Case Study Solution The Pepsicompany and Iys Solution Semester Weekend

CASE STUDY: PEPSICO.
Pepsi Co. evaluate that in Pakistan they have very strong brand loyalty, they have
strong financial condition, they also have latest technology available in their
department and all departments are united to perform work effectively. But in the
category of snacks they do not have much experience. There are several ethical and
religious issues related with their snacks, they dont have huge work force but the
positive thing is that they have the capability to produce on larger scale and backing
of PepsiCo.
Moreover the company also evaluates that for both of their SBUs operating in
Pakistan market is not declining and there is a continuous increase in the quarterly
sales of their SBUs. According to the accounts and finance departments the
strategist got the following data:
SBU
Beverage
Snack
Sales of 2014
100,000,000
5,000,000
Competitors
Sales of 2013
90,000,000
4,500,000
Sales of 2014
90,000,000
3,000,000
9,000,000
Coca Cola
Pakola
Kolsan Slanty
Q1: Develop proposed mission and vision of PepsiCo. with their evaluation matrix
Q2: Develop IFE and EFE for both SBUs of PepsiCo. separately and write their
conclusion
Q3: Develop CPM matrix for both SBUs of PepsiCo. separately and write proper
conclusion
Q4: Make TOWS matrix for both the SBUs of PepsiCo. separately and identify
strategies and give them proper name
Q5: Make BCG matrix for both SBUs of PepsiCo. and write proper conclusion
Q6: Make IE matrix for both the SBUs of PepsiCo. and write proper conclusion
Q7: Make QSPM matrix in order to identify the best strategy or strategies which must
be implemented in both SBUs of PepsiCo. (Hint: use strategies from TOWS matrix
for the purpose of evaluating them through QSPM)
Q8: Make Space matrix for both the SBUs of PepsiCo. and write proper conclusion
Page 1
M/S PEPSICO. PAKISTAN

QUESTION NO. 2
SBU BEVERAGES
INTERNAL FACTOR EVALUTION MATRIX
SR. NO.
1
2
3
4
5
6
7
8
9
Total
FACTORS
WEIGHT
Strengths
Strong brand loyalty
0.27
Strong financial condition
0.22
Latest technology in all departments
0.15
Successful marketing and advertising
0.10
Unity within departments for greater
0.06
effectiveness
Weaknesses
Decline in taste
0.06
Low pricing as compared to competitors
0.05
Weak brand awareness among customers
0.05
Targeting only young consumers in
0.04
advertisements
1
RATE
SCORE
4
4
4
4
3
1.08
0.88
0.60
0.40
0.18
2
2
2
1
0.12
0.10
0.10
0.04
3.50
Conclusion
Since the total weighted score of Beverage SBU of M/S PEPSICO. PAKISTAN is
found to be 3.50 out of 4, thats why SBU is progressive in maintaining its internal
factors.
Page 2

SBU SNACKS
INTERNAL FACTOR EVALUTION MATRIX
SR. NO.
1
2
3
4
5
6
Total
FACTORS
WEIGHT
Strengths
Capability to produce on larger scale
0.20
Backing of PepsiCo.
0.15
Weaknesses
Religious issues related to production
0.25
Ethical issues related to production
0.20
Not experienced working force as compared
0.10
to competitors
Dont have enough work force
0.10
1
RATE
SCORE
4
4
0.80
0.60
2
2
1
0.50
0.40
0.10
0.20
2.60
Conclusion
Since the total weighted score of Snacks SBU of M/S PEPSICO. PAKISTAN is found
to be 2.60 out of 4, thats why SBU is average in maintaining its internal factors.
Page 3

SBU BEVERAGES
EXTERNAL FACTOR EVALUTION MATRIX
SR. NO.
1
2
3
4
5
6
7
8
Total
FACTORS
WEIGHT
Opportunities
Mass marketing & advertising to increase
0.25
level of awareness
Horizontal Integration over Pakola or
0.15
Gourmet
Producing beverages in Pakistan themselves
0.07
Launching new brands of SKUs
0.03
Threats
Law & Order situation of Pakistan
0.25
Health conscious people avoiding the
0.17
beverage
Decrease in Brand loyalty in Pakistan
0.06
Decrease in buying power of consumers
0.02
1
RATE
SCORE
1.00
0.45
4
4
0.28
0.12
4
3
1.00
0.51
3
2
0.18
0.04
3.58
Conclusion
Since the total weighted score of Beverage SBU of M/S PEPSICO. PAKISTAN is
found to be 3.58 out of 4, thats why SBU is progressive in maintaining its external
factors.
Page 4

SBU SNACKS
EXTERNAL FACTOR EVALUTION MATRIX
SR. NO.
1
2
3
4
5
6
7
8
Total
FACTORS
Opportunities
Launching of new brands & SKUs
Mass marketing & advertising to deal
effectively with religious & ethical issues
Increase sales by upselling & cross selling
Enhancement in trade promotion
Threats
Continuous de-marketing of brand
Law & order situation of Pakistan
Continuous religious concerns in Pakistan
Competitors policies & strategies
WEIGHT
RATE
SCORE
0.25
0.15
4
3
1.00
0.45
0.05
0.05
4
3
0.20
0.15
0.23
0.16
0.08
0.03
1
3
3
2
3
0.69
0.48
0.16
0.09
3.22
Conclusion
Since the total weighted score of Snacks SBU of M/S PEPSICO. PAKISTAN is found
to be 3.22 out of 4, thats why SBU is above average in maintaining its external
factors.
Page 5
QUESTION NO. 3
SBU BEVERAGES
COMPETITIVE PROFILE MATRIX
Sr.
No.
Critical Success
Factors
Weight
Marketing &
Advertising
Availability of
Finance
Consumer Loyalty
Market Share
Product Quality
Brand Reputation
Successful
Product
Promotions
Price
Competitiveness
Product Range
Geographical
Expansion
2
3
4
5
6
7
8
9
10
PEPSI
COCA COLA
PAKOLA
Rate
Score
Rate
Score
Rate
Score
0.20
0.80
0.80
0.40
0.20
0.80
0.80
0.60
0.15
0.13
0.10
0.08
0.05
4
4
3
4
4
0.60
0.52
0.30
0.32
0.20
4
3
4
4
4
0.60
0.39
0.40
0.32
0.20
3
2
2
3
3
0.45
0.26
0.20
0.24
0.15
0.04
0.16
0.12
0.16
0.03
0.02
4
4
0.12
0.08
4
4
0.12
0.08
2
3
0.06
0.06
3.90
3.83
2.58
Conclusion
Since the total weighted score of SBU Beverages for M/S PEPSICO. PAKISTAN is
3.90 out of 4, which is more than M/S COCA COLA and M/S PAKOLA, but that does
not mean that PepsiCo. is better than Coca Cola and Pakola, it only means that
PepsiCo. is emphasizing more on its critical success factor as compared to Coca
Cola and Pakola.
Page 6

SBU SNACKS
COMPETITIVE PROFILE MATRIX
Sr.
No.
1
2
3
4
5
6
7
8
9
Critical Success
Factors
Marketing &
Advertising
Availability of
Finance
Consumer Loyalty
Market Share
Product Quality
Brand Reputation
Successful Product
Promotions
Price
Competitiveness
Product Variety
Weight
PEPSI (LAYS)
KOLSAN
(SLANTY)
Rate
Score
SNACKCITY
(KURLEEZ)
Rate
Score
Rate
Score
0.20
0.80
0.60
0.60
0.17
0.68
0.68
0.68
0.15
0.13
0.10
0.10
0.05
3
3
4
4
4
0.45
0.39
0.40
0.40
0.20
4
4
4
4
3
0.60
0.52
0.40
0.40
0.15
3
3
4
4
3
0.45
0.39
0.40
0.40
0.15
0.05
0.10
0.20
0.15
0.05
1
0.20
3.62
0.15
3.70
0.20
3.42
Conclusion
Since the total weighted score of SBU Snacks for M/S KOLSAN (SLANTY) is 3.70
out of 4, which is more than M/S PEPSI (LAYS) and M/S SNACKCITY (KURLEEZ),
but that does not mean that Kolsan (Slanty) is better than Pepsi (Lays) and
Snackcity (Kurleez), it only means that Kolsan (Slanty) is emphasizing more on its
critical success factor as compared to Pepsi (Lays) and Snackcity (Kurleez).
Page 7
QUESTION NO. 5
SBU BEVERAGES
TOWS MATRIX
STRENGTHS
1) Strong brand loyalty
INTERNAL
2) Strong financial condition
3) Latest technology in all
FACTORS
departments
4) Successful marketing and
advertising
EXTERNAL
5) Unity within departments
FACTORS
for greater effectiveness
OPPORTUNITIES
SO Strategies
1) Mass
marketing
& Use strong financial condition for
advertising to increase horizontal integration over Pakola
level of awareness
or Gourmet (S1 , O2)
2) Horizontal
Integration Strategy: Horizontal Integration
over Pakola or Gourmet
3) Producing beverages in Use successful marketing and
Pakistan themselves
advertising to increase level of
4) Launching new brands awareness (S4 , O1)
of SKUs
Strategy: Product Development
1)
2)
3)
4)
WEAKNESSES
1) Decline in taste
2) Low pricing as compared
to competitors
3) Weak brand awareness
among customers
4) Targeting
only
young
consumers
in
advertisements
WO Strategies
Launch new brands of SKUs to
overcome
low
pricing
as
compared to competitors (W2 ,
O4)
Strategy: Conglomerate
Diversification
Mass marketing & advertising to

increase level of awareness to
overcome targeting only young
consumers (W4 , O1)
Strategy: Market Penetration
THREATS
ST Strategies
WT Strategies
Law & Order situation of Use strong financial condition to Improve taste in order to avoid
Pakistan
overcome decrease in buying decrease in brand loyalty in
Health conscious people power of consumers (S2 , T4)
Pakistan (W1 , T3)
avoiding the beverage
Decrease
in
Brand
loyalty in Pakistan
Use successful marketing and Increase
brand
awareness
Decrease
in
buying advertising to overcome decrease among customers to cope up
power of consumers
in brand loyalty in Pakistan (S4 , with health conscious people
T3)
avoiding the beverage (W3 , T2)
Strategy: Market Development
Preferred Strategy
According to strategist, the preferred strategies from the matrix are Product
Development and Market Development
Page 8

SBU SNACKS
TOWS MATRIX
INTERNAL
FACTORS
EXTERNAL
FACTORS
1)
2)
3)
4)
OPPORTUNITIES
Launching
of
new
brands & SKUs
Mass
marketing
&
advertising
to
deal
effectively with religious
& ethical issues
Increase
sales
by
upselling & cross selling
Enhancement in trade
promotion
THREATS
1) Continuous
demarketing of brand
2) Law & order situation of
Pakistan
3) Continuous
religious
concerns in Pakistan
4) Competitors policies &
strategies
STRENGTHS
1) Capability to produce on
larger scale
2) Backing of PepsiCo.
WEAKNESSES
1) Religious issues related to
production
2) Ethical issues related to
production
3) Not experienced working
force as compared to
competitors
4) Dont have enough work
force
SO Strategies
WO Strategies
Use backing of PepsiCo. to Mass marketing & advertising to
launch new brands & SKUs
avoid religious & ethical issues
(S2 , O1)
(W1 , W2 , O2)
Conglomerate Diversification
Enhancement in trade promotion
Use capability to produce on by increasing enough work force
larger scale to increase sales by (W4 , O4)
upselling & cross selling (S1 , O3) Strategy: Product Development
Forward Integration
ST Strategies
WT Strategies
Use backing of PepsiCo. to Improve religious & ethical issues
overcome
continuous
de- related to production to face
marketing of brand (S2 , T1)
continuous
de-marketing
of
Strategy: Market Development
brand (W1 , W2 , T1)
Use backing of PepsiCo. to
overcome competitors policies & Increase work force to avoid
strategies (S2 , T4)
competitors policies & strategies
Strategy: Product Development (W4 , T4)
Preferred Strategy
Development and Market Penetration
Page 9
QUESTION NO. 6
SBU BEVERAGES
BCG MATRIX
RMS =
100,000,000
90,000,000
= 1.11
SGR =
100,000,000 90,000,000
90,000,000
= 0.11
1
Related Market Share

0.5
20
Sales Growth
Rate
(1.11, 0.11)
20
Page
10
Conclusion
Since the RMS of SBU Beverages of PepsiCo. is 1.11 and SGR of SBU Beverages
of PepsiCo. is 0.11, thats why SBU Beverages is in quadrant 2 of BCG matrix and
selected strategies which we can pursue are Market Penetration, Product
Development, Market Development, Concentric Diversification, Horizontal
Diversification, Backward Integration and Forward Integration
Preferred Strategy
Development, Market Development and Market Penetration
Page
11

SBU SNACKS
BCG MATRIX
RMS =
5,000,000
9,000,000
= 0.56
SGR =
5,000,000 4,500,000
4,500,000
= 0.11
= 0.11
Related Market Share
1
0.5
20
Sal
es
Gr
ow
th
Sh 0
are
(0.56, 0.11)
20
Page
12
Conclusion
Since the RMS of SBU Snacks of PepsiCo. is 0.56 and SGR of SBU Beverages of
PepsiCo. is 0.11, thats why SBU Beverages is in quadrant 2 of BCG matrix and
selected strategies which we can pursue are Market Penetration, Product
Development, Market Development, Concentric Diversification, Horizontal
Diversification, Backward Integration and Forward Integration
Preferred Strategy
Page
13
QUESTION NO. 7
SBU BEVERAGES
INTERNAL EXTERNAL MATRIX
IFE SCORE
4
STRONG
AVERAGE
WEAK
HIGH
(3.50, 3.58)
3
MEDIUM
E
F
E
S
C
O
R
E
LOW
Conclusion
Since the total weighted score of IFE of SBU Beverages of M/S PEPSICO.
PAKISTAN is 3.50 and total weighted score of EFE of SBU Beverages of M/S
PEPSICO. PAKISTAN is 3.58, thats why SBU lies in 1st cell of IE matrix which
indicates Grow & Build strategy the strategies which can pursue are Backward
Integration, Forward Integration, Horizontal Integration, Market Penetration,
Market Development and Product Development
Preferred Strategy
Page
14

SBU SNACKS
INTERNAL EXTERNAL MATRIX
IFE SCORE
4
STRONG
AVERAGE
WEAK
HIGH
(2.60, 3.22)
3
MEDIUM
EF
E
2
S
C
O
LOW
R
E
1
Conclusion
Since the total weighted score of IFE of SBU Beverages of M/S PEPSICO.
PAKISTAN is 2.60 and total weighted score of EFE of SBU Beverages of M/S
PEPSICO. PAKISTAN is 3.22, thats why SBU lies in 2nd cell of IE matrix which
indicates Grow & Build strategy the strategies which can pursue are Backward
Market Development and Product Development
Preferred Strategy
Page
15
QUESTION NO. 8
SBU BEVERAGES
SPACE MATRIX
INTERNAL STRATEGIC POSITION
Competitive Advantage (CA)
-1 Market Share
-1 Brand Image
-2 Customer Loyalty
-3 Control Over Suppliers
-2 Technological know-how
Average: -1.8
Financial Stability (FS)
+5 Working Capital
+5 Return on Investment
+4 Leverage
+6 Net Income
+4 Inventory Turnover
Average: +4.8
EXTERNAL STRATEGIC POSITION
Industry Stability (IS)
+5 Growth Potential
+6 Ease of Entry
+6 Profit Margin
+5 Financial Stability
+4 Resource utilization
Average: +5.2
Environmental Stability (ES)
-2 Inflation Rates
-1 Technological Change
-2 Barriers to Entry
-3 Demand Variability
-4 Competitive Pressure
Average: -2.4
Calculation on X- axis (CA , IS)
Calculation on X- axis = IS + (-CA)
= 5.3 + (- 1.8)
= +3.40
Page
16
Calculation on Y- axis (FS , ES)

Calculation on X- axis = FS + (-ES)
= 4.8 + (-2.4)
= +2.40
FP
+4
+3
(+3.40, +2.40)
+2
+1
CA
IS
-4
-3
-2
+1
-1
+2
+3
+4
-1
-2
-3
-4
ES
Conclusion: Since the X-axis score of SBU Beverages of M/S PEPSICO.

PAKISTAN is +3.40 and Y-axis score of SBU Beverages of M/S PEPSICO.
PAKISTAN is +2.40, thats why SBU lies in 1st quadrant of SPACE matrix which
indicates Aggressive strategy the strategies which can pursue are Backward
Market Development, Product Development, Concentric Diversification and
Conglomerate Diversification
Preferred Strategy: According to strategist, the preferred strategies from the matrix
are Product Development, Market Development and Market Penetration
Page
17

SBU SNACKS
SPACE MATRIX
INTERNAL STRATEGIC POSITION
Competitive Advantage (CA)
-4 Market Share
-3 Brand Image
-3 Customer Loyalty
-2 Control Over Suppliers
-2 Technological know-how
Average: -2.80
Financial Stability (FS)
+4 Working Capital
+3 Return on Investment
+2 Leverage
+3 Net Income
+3 Inventory Turnover
Average: +3.00
EXTERNAL STRATEGIC POSITION
Industry Stability (IS)
+4 Growth Potential
+5 Ease of Entry
+3 Profit Margin
+3 Financial Stability
+3 Resource utilization
Average: +3.60
Environmental Stability (ES)
-3 Inflation Rates
-3 Technological Change
-3 Barriers to Entry
-5 Demand Variability
-6 Competitive Pressure
Average: -4.00
Calculation on X- axis (CA , IS)
Calculation on X- axis = IS + (-CA)
= 3.60 + (- 2.80)
= +0.8
Page
18
Calculation on Y- axis (FS , ES)

Calculation on X- axis = FS + (-ES)
= 3.00 + (-4.00)
= -1.00
FP
+4
+3
+2
+1
CA
IS
-4
-3
-2
+1
-1
-1
+2
+3
+4
(+0.80, -1.00)
-2
-3
-4
ES
Conclusion
Since the X-axis score of SBU Snacks of M/S PEPSICO. PAKISTAN is +0.80 and Yaxis score of SBU Snacks of M/S PEPSICO. PAKISTAN is -1.00, thats why SBU lies
in 1st quadrant of SPACE matrix which indicates Aggressive strategy the strategies
which can pursue are Backward Integration, Forward Integration, Horizontal
Integration, Market Penetration, Market Development and Product
Development
Preferred Strategy
Page
19

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Case Study Solution The Pepsicompany and Iys Solution Semester Weekend

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CASE STUDY: PEPSICO.

M/S PEPSICO. PAKISTAN

M/S PEPSICO. PAKISTAN

M/S PEPSICO. PAKISTAN

M/S PEPSICO. PAKISTAN

M/S PEPSICO. PAKISTAN

Mass marketing & advertising to

M/S PEPSICO. PAKISTAN

Related Market Share

M/S PEPSICO. PAKISTAN

M/S PEPSICO. PAKISTAN

Calculation on Y- axis (FS , ES)

Conclusion: Since the X-axis score of SBU Beverages of M/S PEPSICO.

M/S PEPSICO. PAKISTAN

Calculation on Y- axis (FS , ES)

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