Prepared By: Muhammad Yasir

FINAL PROJECT
SUBMITTED TO:
MS. SABA GULZAR

SUBMITTED BY:
KHALID IQBAL (7316)
SARMAD MALIK (7320)
ZAIN AHMED KHAN (7402)
MUHAMMAD YASIR (7317)
MUHAMMAD USMAN BASHIR (7318)
TOPIC:
THE INPUT, MATCHING AND DECISION STAGE OF
PEPSICO
COURSE:
MANAGERIAL POLICY
(B5402)
DATE OF SUBMISSION:
30 DEC - 2013

Prepared By: Muhammad Yasir

Table Of Contents
S.No.

Page No.

Introduction

03

I.F Evaluation

04

E.F Evaluation

05

SWOT Matrix

06

SPACE Matrix

07

BCG Matrix

09

I.E Matrix

11

GRAND STRATEGY Matrix

12

QSP Matrix

14

Prepared By: Muhammad Yasir

ACKNOWLEDGEMENT

First of all we would like to thank ALLAH the Almighty who blessed us with the
cognitive abilities and the ability to comprehend, understand and analyze complex
things.

We would also like to extend our gratitude to our teacher Ms. Saba Gulzar who
was a source of inspiration and knowledge throughout this semester and who
helped us greatly in understanding the different concepts related to managerial
policy.

We are also thankful to all our respondents, for sharing their opinions with us.
Their valuable input has helped us a lot in giving this Project its present shape.

Prepared By: Muhammad Yasir

Introduction to PepsiCo
PepsiCo serves 200 countries and is a world leader in providing food and
beverage products. Its brands consist of Frito-Lay North America, PepsiCo
Beverages North America, PepsiCo International and Quaker Foods North
America. Some of PepsiCo's brands are over 100 years old, however the
company was only founded in 1965 when Pepsi-Cola merged with FritoLay.
PepsiCo then attained Tropicana and Gatorade when they merged with
the Quaker Oats Company. The combined retail sales average about $92
billion. The company is focused on being the premier producer in supplying
the world with convenient foods. They offer a wide variety a food options as
well, including healthy options.
PepsiCo stands out as a company because of its sustainable advantage. It
includes widely known brands, innovative products, and powerful market
skills. The company also tries to benefit the community. To make
themselves a sustainable company, they have put a focus on the
environment and benefiting society with their business. Recently, PepsiCo
released information of their plan to drive sustainable water practices and
improve rural water in Africa, China, India, and Brazil.
Public Relations people have great opportunities to improve the company's
reputation because of the size and financial stability of the company.
PepsiCo is extremely well known in the world as a leading source of food
and beverage products with immense revenue.

Prepared By: Muhammad Yasir

(IF EVALUATION)
STRENGTH

S.No

Weightage Rating

Total
Weightage
Score

01

Brand Image

0.15

0.60

02

Strong Advertising

0.10

0.30

03

Effective Distribution Channel

0.10

0.30

04

Diversified SBUS

0.05

0.20

05

Focused of food Items

0.10

0.40

WEAKNESSES
01

Low Productivity

0.05

0.05

02

Loss in Beverages

0.10

0.20

03

Mkt Share Less than Coke

0.15

0.30

04

Huge Expenditure on Advertising

0.10

0.10

05

Increase Revenue in Snakes products than

Beverages

0.10

0.20

Total

1.00

Interpretation:
Pepsi has a total wieghtagae score is 2.65 Indicating that firm is in
above average performance

2.65

Prepared By: Muhammad Yasir

(EF EVALUATION)
OPPORTUNITIES

S.No

Weightage Rating

Total
Weightage
Score

01

Using Brand Image Diversification

0.10

0.20

02

Youth Preference For Beverages

0.05

0.15

03

Increasing Demand in Juice

0.05

0.20

04

Striving for Acquisition & Alliances

0.15

0.15

05

Expand Non Cola Business

0.10

0.10

THREATS
01

Health Issues

0.15

0.60

02

Competitors

0.10

0.10

03

Govt Regulation/ Policies

0.05

0.20

04

Change in Consumer preference & Taste

0.05

0.15

05

Increasing Demand of energy drinks

0.20

0.40

Total

1.00

2.50

Interpretation:
Pepsi has a total wieghtagae score is 2.5 in EFE. Indicating that firm is
in above average.

Prepared By: Muhammad Yasir

(CP MATRIX)
PEPSI

COKE
Rating

Total
Score

0.60

0.80 2

0.40

0.60

0.45 1

0.15

Distribution Channel 0.15

0.45

0.60 2

0.30

Pricing Strategy

0.10

0.30

0.30 2

0.20

Competitive

0.05

0.10

0.15 3

0.15

HRM

0.10

0.30

0.20 1

0.10

CRM

0.05

0.15

0.20 2

0.10

Product Portfolio

0.20

0.40

0.60 1

0.20

Total

1.00

3.35

2.55

Factors

Weightage Rating

Mkt Share

0.20

Cost Reduction

0.15

Total
Score

PAKOLA

3.05

Rating

Interpretation: The result of CPM is among 3 Beverages companies

Pepsi, Coke and Pakola is:
Pepesi > 3.05
Coke > 3.35
Pakola > 2.55
ALL companies total result is above average.

Total
Score

Prepared By: Muhammad Yasir

(SWOT Matrix)
Strength

Internal

External

Opportunities
1 Using brand image
diversification.
2 Youth preference for
beverages.
3 Invest in Russian & China
mkts.
4 Expand business in non cola
products.
5 Increasing demand in juice.
6 Social status of middle class.
Threats
1 Health Issues
2 Competitors
3 Govt Regulation/Policies
4 Change in consumer
preference & taste.
5 Declined demand of
carbonated drinks.

1 Brand Image
2 Strong Advertising
3 Effective Distribution
Channel
4 Diversified SBUS
5 Focused on Food Items
6 Ownership of Botteler
7 Acquistion & Alliances
8 Strong Financial Position
(SO)

1 Strong advertising increases the

youth preferences for beverages
(s2, o2)
2 Invest in Russia and china mkts
was possible because of effective
distribution channel.(s3, 03)
3 By taking an advantage of
diversification we should have to
more diversified in term of brand
image (s4, o1)

Weaknesses

1 Low productivity
2 Pepsis strategies overtaken
by coke in Pakistan.
3 Huge Expenditure on
Advertising
4 Mkt Share Less than Coke
5 Increase Revenue in Snakes
products than Beverages
6 Loss in Beverages

(WO)
1 Using more brand/product
diversification in division wise it
can minimize the expenditure
on adv and will increase the
product portfolio.(w3,01)
2 Expand more business &
introduce more non cola
products and should increase
the productivity(w1 04)

(ST)

(WT)

1 Brand image is the strongest

way to remove or hide health
issues (s1 t1)
2 We have strong financial
position & own distribution
channel network. We can
compete to our competitors easily
by taking advantage of strong
financial position, (s3.8, t2)

1 Ist we should resolve the

health issues as compare to
less mkt share we should
invest in health department
and resolve the issue (w4, t1)
2 Should decrease the huge
expenditure on advertising &
invest on carbonated drinks to
again increase the demand of
carbonated drinks. (w3, t5)

Prepared By: Muhammad Yasir

SPACE MATRIX
Financial Position

Stability Position

Liquidity

Demand Variability

-1

Cash Flow

Price Range

-1

ROI

Barriers to entry

-1

Earning per share

Inflation

-1

Average : 4.25

Average: -1

Competitive Position

Industry Position

Market share

-2

Ease of entry

Product quality

-3

Growth potential

Consumer loyaly

-3

Financial stability

Over suppliers

-3

Profit margin

Average: -2.75

Average: 5

Y-axis FP+SP = 4.25+ (-1) = 3.25

X-axis CP+IP = -2.75 + 5 = 2.25

Prepared By: Muhammad Yasir

SPACE MATRIX

Prepared By: Muhammad Yasir

Action Plan/Interpretation:

Prepared By: Muhammad Yasir

BCG MATRIX
Divisions of PepsiCo:

1. Frito-Lay North America (FLNA)

2. Foods North America (QFNA)
3. Latin American food and snack businesses (LAF)
4. PepsiCo Americas Beverages (PAB)
5. Middle East Asia and Africa (MEAA).
6. United Kingdom & Europe (UKEU)
Divisions

Current
Year
sales
2009

Last
Year
Sales
2008

Competitor
Sales

Profit

RMS

IGR

Sales
%

Profit
%

FLNA

12500

11586 18000

2960 0.6

28% 37%

QFNA

1905

1860

2500

582

0.7

4%

LAF

5895

4872

9985

890

0.4

21

13% 11%

PAB

10937

11090 15000

2026 0.7

-2

25% 25%

MEAA

6435

5492

12000

810

0.5

17

14% 10%

UKEU

5600

4575

9000

665

0.6

22

14% 8%

TOTAL

43272

66485

7930

7%

Prepared By: Muhammad Yasir

Calculations
Related Market Share
1. 12500/1800
2. 1905/2500
3. 5895/9985
4. 10937/15000
5. 6435/12000
6. 5600/9000

=
=
=
=
=
=

0.6
0.7
0.4
0.7
0.5
0.6

Industry Growth Rate

1. 12500 11586 *100 = 08
11586
2. 1905 1860 *100 = 03
1860
3. 5895 4872 * 100 = 21
4872
4. 10937 11090 *100 = -2
11090
5. 6435 5492

*100 = 17

5492
6. 5600 4575
4575

*100 = 22

Prepared By: Muhammad Yasir

0.7

0.6

0.5

0.4

Divisions

Quadrant

Strategy

FLNA
QAFNA
LAF
PAB
UKEU
MEEA

Star
Star
Q.Mark
C.C
Star, Q.Mark
Star

Forward, Horizontal
Forward, Backward
Mkt Penetration & Development
Related Diversification
Forward & Mkt, Prdoduct Devel.
Forward, Backward Integration

Prepared By: Muhammad Yasir

IE MATRIX
Divisions

IFE

EFE

PROFIT %

SALES %

FLNA
QAFNA
LAF
PAB
UKEU
MEEA

2.1
2.3
2.3
2.5
3.2
3.5

2.2
2.4
2.6
2.8
3.1
3.7

37%
7%
11%
25%
10%
8%

28%
4%
13%
25%
14%
14%

Prepared By: Muhammad Yasir

GRAND STRATEGY
MATRIX

Prepared By: Muhammad Yasir

Interpretation:

Prepared By: Muhammad Yasir

(QSPM)
S
N0.
*

Matrix

Forward

Backward

Horizontal

Intensive Strategies

Mkr Penetration

Mkt Development

Product Development

*
7

Diversification
Strategies
Related Diver.

Unrelated Diver.

Defensive Strategies

Liquidation

10

Divestitutes

10

Rerenchement

11

Joint Venture

Strategies
Integration Strategies

SWOT
Matrix

SPACE
Matrix

BCG
Matrix

IE
Matrix

GRANG
Matrix

2
1

5
3

Total

Prepared By: Muhammad Yasir

QSP Matrix

Alternate 01
Mkt Penetration

Alternate 02
Mkt Development

Strengths:

Weightage Att.
Total
Score Att.Score

Att.
Score

Total
Att Score

Brand Image
Strong Advertising
Effective Distribution Channel
Diversified SBUS
Focused of food Items
Weaknesses
Low Productivity

0.15
0.10
0.10
0.15
0.05

4
2
1
0
3

0.60
0.20
0.10
0
0.15

3
2
0
0
4

0.45
0.20
0
0
0.20

0.15

0.60

0.45

Loss in Beverages
Mkt Share Less than Coke
Huge Expenditure on
Advertising
Increase Revenue in Snakes
products than Beverages

0.15
0.10
0.05

3
0
1

0.45
0
0.05

2
1
0

0.30
0.10
0

0.05

0.10

0.10

TOTAL WEIGHTAGE
Opportunities
Using Brand Image
Diversification
Youth Preference For
Beverages
Increasing Demand in Juice
Striving for Acquisition &
Alliances
Expand Non Cola Business
Threats
Health Issues
Competitors
Govt Regulation/ Policies
Change in Consumer
preference & Taste
Increasing Demand of energy
drinks
TOTAL

1.00
0.10

0.40

0.30

0.05

0.05

0.15
0.15

0
4

0
0.60

1
0

0.15
0

0.15

0.45

0.06
0.04
0.15
0.05

2
3
0
1

0.12
0.12
0
0.05

0
0
1
2

0
0
0.15
0.10

0.15

0.30

0.45

1.00

4.10

3.40

Prepared By: Muhammad Yasir

Action Plan:
Market Penetration total attractiveness score is 4.10 and alternate 2 is
3.40
Market development and Market Penetration is a strategy that PepsiCo
should apply by expanding in countries that not already established.
Use forward integration to acquire smaller companies in foreign
markets to increase their market share.
Product development and related diversification should also be
considered while trying to produce and distribute healthier products

Prepared By: Muhammad Yasir

DIVISION OF WORK
1. KHALID IQBAL(INTRODUCTION, IFE & EFE)
2. SARMAD MALIK (CPM & SWOT MATRIX)
3. MUHAMMAD YASIR (BCG & IE MATRIX)
4. MUHAMMAD USMAN (SPACE, GRAND MATRIX)
5. ZAIN AHMED KHAN (Q.S.P.MATRIX)