Currently, the second largest beverage manufacturing firm, Pepsi stands tall with a revenue of $16.09 Billion. In a soda market which has become more or less saturated, Pepsi tried different changes in its business models to reach up to the top.
In this SWOT Analysis, shows that why Pepsi is positioned to grow and reach the top of the food and beverage industry.
SWOT Analysis of Pepsi
Strengths describe the factors that which the organization is good at and what separates it from its competitors. To understand the SWOT Analysis of Pepsi we need to look at the factors which are its biggest strengths.
–Strong Brand Image: Pepsi has a strong brand image and brand recall and these factors have helped the brand maintain constant pressure on its competitors. Pepsi also invests heavily on advertising and marketing that supplements in strengthening the brand image and brand awareness.
–Loyal Customer Base: Pepsi has a huge loyal customer base. Pepsi is the first and only choice of the consumers who like its taste.
— Global Presence and Strong Supply chain and Distribution Network: Over all these years of its existence, Pepsi has managed to build a robust network of Supply chain and Distribution Network.
Present in over 200+ countries, it’s just because of the strong supply chain and distribution network that you can get Pepsi even at the most remote places of the world.
–Strong Product Portfolio: Pepsi owns and distributes a wide range of products brands. Unlike Coca-Cola which is still a beverage company, Pepsi diversified its product portfolio and merged with Frito-Lay and owns Quaker Oats, Tostitos, and other food brands.
Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive. SWOT analysis of Pepsi covers different weaknesses which the brand has.
–Reliance on Carbonated drinks: In developed as well as developing countries, health-conscious consumers have started to shy away from carbonated beverages containing elevated levels of sugars or artificial sweeteners. All these factors have muted the growth of the beverage industry. High dependency on sweet carbonated drinks is what is impacting the top line of Pepsi and would need an immediate course correction.
–Weak Product portfolio containing healthy beverages and foods: Consumer needs and demands are changing and shifting towards healthy beverages (sports drinks) and foods. Understanding this shift, Pepsi has slowly and steadily started introducing new healthy products in its product line, Gatorade and Tropicana sub-brands which Pepsi introduced as healthy beverages, Pepsi also acquired Quaker Oats with an aim to provide healthy snack options to the customers.
Having said that, Pepsi still has a long way to go in promoting these healthy alternatives and create strong brand recall among customers.
Threats refer to factors that have the potential to harm an organization in the future. Given the fact, threats give a brand a far-sighted view about the problems that the brand is likely to face in the future, it is one of the most important factors in the SWOT Analysis of Pepsi.
— Reducing consumer need/demand for carbonated drinks: With changing time, consumers are giving up sweetened carbonated drinks and are moving towards health and energy drinks. This change is demand is likely to impact the sales of Pepsi as their major chunks of sales come in from carbonated drinks.
— Heavy Competition from Global and Local players: It’s not just Coca-Cola that Pepsi gets competition from, there are no. of local beverage manufacturers that are trying to eat away the market share of Coca-Cola. Companies such as Starbucks and Dunkin’ Brands Group which are not a direct competition of Pepsi, but have managed to place a dent in the company’s market share.
— Weak Product portfolio: To meet the changing customer needs, Pepsi has introduced products/brands that are aimed at meeting the customer needs. The need of the hour is to advertise and market it aggressively so as to create brand awareness and brand recall.
This one point is the brand’s, weakness, threat, and its biggest opportunity – It all depends on how it decides to mold it.
Check out the Marketing Mix of Pepsi
Opportunities refer to the factors which the organization can use to its favor to grow its market share, sales, brand recognition etc. It’s the second most important factor in SWOT Analysis of Pepsi as it will shape the future of the company’s strategy.
–Increasing demand for healthy drinks: The demand for healthy drinks and foods is still at its nascent stage and is growing exponentially, the need of the hour is to capitalize on this opportunity and grab the maximum market share.
Introduce products to the consumers, market them to create awareness and brand recall, it’s a chance that no brand can afford to lose.
–Partnerships: Pepsi can look into increasing the market share by partnering with other non-competing brands, one such example is Coca-Cola had a strong partnership with Domino’s . So something of the same sorts can be looked into to increase the sales and market share.
While the number of challenges facing Pepsi is abundant, this company posses a great deal of promise for the future. The company holds a strong brand equity and loyalty, it’s just the opportunities that it needs to play on to outdo its competitors.
This Concludes the SWOT analysis of Pepsi.
Learn more about the BCG Matrix of Pepsi
Check out the BCG Matrix of Coca Cola
Check out the SWOT Analysis of Coca Cola