORE

1234

3

1

EF

E

S

C

AVERAGE

MEDIUM

LOW

(2.60, 3.22)



Page

16

QUESTION NO. 8


SBU BEVERAGES

SPACE MATRIX

INTERNAL STRATEGIC POSITION

Compet i t ive Advantage (CA)

-1 Market Share-1 Brand Image-2 Customer Loyalty-3 Control Over Suppliers-2 Technological know-how

Average: -1.8

Financ ial Stabil i ty (FS)

+5 Working Capital+5 Return on Investment+4 Leverage+6 Net Income+4 Inventory Turnover

Average: +4.8

EXTERNAL STRATEGIC POSITION Indu stry Stabil i ty (IS)

+5 Growth Potential+6 Ease of Entry+6 Profit Margin+5 Financial Stability+4 Resource utilization

Average: +5.2

Environmental Stabi l ity (ES)

-2 Inflation Rates

-1 Technological Change-2 Barriers to Entry-3 Demand Variability-4 Competitive Pressure

Average: -2.4Calculation on X- axis (CA , IS)

Calculation on X- axis = IS + (-CA)

= 5.3 + (- 1.8)

= +3.40



Page

17

Calculation on Y- axis (FS , ES)

Calculation on X- axis = FS + (-ES)

= 4.8 + (-2.4)

= +2.40

Conclusion: Since the X-axis score of SBU Beverages of M/S PEPSICO.PAKISTAN is +3.40 and Y-axis score of SBU Beverages of M/S PEPSICO.

PAKISTAN is +2.40 , that’s why SBU lies in 1st quadrant of SPACE matrix which

indicates Aggress ive strategy the strategies which can pursue are Backward


Market Development, Product Development, Concentr ic Diversi f icat ion and

Cong lomerate Diversi f icat ion

Preferred Strategy: According to strategist, the preferred strategies from the matrix

are Product Deve lopment , Market Developm ent and Market Penetratio n

FP

ES

ISCA

+1 +3+2 +4-1-3-4 -2

-1

-2

-3

-4

+1

+2

+3

+4

(+3.40, +2.40)



Page

18


SBU SNACKS

SPACE MATRIX

INTERNAL STRATEGIC POSITION

Compet i t ive Advantage (CA)

-4 Market Share-3 Brand Image-3 Customer Loyalty-2 Control Over Suppliers-2 Technological know-how

Average: -2.80

Financ ial Stabil i ty (FS)+4 Working Capital+3 Return on Investment+2 Leverage+3 Net Income+3 Inventory Turnover

Average: +3.00

EXTERNAL STRATEGIC POSITION Indu stry Stabil i ty (IS)

+4 Growth Potential

+5 Ease of Entry+3 Profit Margin+3 Financial Stability+3 Resource utilization

Average: +3.60

Environmental Stabi l ity (ES)

-3 Inflation Rates-3 Technological Change-3 Barriers to Entry-5 Demand Variability

-6 Competitive PressureAverage: -4.00

Calculation on X- axis (CA , IS)

Calculation on X- axis = IS + (-CA)

= 3.60 + (- 2.80)

= +0.8



Calculation on Y- axis (FS , ES)

Calculation on X- axis = FS + (-ES)

= 3.00 + (-4.00)

= -1.00

Conclusion

Since the X-axis score of SBU Snacks of M/S PEPSICO. PAKISTAN is +0.80 and Y-axis score of SBU Snacks of M/S PEPSICO. PAKISTAN is -1.00 , that’s why SBU lies

in 1st quadrant of SPACE matrix which indicates Aggress ive strategy the strategies

which can pursue are Backw ard Integrat ion, Forw ard Integrat ion, Horizontal

Integrat ion, Market Penetrat ion, Market Development and Product

Development

Preferred Strategy



FP

ES

ISCA

+1 +3+2 +4-1-3-4 -2

-1

-2

-3

-4

+1

+2

+3

+4

(+0.80, -1.00)

case study solution the pepsicompany and iys solution semester weekend

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