Pepsi is a popular refreshment brand to consumers for about more than 100 years. It is the most popular and preferred FMCG brand across the globe. The company has its operations in New York but is present all over the world.
It is popular for its carbonated drink called Pepsi. But Pepsi does not have a vast product portfolio and mostly targets the youths. In the United States and Canada, the Pepsi brands include Pepsi, Sierra Mist, Mountain Dew, Sobe, IZZE, AMP Energy, Propel, Aquafina, Mug, and many more. The company also produces and markets its ready-to-drink iced teas and coffees through its joint projects with Starbucks and Lipton.
From the company’s start about a century ago, this brand has been one of the most loved products across the globe. Currently, the company brings out new products, new packages, and new flavors in various sizes and shapes to meet the demand of the consumers for suitability and healthy choice.
Pepsi is always on the look for various methods to make sure their consumers get the products uniquely what they require when they require it, and where they require it.
The SWOT analysis of Pepsi differentiates all the main strengths, weaknesses, opportunities, and threats that give control to the company to go for further. Go through this article, to get an understanding of where Pepsi stands.
Before we discuss the SWOT analysis of Pepsi, let us take a few pointers on its background.
The following points provide you a bit of Pepsi’s background:
- The company is known with the name PepsiCo Inc.
- Pepsi was established during the year 1898 and is headquartered in New York, United States.
- The company logo is shown in Image 1.
- The various industries served by the company are the following:
- Beverages – Mountain Dew, Pepsi, Sierra Mist, and Gatorade
- Food – Quaker Oats, Rold Gold
- Snack – Cheetos, Doritos, Lay’s
The SWOT analysis of Pepsi highlights the strengths that the company and its weaknesses so that it can work on it more. It also mentions the various opportunity that it can take up to grow more and the potential threat that the business can face over the years.
To make sure that Pepsi meets the long-term competitive advantage it must address the various concerns highlighted in the SWOT analysis of Pepsi.
Let us discuss on the SWOT analysis of Pepsi.
Strengths in the SWOT Analysis of Pepsi
- Huge Portfolio – Pepsi has a great portfolio of about 100 various brands. The brand dominates the industries of food, snack, and beverage. With regards to the revenue, PepsiCo is next to Nestle. Due to owning many brands, it has achieved so much. During the year 2017, almost 22 out of its 100 various brands has got Pepsi a revenue of about $1 billion USD. The other brands have got the company about $500 million USD in revenue. Pepsi’s popular are the following:
Even though the brands belong to the food industry, no other company provides so much flexibility as the Pepsi brand. Customers can get even a little of the whole thing. This is the reason that the customers are satisfied with the brand.
The various available Pepsi brands suit for all the customers when the customer requires sweeter beverage, they can choose Lipton, if they do not want Pepsi, they can choose 7UP. When the customers require a healthier version of a snack, they can go in for Quaker products. This is a major strength of the brand where it provides various options to its customers.
- Brand Recognition – The brand owns many popular beverages, food, and snack brands and due to this, Pepsi has changed into a globally recognizable brand. Every brand is worth billions of dollars. This is a big strength of the brand.
- Endorsements and Sponsorships – Pepsi makes use of the brand endorsements to get its products acknowledged. Pepsi is tied up to various music concerts and many sporting events. Many sports teams in the world are presently sponsored by Pepsi products. This makes the brand to be reachable to younger audiences that would be the potential target market for Pepsi.
- Customer Loyalty – Pepsi has a strong and loyal customer base. The brand’s soft drinks have a branded taste, and this is the reason for customers to stick on to this brand. Pepsi has developed to a very strong brand with regards to bottled water group and juices.
- Strong Distribution of its products – Pepsi has a global presence and its products are being sold in almost all the countries. The brand has a strong distribution network as it is being sold in about 200 countries.
Weaknesses in the SWOT Analysis of Pepsi
- Coca-Cola Competition – Coca-Cola’s product has always been a strong competitor for Pepsi and in most cases, these two brands compete. There is a little chance for other companies to enter. This is a weakness for the brand as the customer base would reduce and would reflect on their profit.
- Health Concerns – Coca-Cola faces a lot of issues in the health community. Most of its products contain high calories and sugar. The beverages have soda that is related to obesity rates and has is related to various health factors like Type 2 diabetes. Even though Pepsi has manufactured many products that are health-conscious like Pepsi zero, diet Pepsi, more often the unhealthy food products are pushed to the market. This is a weakness for the brand to scale up to more as they would lose the customer base.
- Products only in One Domain – Pepsi almost provides 100 brands products, but these all cater to only the food industry. It is indeed a smart business strategy to produce products related to one domain. It is a weakness for the brand as the competitors will outperform them.
- Failed Product – There are many failed products in the list of Pepsi’s products. These failed products could damage the company’s brand image and it would be an issue for the brand.
Opportunities in the SWOT Analysis of Pepsi
- Entering Production of Health Products – Currently, Pepsi does not produce healthy products. It does not mean that they cannot do it. The company would gain more opportunities to work on many healthy products. This way the brand can diversify itself in the food industry. The brand can come out with find out innovative ways as to how to replace the existing products with few ingredients that are healthy. For example, for sugar, they can include sugar replacement. This way the brand is bound to get more opportunities to serve the market.
- Enter Other Domains – Pepsi is a popular brand and it always serves the food and beverage industry alone. The brand should move out of this industry and try to produce more products in other domains. Brand flourish through diversity. Pepsi would see more opportunities when they make progress in other industries that their competitors are not into.
- More Drink Flavors – Strangely, Pepsi does not focus more on flavors of the drink. The original flavor has an iconic taste. Also, there are various versions of this flavor. A few of them are Pepsi Blue and Pepsi Wild Cherry. But these variations have slight changes to the original taste. It may be valuable for the brand to get more flavors into their drink like banana, strawberry, manage, etc.
Threats in the SWOT Analysis of Pepsi
- Legal Threats – Various legal and regulatory threats have a big threat to the business. Various compliance risks would result in fines and eventually lead to losses. Big companies should focus more on compliance and have designated teams for this to take care of issues related to legal and regulatory. Non-compliance can cause a huge amount of loss for the business.
- Fluctuation in Foreign Currency – A strong fluctuation in the dollar and foreign currency would hit Pepsi’s business. This has become a major threat to the brand.
- Economic Slowdown – The company sees a dip when there are any reforms in the country. This is indeed a threat to the brand as it would hit its sales. Few other factors like recession, price increase, global issues would also hit the brand’s sales.
The SWOT analysis of Pepsi mentioned in this article has highlighted the main strengths of brand that comes up from its huge portfolio, brand awareness, endorsement, sponsorships, customer loyalty, and its strong distribution network. Its weakness where the brand should focus more is to compete against its rival, Coca-Cola, products produced are not healthy, products produced only in one domain, and many of its failed products. The opportunities of the brand are seen while venturing into more healthy products for healthy-concerned people, venturing into products from other domains apart from food and beverage, and adding more products with various flavors. The brand sees a threat from its competitors, legal and regulatory issues, fluctuation in foreign currency, and economic slowdown.