implementation of strategic management tools and strategies
TRANSCRIPT
Name: HASEEB ULLAH
ID : 5801Semester: 5th
Selected company: PEPSICO
Topic : Implementation of strategic
management tools and strategies
IntroductionHistoryObjectives and GoalsVision and Mission4 P`sSegmentationSWOT AnalysisBCG matrix G.E model Space matrix QSPM matrix
Introduction
Mountain Dew is a carbonated soft drink produced by PepsiCo.
The original formula was invented in 1940.
History
The Hartman brothers developed Mountain Dew in the 1930 mixing soda in whiskey.The original formula was invented in 1940 by Tennessee beverage bottlers Barney and Ally Hartman.
William Hartman JonesFounder of Mountain Dew
Objectives and Goals
To build mutual trust with consumers.To ensure continuous improvement of PepsiCo's environmental performance.To fulfill customer satisfaction.Measuring the cost and benefits to business of it`s activities.
Vision statementPepsiCo's vision to grow Mountain Dew in the shortest possible time to number one in pakistan with a unique ability to capture consumers of youngsters.
Mission statementPepsiCo`s mission is to provide the best food and beverage to people throughout the world and gain high market shares
Marketing mix(4 P`s)
1. Product-- soft drink2. Place -- available every where3. Price-- reasonable price4. Promotion--T.V, Newspapers, billboards And internet.
Segmentation
SWOT Analysis
Strength
1. Strong brand awareness, recall through memorable advertisements2. Unique taste and clear positioning attracts a strong brand following3. International brand with lot of resources to grow in the markets4. Good distribution and availability of the product5. Strong brand name of the parent company adds value
Weakness:1. A lot of investment is required for branding exercises2. Stiff competition means limited market share Opportunities:1. Innovate a new healthy drink with citrus fruit flavor2. Multiple flavors already exist in foreign markets – launch them here
Threats:1. Sprite, its strongest competitor is well entrenched in the market2. Pepsi may cut its marketing budget in the future3. Lot of local drinks and Nimboo based brands are posing a threat.
S1 Strong brand awareness2 Unique taste and clear positioning3 International brand/ resources4 Good distribution & corporate brand
W1 Market for soda products is crowded
2. Stiff competition means limited market share
O1. Innovate a new healthy drink with citrus fruit flavor2. Multiple flavors already exist in foreign markets – launch them here
S1.O1 strong brand name Achieve new healthy drink.S4.S2 launch international product in Pakistan
W1.O3 healthy product can be innovated W2.O4 product related to sport can be launched
1. Sprite, its strongest competitor is well entrenched in the market2. Pepsi may cut its marketing budget in the future3. Lot of local drinks and Nimboo based brands are posing a threat4. Word demand for sport drink energy drink
S1 .T2 Pepsi can reduce marketing budget S3.T3 international brand can competitors
W1.T2reduce expenses related to different department W2.T3 position through local media
Suggested strategies by SWOT
• Market Penetration • Market development • Horizontal diversification
CPMfactors Weightage rating Total
scorerating Total
scorerating Total
score
Market share 0.20 5 1.00 4.5 0.90 3.5 0.70Distribution channel 0.15 4 0.60 3.5 0.52 3 0.45Pricing strategy 0.20 3 0.60 3 0.60 3 0.60HRM 0.15 4 0.60 4 0.60 3.5 0.52Cost reduction 0.15 4 0.60 4 0.60 4 0.60Advertising 0.10 5 0.50 4 0.40 3.5 0.35R & D 0.10 4.5 0.45 3.5 0.35 3.5 0.35total 1.00 4.35 3.97 3.57
PEPSI COKE Sprite 3g
PESPI = 4.35 COKE= 3.97 sprite 3g=3.57All companies result is above than average but PEPSI lead the market.
Financial Strength (FS)(+1 worst, +7 best)
Environmental Stability (ES)(-7 worst, -1 best)
Return on investment 6 Rate of Inflation -2Leverage 4 Technological Changes -4Net income 5 Price Elasticity of demand -1Working Capital 3 Taxation -5Inventory turnover 3 Barriers -2FS average 5.2 ES average -2.8
Competitive Advantage (CA)(-7 worst, -1 best)
Industry strength(IS)(+1 worst, +7 best)
Market Share -1 Growth potential 6Product Quality -1 Financial stability 7Customer Loyalty -3.5 Ease of entry to market 1Tech know How -1 Resource utilization 6
Control over suppliers & distributers -1 Profit potential 5CA average -1.5 IS average 5
Space matrix
Suggested strategies by SPACE matrixSpace Matrix
CA IS
FS
ES
Aggressive
Defensive Competitive
Conservative
X= CA+IS = (-1.5+5) =3.5Y= FS+ES = (5.2+-2.8) = 2.4
Suggested strategies
1. Market development2. Counter offensive3. Product development
BCG Matrix
IIStars
(Mountain dew)I
Question Marks
IIICash Cows
BataIV
Dogs
High 20+
Med. 0
Low -20
Indu
stri
al S
ales
Gro
wth
R
ate
Relative Market Share Position Low 0.0High 1.0 Med. 5.0
Suggested strategies by BCG matrix
1. Market development2. Market penetration3. Product development
General electric model
Strategic business unit Sale Demand Brand image Market share Quality Product innovation
Market attractiveness
Competitive intensity and competitive intelligence.
Historical Profit Margin Environmental Situation Economic Situation Customer Specification
High Medium low
High
Medium
low
Business unit strength Market att
ractivene
ss
65%
Suggested strategies by GEM matrix
• Market development• Product development• Counter offensive strategy
Strategy summary
Alternative strategies SWOT space BCG matrix GEM matrix
Count
Product developement 1 1 1 3
Market development 1 1 1 1 4
Horizontal diversification 1 1 1 3
Counter offensive 1 1 2
QSPM matrix (fixed method)
Key internal factors weight Product developement
Horizontal diversification
Market development
strength
Strong brand awareness 4 2 1 3
Unique taste and clear positioning 4 3 2 4
International brand/ resources 4 3 1 3
Good distribution & corporate brand 4 3 2 3
weakness
A lot of investment is required for branding exercises
4 2 1 3
Market for soda products is crowded
4 1 1 2
Key internal factors weight Product developement
Horizontal integration
Market developement
opportunitiesInnovate a new healthy drink with citrus fruit flavor
4 3 3 2
Multiple flavors already exist in foreign markets – launch them here
4 2 2 3
ThreatsSprite, its strongest competitor is well entrenched in the market
4 3 2 3
Pepsi may cut its marketing budget in the future
4 2 1 2
Lot of local drinks and Nimboo based brands are posing a threat
4 2 3 3
Sum of total attractiveness score 26 19 31
Conti…
Key internal factors weight Product developement
Horizontal integration
Market development
strength
Strong brand awareness -4 2 3 3
Unique taste and clear positioning -4 1 2 4
International brand/ resources -4 1 3 3
Good distribution & corporate brand -4 1 2 3
weakness
A lot of investment is required for branding exercises
-4 2 3 3
Market for soda products is crowded
-4 3 3 2
QSPM matrix fixed method (negative)
Key external factors weight Product developement
Horizontal integration
Market developement
opportunitiesInnovate a new healthy drink with citrus fruit flavor
-4 1 1 2
Multiple flavors already exist in foreign markets – launch them here
-4 2 2 1
ThreatsSprite, its strongest competitor is well entrenched in the market
-4 1 2 1
Pepsi may cut its marketing budget in the future
-4 2 3 2
Lot of local drinks and Nimboo based brands are posing a threat
-4 2 1 1
Sum of total attractiveness score -23 -28 -20
Conti…
QSPM matrix (variable method)
Key internal factors weight Product developement
Horizontal diversification
Market development
strength
Strong brand awareness 10 8 5 8
Unique taste and clear positioning 8 5 4 8
International brand/ resources 12 8 7 12
Good distribution & corporate brand 7 5 6 4
weakness 7
A lot of investment is required for branding exercises
12 6 8 12
Market for soda products is crowded
10 7 8 10
Key internal factors weight Product developement
Horizontal integration
Market developement
opportunitiesInnovate a new healthy drink with citrus fruit flavor
12 10 8 10
Multiple flavors already exist in foreign markets – launch them here
15 9 9 14
ThreatsSprite, its strongest competitor is well entrenched in the market
10 8 7 9
Pepsi may cut its marketing budget in the future
9 8 7 8
Lot of local drinks and Nimboo based brands are posing a threat
12 11 6 10
Sum of total attractiveness score 80 75 90
Conti…
QSPM matrix (variable method)
Key internal factors weight Product developement
Horizontal diversification
Market development
strength
Strong brand awareness -10 2 5 2
Unique taste and clear positioning -8 3 4 3
International brand/ resources -12 4 5 2
Good distribution & corporate brand -7 2 1 3
weakness
A lot of investment is required for branding exercises
-12 6 4 2
Market for soda products is crowded
-10 3 2 3
Key internal factors weight Product developement
Horizontal integration
Market developement
opportunitiesInnovate a new healthy drink with citrus fruit flavor
-12 2 4 2
Multiple flavors already exist in foreign markets – launch them here
-15 6 6 1
ThreatsSprite, its strongest competitor is well entrenched in the market
-10 2 3 1
Pepsi may cut its marketing budget in the future
-9 1 2 1
Lot of local drinks and Nimboo based brands are posing a threat
-12 1 6 2
Sum of total attractiveness score -32 -42 -23
Conti…