Major Problem in PepsiCo 2025
Student’s Name
Institutional Affiliation
PepsiCo is a multinational company that was initially established in America. Its headquarters are based in New York, PepsiCo, and it is the second-largest carbonated soft-drink producer behind the Coca-Cola Company globally. The company has a vision of performing with purpose and a mission of providing its customers with enjoyable, convenient, affordable, and corresponding foods, appetizers, and beverages day and night globally. In North America, the company is the biggest food and beverage producer. The company has stiff competitions from other company where its big competitor is the Coca-Cola Company and Dr. Pepper Snapple (Zhang, 2019). The organization operates in over 200 countries in the contemporary world.
The company produces wide brands of products such as diet Pepsi, Mountain Dew, Aquafina, Quaker foods, among others present in the international markets (Zim & Zham, 2019. The company is characterized by competent management and leadership as well as the vision of expanding globally. Numerous factors have contributed to the success and expansion of the company beyond to international levels, such as advancement in technology and the dedication and cooperation of the employees (Zim & Zham, 2019). The management of the organization understands its primary roles of planning, organizing, leading, and controlling. The technology makes it easy for the company to advertise its products to all corners of the world through social media platforms. The company’s stock switched to trade on the Nasdaq Global Select Marketplace rather than the New York Stock Exchange on December 20, 2017 (Zim & Zham, 2019). However, the company has raised its dividend over 41 following years. The company has reported problems just like any other functioning organization. In this paper, there is a comprehensive discussion of the significant issue, critical sub-problems, strategies to solve the problem, implementation of the design, and the control system of PepsiCo 2017.
Statement of Major Problem
The major problem affecting PepsiCo in 2017 is based on market development. Market penetration entails the situation where the company concentrates on entering a new market using the prevailing. It, therefore, entails the emphasis on increasing of new market and sells the existing products. Globalization has been eloquent, and it comes with numerous challenges and opportunities to the existing organizations. The advancement of technology and novelty has brought new solutions that help make life better (Zhang, 2019). This has numerous impacts on the development of business on the international platform. PepsiCo, a well-recognized beverage brand globally, has faced a challenge of market development. This is the main problem facing the company. The dream of all companies is to increase the number of customers to increase the number of sales of its products. This helps the company increase its profit, enabling it to survive despite the competition status in the market.
Market development is the major problem that PepsiCo is yet to find strategies to combat. The Coca-Cola Company and Dr. Pepper Snapple have been identified as the existing organizations challenging PepsiCo with stiff competition (Zhang, 2019). The Coca-Cola Company in specific has mastered the skill of developing markets for its finished products. This has helped the organization to remain the topmost organization. There have been mentionable efforts by PepsiCo to create markets which have not been successful as it ought to be. The company has made notable efforts to face the problem to remain and survive in the existing competitive international market. Some factors have hindered the process of market development in PepsiCo (Jallow, 2021). Identification of needs is the after that have interfered with the process of market development by PepsiCo. Identifying the target market is vital to be able to go ahead to sell their products.
The new climate of the investors is a challenge for the development of the market. The climate demanded top-line development and consistency in selling products, which was a bit challenging for PepsiCo (Zhang, 2019). Again, the market climate had changed where there is increased stiff competition from the national and international companies in the external environmental factors. In this, there are some areas where known companies have established their roots. A good example is the Coca-Cola products which are known and have existed in a specific marketplace. PepsiCo has a current strategy of bringing its products to the same markets, and winning customers has been challenging. This will cause problems for the company in terms of the external environmental factors and the company’s internal environment. Notably, the management is researching a lot and working hard to find a remedy for this challenge.
Alternative Strategies
The alternative strategy that can be implemented to combat market development is introducing existing products or services into newfangled geographical areas. The management has a role in identifying new geographic regions and then set the best strategy they will use to take the markets for their products (Animashaun, 2017). The company has to determine the most appropriate way to advertise their products to people in these new markets. The most suitable platform that has been used successfully to promote their products is the use of social media products. There is, therefore, a need for the management to identify the target age in the market. The target ages should be accessible via social media podiums such as Facebook, Instagram, Twitter, and others to ease advertisement. The advertisement should be accompanied by offers to the products to attract many customers in the new markets. The next step will involve supplying affordable products and services that serve all ranks of customers in the new markets. The management must ensure the supply of their products and services is done continuously in all its new markets in all seasons.
Advantages of Strategy 1
The strategy to be put in place is introducing existing goods or services into a newfangled geographical area. This entails the identification of new markets where PepsiCo will sell its products. This will be done by first identifying the new places, making advertisements for their products, and supplying their products to the new markets.
Advantages
- It will help the company to increase the number of sales hence increasing profit.
- It will help to improve innovative thinking. The need to survive in a competitive marketplace makes the stakeholders in the organization think more innovatively, and this is necessary for the growth of PepsiCo (Animashaun, 2017).
- It will also help the company to have better knowledge concerning the preference of their customers.
Disadvantages
- The strategy will require a lot of capital for expansion, which will incur a lot of costs. This is capital to advertise their products and build new markets and supply them to the new markets.
- The strategy is time-consuming. A lot of time is spent putting the strategy into effect.
- The strategy will also increase competition from other companies (Zhang, 2019).
Solution
The most appropriate solution for the challenge of market development is the use of social media platforms. The progressive advancement in technology has been turned the world into a global village. Therefore, the company should use social media podiums like Facebook to advertise all their brands and services. This enables them to reach a massive group of people, enabling them to establish and develop markets quickly.
Strategic Implementation and Control System/Feedback
Advertisement will be strategically implemented by linking with the management of the social media platforms to get the details for the people who have registered with the platforms. There will be a collaboration of the administration, marketing, R&D engineering, Accounting, HRM, Production, MIS, finance, and legal department (Chen et al., 2018). The management will have a fundamental role in ensuring that there is cooperation among all these departments. The marketing department will be responsible for advertising the products on social media. The R&D engineering will be responsible for proceeding with technical assistance that these departments might need. The HRM will have a duty of planning and monitoring the activities of the company as well as selection and recruitment duties (Animashaun, 2017). The production department will have an obligation to assess the market’s climate and produce products that fit the need. The management Information System (MIS) will be responsible for improving decision-making in implementing the strategy. The finance department will help in financing the process of advertisement. Lastly, the legal department will be responsible for all legal-related external matters such as investigations.
I will monitor the implementation of the strategy by simply assessing the climate of the market and the outputs. I will know that it is working if there will be continuous demand and consumption of the PepsiCo products and an increase in profit. In case the implementation is not working, the option will be an introduction of another strategy. There will be an allocation of a particular amount of attainable work to all the functional areas on where they best fit in. Again, there will be progressive support of these functional areas in their service line to help them attain the set objectives. There will also be continuous assessment of the progress of the departments.
What the Company Did
The company’s stock switched to trade on the Nasdaq Global Select Marketplace rather than the New York Stock Exchange on December 20, 2017. The biggest marketplace section is North American Beverages (NAB), which entails flat incomes and declines in functioning returns (Animashaun, 2017). The gain produced by NAB decreased by 23%, while the segment is known to make the highest profit of 33% of the company’s whole revenue, evident in the company’s annual report. However, the company has set strategies to increase the supply of North American Beverages to increase profit.
Reference
Animashaun, O. S. (2017). An investigation of project management at PepsiCo Company (Doctoral dissertation, Тернопільський національний технічний університет ім. Івана Пулюя).
Chen, Y., Fritz, R. D., & Ferrini, L. (2018). Compliance assessment of US gluten‐free labeled oatmeal produced under a “Purity Protocol” indicates “Serving Level Compliance” not attained. Cereal Chemistry, 95(1), 92-93.
Jallow, D. (2021). A Strategic Case Study on PepsiCo. Available at SSRN 3828353.
Zim, Z. S., & Zahan, M. (2019). Local versus global brands: The internationalization process in Food and Beverage Industry. The Business & Management Review, 10(5), 58-66.
Zhang, Z. (2019). Risk Analysis of Two Leader Drink Company: PepsiCo and Coca-Cola. Asian Business Research, 4(3), 42.