Pepsico Int

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| | IN 2007: STRATEGIES TO INCREASE

SHAREHOLDER VALUE

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² Established in 1965
² Strong brand image, presence in more than 200 countries
² Market leader in beverages and convenient food sector
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² Restructuring, spin offs, acquisitions, product reformulations,
expansion of product line, Power of One strategy
² Currently operating as PBNA, FLNA, PepsiCo International
² Capturing strategic benefits throughout the value chain
² Entering into new segments
² Dividends from 2001-2006 increased at annual rate of 15%,
EPS- $1.16
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² Spin Offs

² Acquisitions

² Product Reformulations ± Good For You, Better For You

² Restructuring ( Focus Strategy)- Pepsi Bottling Group

² Power of one strategy

² Generic Strategies esp. focussed on differentiation


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× Declining market
×Brand Image share(carbonated:2005-06-
×Market leader 52.9%-50.9%)
×International presence × Federal trade Commission
×Power of One strategy norms
×Strong financial condition × Liking Coke:48%,Pepsi:32%
(Revenues 2008-$20,000) × Packaging unattractive as
×Core competency- mass Coca Cola
production, distribution × Quaker presence limited
×Strongly differentiated × Follower in many segments
products × Focus: Gen Y
×Strong advertising, × Health issues
promotion × Presence yet to be felt in
×Product innovation some nations
×Attractive customer base
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×Increase presence outside × For Quaker- Kellogg's,
N.America General Mills
×Servings/month × Restrictive trade: FTC norms
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× Beverages-Coca Cola
Developing(
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×Expansion of product line(Cold × Duplication of efforts(Taka
Coffee, Nimbooz, Lipton RTD Tak)
teas’ × Beverage industry-mature
×Expand Gatorade, Quaker × Pesticide blame on PepsiCo
internationally × >50% sales: Fritolay,
×Use local companies besides downturn poses a big threat
KFC, Pizza Hut
× Competitive competitors:
×New technology/innovation
Coca Cola, Kraft, Cadbury
×Acquisition/joint
Schweppes
ventures(Haldiram)
×Better for You,Good for You × New potential competitors:
products Parle, Britannia, ITC
×Skill transfer opportunities
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² Diversification into unrelated business ( restaurants, sports
gear)
² Offensive strategy: LMN and NIMBOOZ
² Defensive strategy: Metro C & C, Best Price Modern
Wholesale
² CSR: partnership with NGOs
² Shift in focus
² Related diversification: Sports Drink- Health Drinks
² Low cost strategy: Tropicana (Indian market)
² Distinctive image strategy: Quaker Oats
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² Continuous expansion of product line

² New geographies, new markets, new segments

² Curtailing expenses

² More proactive approach: NIMBOOZ

² Initiatives such as Innovation Summits

² Cutting edge: R & D

² Market survey and research


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² Risk
² Core competencies
² Limited competitive advantage potential
² Corporate expertise: weaker foundation for enhancing
shareholder value
² Potential benefits- offensive strategies
² Keeping pace with technology
² Differentiation- competitors- doom!!!
² Eroding of profitability??
² ³SO WHAT´ attitude
² Too fixated on cost reductions??

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