Yesilyurt (2012, p.1) pointed out that the global expansion strategies of MNCs1 through export entry or investment entry are influenced by several prospect and challenges in the overseas markets while the selection of entry modes are subjective to the factors like market volume, production capacity, environmental hazards, transportation facilities, availability of raw materials, and cost of labor and so on. We’ve delivered safe water access to more than 44 million people in underserved communities since 2006, far surpassing our goal of 25 million people by 2025. During 2011, the MNCs jumped to the survival mode with continued cost saving and investment stops, but geared decentralized operation for local management where reasonable returns and resources are available with lower input cost, large market potentials for steady growth and urged to engage with selective approach taking into account of risk factors for new investment. And our ‘Sustainable from the Start’ program is providing our teams with tools to consider the environmental impact of their decisions throughout the innovation process, including an estimate of the carbon and water footprints of a product and the recyclability of its packaging. At PepsiCo, we have been working with our Foundation to offer immediate community relief where we can. That includes donating more than $60 million to support people impacted by COVID-19, providing 50 million meals, protective gear for healthcare workers, and other vital resources. Finally, we are aiming to inspire consumers and communities to make better choices and enable positive change. The current CEO of Pepsico is Indra Nooyi under whose leadership, the brand has continued to expand its business and transform its product portfolio. According to the annual report 2011, this brand has experienced excessive competition from the market leader in the beverage industry known as Coca Cola since it is global brand, which has long product lines. This research paper on PepsiCo Inc.’s Global Expansion Strategy was written and submitted by your fellow student. Actually the Russian entry of the Pepsi did not evidenced any success of counter-trade until the PepsiCo acquired Monsieur Henri, the wine and sprit distribution channel of the country and it provided incredible dilemmas are laid behind the counter-trade transactions and demonstrated the washed out of academic interest for counter-trade. On the other hand, the marketers of this company invests researched on the global market position to assess the perception of the consumers to meet the demand of the local consumers; as a result, the researchers suggest the company to invest more for the development of beverage segment specially Pepsi, 7up, Mirinda (PepsiCo 2011, p.7). According to the report of Angelkov, Black & Green (2003), it has problem to distribute its products in the rural area where the competitors like Coca cola has strong presence. July 31, 2020. https://ivypanda.com/essays/pepsico-incs-global-expansion-strategy/. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Because of the fact that a great amount of fund is required to advertise the cola through large media like TV every year, there is a drive in the companies like Pepsi to choose online advertising mediums to build the image of the product through the integrated campaign and develop public awareness in a relatively less expensive method. PepsiCo is proud to make pay equity a centerpiece of our diversity agenda. Over the last few years, we’ve made important progress toward this goal. There’s no question that climate change is one of the defining issues of our day. As delivery or placement is vital feature for gaining better performance in the market, the players require strong supply chain so that the placement activity is carried out fruitfully; moreover, in this pace of globalization and quickly budding market of colas, it is essential for businesses like Pepsi cola to look forward to have superior bottlers. On the other hand, rules, and regulation of different countries, frequent change of demand of the consumers, match. Web. According to the annual report 2011 of PepsiCo, sponsors of different cricket teams, football teams and other games can be increased market demand of this brand. (2012). On the other hand, some MNCs prefer to engage with overseas market through the contractual entry mode, which is a long-standing non-equity collaboration among the global companies in the target market by transferring technology and know how through licensing arrangement for a certain period in exchange of royalty and other handsome compensation package those are agreed mutually. Total global volumes taken from GlobalData’s Global Packaged Water Report 2018, compared with SodaStream company information. (2012). Minges said she stays very connected to the marketplace and the needs. The company’s products reach the market through the following three channels: direct store delivery (or DSD), customer warehouse, and third-party distributor networks. July 31, 2020. https://ivypanda.com/essays/pepsico-incs-global-expansion-strategy/. As part of our efforts to become Better, we were proud to sign the Business Roundtable’s 2019 Statement on the Purpose of a Corporation. With the help of partners and the leadership of our first-ever Chief Sustainability Officer, Simon Lowden, we will look to build on the tremendous progress we’ve made and double down on our efforts in the months and years ahead. It is important to clarify precisely what is meant by such wording because the strategic implications are completely different. We announced that we are shifting to 100% renewable electricity through a range of solutions for direct operations in our largest market, the United States, building on progress we’ve made elsewhere around the world. Mintel News For the latest in consumer and industry news, top trends and market perspectives, stay tuned to Mintel News featuring commentary from Mintel's team of global category analysts. And on our more than 230 Demonstration Farms, we’re testing and measuring local techniques and solutions, and then hosting Innovation Days for peer-to-peer learning with neighboring farmers. Agarwal & Ramaswami (1992, p.3) added that the literature of international trade has identified the entry mode of the overseas market as a most significant and complex procedure for successful engagement in the target market whether it turned for direct exporting through multi channel, particular licensing, joint venture with a strong counterpart or sole venture with a single company. It has caused unfathomable grief and taxed our social infrastructure like nothing before, revealing hidden societal pain points, reopening old wounds, and creating fresh ones. Through our Sustainable Farming Program, we work with more than 40,000 farmers around the world providing training and techniques like efficient fertilizer- and water-use, helping them increase productivity and resiliency, as well as support for workers’ rights. The legal issues always remain a major concern for all beverage producers in the industry; this is because there are strict laws for governing the players in the industry; Pepsi, however, closely observes all the regulations of the different markets in order to avoid legal dilemmas or lawsuits and operate peacefully. (2003). 1 . Since Pepsi came out at a time when Coke or Coca Cola already had a head start in the market, its market strategy and business plan began with differentiation – an attempt to establish its product as one that is unique in taste and quality. In some ways the current pandemic is shining a spotlight on some vital truths, like the importance of heeding the advice of experts and following the science, as well as what can be accomplished when the global community rallies behind a critical issue. As a result, this global brand requires to afford a great amount of effort in adapting to those cultural contexts in its business areas and finally to operate in those markets with considerable success. Later the plan shifted to comparative marketing and later to diversific… Source: Self generated. According to the annual report 2011 of this company, market share, and position of Pepsi Cola in the global market is another strength point for this brand. The questionnaire has prepared with intent to get response regarding Pepsi Strategy from the target population (Management and employees of PepsiCo); however, this questionnaire has distributed to eighty staff and forty managers of Pepsi, but not all the respondents provide their views; here, subsequent table provides information about the interviewees –, Table 5: – Selected Respondents in order to interview. Upadhyay, S. (2007). Pepsi is introducing a new global tagline, ‘For The Love Of It’, as it brings the focus of its marketing back to the product and celebrates its music heritage. People and communities are the heart of PepsiCo’s business, and we are fortunate to be in a position to give back in this time of need. Pepsi is a global brand that sells across more than 200 countries and has a large product portfolio. But we know that systemic problems require systemic solutions, and the pandemic has brought into sharp focus the larger need to address our long-term sustainability challenges. PepsiCo Marketing, and Promotional Strategy in the Market. “From the way we grow our crops to the transport of our products and the coolers that display our brands, PepsiCo has already made significant progress in reducing greenhouse gas emissions throughout our value chain — but we know tackling climate change will require even more, and we can't lose sight of that.”, Simon LowdenFormer Chief Sustainability Officer. PepsiCo’s brands are enjoyed by consumers more than a billion times a day—they’re powerful drivers of culture with enormous global reach. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. 1. That means making agriculture more intelligent, inclusive, and gentler on the earth: That means replenishing the water we use locally, using water more efficiently, and helping ensure water security: We’re also accelerating our efforts to reduce greenhouse gas emissions throughout our value chain: We continue to drive progress toward a world where plastics need never become waste by focusing on reducing, recycling, and reinventing packaging: That means delivering a portfolio of options that minimize the use of single-use plastics, while still meeting consumers’ individual needs, whether they’re at home, away from home, or on-the-go: We’re also continuing to integrate purpose into our brands, using our scale to inspire and lift up people and communities: At the same time, we continue improving choices across our portfolio: We’ve laid out an ambitious agenda, focusing on the areas where we believe we can have the most impact. Strategic Analysis of the Coca-Cola Company. Pepsi’s Product Strategy. The product strategy. GLOBAL FASHION LINE. Your privacy is extremely important to us. The database is updated daily, so anyone can easily find a relevant essay example. Web. The company offers a diverse array of products. PepsiCo. 1. Pepsi Cola has gradually developed over years in order to gain its current position, for example, in 1902, Caleb introduced the Pepsi-Cola-Company in his pharmacy; moreover, in 1903, it was authoritatively listed in the Patent Office and by 1910, it owned franchises in 24 states around the country; later, in 1964, Diet-Pepsi emerged in the market and gained great success. Under the post financial crisis, the global economy is still vulnerable and going through a vicious circle of recessionary impact that leads the MNCs to take more cautioned step to in the entry in the overseas market, where they need to ensure elevated positive rate of return for their investment in relation to the pre-crisis period. Learn more how we’re taking action to address climate change and reducing greenhouse gas emissions across our value chain. In this context, this power is high while the consumers have plenty of options to choose other name brand and generic soft drinks; so, the marketers of this brand need to offer different package to sustain the market with strong position considering high bargaining power of the consumers. Due to PepsiCo is a global company which they supply their products to the entire world therefore PepsiCo have to mass manufactures their products in order to satisfying their customers. Web. International Counter-trade: A Reverse Marketing Perspective. in early 2020 to support communities most impacted by the COVID-19 pandemic. M&A can be specified as one of the cornerstones of PepsiCo business strategy. Best Global Brand – According to Forbes 2019 ranking, PepsiCo is ranked # 29 most valuable brand with a brand value of $18.8 Billion. That’s why we are focused on using our scale and expertise as one of the world’s leading food and beverage companies to tackle the long-term challenges facing the global food system. On the other hand, this brand has not addressed properly the obesity related problems in the society since the market share of the sweetened and diet soft drinks deceased significantly due to lack of nutritive value though the purchasers think about children’s weight and activity level. This paper has organized by taking data from secondary data sources, as Pepsi global strategy is very common area of research to the researcher and they have already provided many useful information in this regard, such as, brand expansion strategy of Pepsi and comparison the position of this brand with Coca cola. We will write a custom Research Paper on PepsiCo Inc.’s Global Expansion Strategy specifically for you for only $16.05 $11/page, According to PepsiCo (2012), the company was founded in 1898; Caleb Bradham, a pharmacist and drugstore-owner of North Carolina had discovered it while testing with mixtures of seasonings and fluids trying to create an energizing drink for patrons; however, he achieved a target more than anticipation, as his innovation is now considered one of the best-selling brands around the world. Yahoo Finance. The annual report of Pepsi suggested that the process of placing the colas to the shelves of the customers after the production procedure is a quite complex method. At the same time, the purpose of the company is to develop strong logistics to reach global consumers and make available in this brand (PepsiCo 2011, p.6). The products of Pepsi has already available in more than 200 countries, so, new market indicates rural markets where it has limited presence; however, expand business in rural areas with new products will be effective if it manufactures considering market demand of that specific areas. Between 2018 and early 2020, PepsiCo and The PepsiCo Foundation have pledged more than $65 million globally to advance recycling and collection. 8 Jan 2019 2:25 pm News Uncategorized On the other hand, PepsiCos int… Pepsi’s Strategy in the Carbonated Soft Drinks Market. Segmentation is the important strategy which helps the brand in targeting the specific group of customers with differentiated offerings.Pepsi is the mass market product which uses undifferentiated targeting strategies in order to be competitive and increase its sales.In the non-alcoholic beverag… Locating these topics and driving the vice presidents to fill PepsiCo’s gaps on a global scale is what makes Teichgraeber unique and so valuable to the company. In addition, even though there has been a mild slump in 2012, from the very beginning of 2013, it is showing signs of improvement; the following figure shows this in detail –. As part of the global expansion strategy, Pepsi has already strengthen the position of core brands along with innovation power, focused on shareholder value creation, maintained its strong value shares, and diversified product range for the customers (PepsiCo 2011, p.7). We reduced absolute GHG emissions by 6% across our value chain in 2019, progress toward our goal of 20% by 2030. The items in the Pepsi advertising strategy are principally carbonated refreshments, alongside natural product juices, snacks and others. 22 in India as selling price includes transportation and distribution costs. The current marketing strategy adopts by PepsiCo Inc. is definitely one that caters to its global standing. Place Strategy of PepsiCo. Second, forming strategic alliances in the global scale. LifeWTR is using its bottles as canvases to highlight emerging artists and designers around the world and working with organizations like Scholastic to provide art supplies to communities that don’t have art classes in school. PepsiCo Inc is among such corporations that apply several global strategies to increase its value in the international market, and to expand its market share. A firms generic strategy (based on Porters model) defines the basic strategy used to maintain competitive advantage. Global emissions have fallen significantly because of sheltering in place, revealing clean air and visible horizons for the first time in decades in some of the most polluted parts of the world, which also reminds us the direct impact our actions have on the planet. For a summary of our 2019 Sustainability Report and other downloadable PDF reports, visit our Downloads page. The annual report of the company suggests that it currently operates on around 200 markets; it is notable that different countries have different set of socio- cultural background, ethnic origins, historical contexts, diverse ideologies, and traditions or customs. For example, according to Yahoo Finance (2013), in 2009 this drink manufacturer had faced the worst economic time in its last five years history; however, a gradual improvement in the stock price has occurred in the 2010 and 2011 period. 1. International Expansion Strategies: Are Cross-Border Mergers & Acquisitions Successful? Learn more about how we’re making it easier for consumers to make choices that feel good for themselves and are good for the planet. 2017 was an year of healthy growth for the brand when Pepsico achieved a co… Samiee (2003, p.9) further stated that the international expansion of Pepsi in the Russian Republic through counter-trade in exchange of Vodka was significantly failure due to the insufficient bottling capacity of the trading partners of that market although Pepsi kept its highest effort to success the deal by a number of price declines. Next table shows main financial indicators of PepsiCo for years 2009 to 2012-. 1. It’s also why we recently signed the Business Ambition for 1.5°C pledge, committing to reduce our emissions in line with limiting global warming to 1.5°C, while also developing a long-term strategy for achieving net-zero emissions by 2050. Roche (2012) focused on the historical perspective of the soft drinks industry and pointed out that threat of new entrants is low because Pepsi is one of the most prominent brands in the whole economy in terms of size, sales volume, distribution networks, and strength; therefore, it would be very difficult to enter into this industry. PepsiCos generic competitive strategy is based on the need to address market pressure coming from its biggest rivals, including the Coca-Cola Company. Schuh (2012, p.412) also pointed out that before the global financial crisis the common approach of the MNCs for international operation was to engage decentralized operation and regional offices were independent for their local business decision making, but in the post financial crisis era they have shifted from their wider autonomy of the local operation and engaged central decision making. When it comes to sustainability, it’s about collective action and making progress that’s essential to the future of our businesses and planet. Learn more about the progress PepsiCo is making to help build a more sustainable food system. At the same time, Pepsi has the capability to lead the noncarbonated drinks market as a market leader while it has already captured 8% market share in this segment where the nearest competitor holds 7% share in this segment. Suppliers’ position can change time to time considering global economic position, external and internal environment of the buyers and so on; however, suppliers are most crucial factors to Pepsi because this brand is committed to maintain quality of the products, offer attractive packaging, avoid legal actions, and control commodity prices to decrease costs. Source: Self-generated from Yahoo finance (2013). Pepsico face shield case study. As of 2019, 47% of our beverage portfolio volume in our top 26 beverage markets met our 2025 added sugar reduction target, progress toward our goal of 67%. The current marketing strategy adopted by PepsiCo Inc. is definitely one that caters to its global standing. Brand name of Pepsi is the main strength point because the people all over the world have aware about this brand and they like to purchase this brand with highest reliability. This is IvyPanda's free database of academic paper samples. We are reducing added sugars, sodium, and saturated fats in certain products and expanding our offering of products like baked chips, which have 65% less fat than regular chips, as well as zero- and low-sugar beverages. Copyright © 2020 - IvyPanda is a trading name of Edustream Technologies LLC, a company registered in Wyoming, USA. Agarwal, S. & Ramaswami, S. N. (1992). Schuh (2012, p.3) argued that the global financial crisis originated from the collapse of US mortgage market and thrown the global economy into long-term recessionary impact that the countries couldn’t recover for last six years and the MNCs are anxious with their international expansion while the export market fall down and reducing capital inflows generated pressure on the banking system. But we know that being a Better company is about more than words. Today, you can find Lay’s Oven Baked in 23 markets around the world and Pepsi Zero Sugar has expanded into 95 markets. However, integrated marketing campaign, supply chain management, latest equipment, and variation in the packaging for different locations help this brand to increase loyal customer base in the international market. Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors. We are now setting a new goal to reach 100 million people by 2030. Figure 11: Pricing strategy of Pepsi. At the same time, Roche (2012) stated that it is essential to have strong financial support and customer acceptance to experience high profitability and return on investment; however, the company like Costco has the opportunity to enter the market with similar product range, which can crate extreme threat for Pepsi. Strategic Responses to the Global Financial and Economic Crisis in Central and Eastern Europe – The Foreign Multinational Company Perspective. Innovation is core to everything we do at PepsiCo, whether it’s product development or marketing strategy. The most widespread framework for global expansion strategy is the selection of entry mode for that target market composed with three types of predominant factors such as ownership of the company formed in the target market, its location and connectivity, and the extent of globalization in that market for legal barriers of transactions, and accounting standards. Upadhyay (2007, p.2) argued that success of global expansion strategy deeply concerned with the engagement of opportunities allow to run free in the emerging markets where the MNCs could achieve enough potential surpluses to comply with their commanding tone to meet the higher degree of market demand of that market raised from the large populations along with growing purchasing power. In addition to being compostable, these bags are primarily made from renewable, plant-based materials and use less energy to produce—reducing their carbon footprint by 60%. Learn more about how we’re working to support a long-term, sustainable supply of water for all. Learn more about how we're advancing human rights, promoting diverse and inclusive workplaces and increasing the earnings potential of women around the world. The Pioneer Foods acquisition is key to PepsiCo’s growth strategy across the entire African continent. For full functionality of this site it is necessary to enable JavaScript. Pepsico is one of the two leading soda beverages brands in the industry. However, it is notable that Pepsi cola always come up with suitable forms of TV advertising targeted at different set of target population, so that people of different cultures or religions can adapt with those. GATORADE HYDRATION TRACKING SYSTEM Explore the story. So, in addition to manufacturing our products in a responsible way and investing in programs that help new products be sustainable from the start, we’re also developing brand propositions that inspire, make life more enjoyable, restore and care for our planet, and help communities thrive. PepsiCo delivers snacks DTC: COVID-19 fad or long-term ecommerce strategy? Journal of International Business Studies, 23(1), 1-27. Puravankara, D. (2007). professional specifically for you? We delivered safe water access to more than 44 million people in underserved communities since 2006, and set a new target to reach 100 million people by 2030. 31 July. Schuh, A. Lisa Tirino | Greater New York City Area | Director, Global Strategy at PepsiCo | 500+ connections | View Lisa's homepage, profile, activity, articles "PepsiCo Inc.'s Global Expansion Strategy." On the other hand, it has to face some dilemmas to apply marketing strategies in the Muslim countries where people treat this brand as Jewish brand, which indicates the marketers failed to apply proper strategy to tackle the cultural issues; at the same time, customers can get similar products at lower price. Web. We have a lot of energy from both the top down and bottom up, showing dedicated leadership to do our part in helping to build a more sustainable food system. (2013). Partnership is more important than ever before, and we’ll continue to work with our peers, governments, NGOs, and the communities where we operate, leveraging all the tools at our disposal to advance progress. So, our scale and reach means that the practices we use, and the standards we apply, can have significant influence and impact. Unfortunately, your browser is too old to work on this site. The Pepsi Spire Family. The company deals in manufacturing, marketing, as well as, distribution of beverages and grain-based snack foods among other products. It was formed after the merger of Pepsi and Frito lay in 1965. However, the brand expansion plan of Pepsi is not limited for the beverage segment, but it diversifies its business in the nutrition segment with the product line of Quaker, Tropicana and Gatorade; it addition, it has goal to be one of the major players in this segment. Under such circumstances, the global expansion strategy of the MNCs has significantly curtailed and they most likely shifted their expansion strategy into five major directions formulated by the MNCs management, these are illustrated in the following diagram –. The Central and Eastern Europe economy has evidenced rapid wage raise, excessive browning of households, credit squeeze, depreciation on local currencies, and housing market collapse during the crisis while the Asian emerging economy turned backed to the growth path immediately by exploring manufacturing and commodity sector and stabilized the recessionary impacts. We’ve set up a global network of Demonstration Farms—more than 230 farms across nine countries—with a focus on teaching farmers how to increase yields, whilst minimizing their environmental footprint and enabling impactful peer-to-peer learning with neighboring farms outside of our supply chain. IvyPanda. The business community is stepping up and setting ambitious targets that we all know will require partnership, and there is genuine excitement about driving change together. Yesilyurt, O. (2020) 'PepsiCo Inc.'s Global Expansion Strategy'. Pepsico Business Strategy & Competitive Advantage. I’m really proud of the great work our teams are doing in this area and see a lot of opportunity for us to have a big impact. In 2019, we set a new target to reduce 35% of virgin plastic content across our beverage portfolio by 2025. In order to conduct all its promotional activities successfully, the manufacturer of the Pepsi cola greatly concentrates on a number of mass media options together with some outdoor advertising methods. From the way we grow our crops to the transport of our products and the coolers that display our brands, PepsiCo has already made significant progress in reducing greenhouse gas emissions throughout our value chain—but we know tackling climate change will require even more, and we can’t lose sight of that. The past few months have been among the most challenging in recent memory. It is notable that when the soft drink producers dispose off the industrial-wastes in rivers, water gets contaminated- this may result in not only damages to marine creatures but also in harm to human health; in addition, ecological experts have argued that the intricate chemical properties of certain drinks could harm tiny creatures and aggravate its impacts on global ecosystems. PepsiCo chooses the relevant distribution channel based on customer needs, product characteristics, and local trade … But even before COVID-19, the threat of climate change has demanded faster and bolder action from all of us. We joined the Alliance for Water Stewardship (AWS) with the aim to adopt the AWS’s globally recognized best practice in water stewardship across our high water-risk facilities and have completed four pilots around the world. 5 years to lift up Black communities and Black representation the marketplace and needs... 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