Question

6 Strong strategies to improve PepsiCo and each of its advantages and disadvantages?

Answer 1

PepsiCo is a global leading soda beverage brand with huge customer base. PepsiCo has wide product portfolio that consists of many flavours. The company has a global distribution and sales network; and sells its products in more than 200 nations. It is an international brand with many billion dollar brands in its portfolio

1) Pricing strategy: PepsiCo applies the cost leadership as its main generic competitive strategy. It primarily focuses on minimization of cost as an approach to enhance the PepsiCo's overall competitiveness and financial performance. For example, to compete against Coca-Cola products, PepsiCo offers low prices based on low operating costs. The affordable pricing resulted to higher sales, revenue and popularity.

-- The company is facing higher inflation.

-- It is increasingly getting expensive to purchase main ingredients

2) Marketing strategy: The advertising strategy of PepsiCo is a main strength. The great strategy on advertising has helped in becoming a leading brand name in the world. It applies numerous channels for marketing its products and brand. Due to an effective strategy the company has started using digital channels and achieved plenty of growth in the market share and customer base. However the disadvantages include that:

-- Higher costs

-- The rise of obesity around the world impacts the marketing strategies

-- Pepsi continues to depict the weakness in terms volume compared to the rival brands

3) Product Diversification: The Company manufactures more than 50 different products that include Mountain Dew, Pepsi Max, Mirinda, 7 up and Doritos. It has helped to widen the market share and moving to new market; thus increasing the revenue by covering almost all the market segments.The diversification respond to concerns of consumer about healthier drink alternatives. However the disadvantages of product diversification

-- It is difficult to control all the sub products at the same time

-- Lead to a slow growth of the company

-- It is costly to produce numerous products using different labour and machinery

4) Community Activities:

The company is building brighter futures in the communities, through strategic grants given by the Pepsi Cola Foundation and through volunteering by employees and community service. It participates in corporate social activities all around the world. Expansion of the eco-friendly, sustainable materials of packaging for soda cans and bottles build the goodwill for the brand. It has helped to improve the goodwill of the company and in effective communication of the brand value to the consumers. It's disadvantages are:

-- It involves loads of money do community projects

-- It is difficult to predict the project's outcome

5) Sponsorships: An effective marketing method is the sponsorships wherein the company each year spend nearly 1 billion US dollars to sponsor numerous activities around the world. It has increased the consumer base, brings recognition to the company and advertising the product to the large target audience. Its disadvantages are:

-- It is very expensive to sponsor activities

-- It is hard to predict the sponsorship's effectiveness

6) Social Media Commercials: PepsiCo uses social media such as YouTube, Face book and Twitter for advertising the brands. It creates a higher impact on the young wide range of consumers. With the strengthening of the social media and online presence helped to enhance the market products, competitive position, and build unwavering loyalty by consumer. It's disadvantages are:

-- It can be very easily copied by other rivalries

-- It can be very easily easily upstaged by other rivalries