What Is SWOT Analysis?

SWOT (strengths, weaknesses, opportunities, and threats) analysis

is a framework used to evaluate a company's competitive
position and to develop strategic planning. SWOT analysis assesses
internal and external factors, as well as current and future potential.

A SWOT analysis is designed to facilitate a realistic, fact-based,

data-driven look at the strengths and weaknesses of an
organization, its initiatives, or an industry. The organization needs to
keep the analysis accurate by avoiding pre-conceived beliefs or gray
areas and instead focusing on real-life contexts. Companies should
use it as a guide and not necessarily as a prescription.

Understanding SWOT Analysis

SWOT analysis is a technique for assessing the performance,

competition, risk, and potential of a business, as well as part of a
business such as a product line or division, an industry, or other
entity.

Using internal and external data, a SWOT analysis can tell a

company where it needs to improve internally, as well as help
develop strategic plans.

Using internal and external data, the technique can guide

businesses toward strategies more likely to be successful, and away
from those in which they have been, or are likely to be, less
successful. An independent SWOT analysis analysts, investors or
competitors can also guide them on whether a company, product
line or industry might be strong or weak and why.

SWOT Analysis of Pepsi Company

Pepsi is the world’s second largest beverage and food company based on
net revenue.
In North America it is first largest Beverage and Food Company by net rev
enue. PepsiCo is amultinational Corporation, offering manufacturing,
distribution and marketing of soft-drinks, beverages, grain-based snack
foods and other products.PepsiCo has many diversify business units such
as soft drinks (Pepsi, Slice,
MountainDew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aqu
afina bottled water, Sport drinks,Tropicana Juices), Snacks (Rold Gold
pretzels and Frito-Lay). In 2009, nineteen product linesof PepsiCo's
achieved revenue of greater than $1 billion each, and its products are
distributedmore than 200 countries, by achieving annual $43.3 billion net
revenue. As of 2010 it hasmore than 285,000 employees globally. Here is
the SWOT analysis of PepsiCO.

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:

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.

WEAKNESS:

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:

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 Starbucksand 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:

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.

Conclusion

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.

Coca cola is a brand which is present in households, shops, hotels,
offices, etc. You name it, and the place would have heard of Coca
cola. Coca cola has many productsin its arsenal. Here is
the SWOT analysis of Coca cola.

Strengths in the SWOT of Coca Cola

1. Brand Equity – Interbrand in 2011 awarded Coca cola with the

highest brand equity award. Coca cola with its vast global
presence and unique brand identity is definitely one of the
costliest brands with the highest brand equity.
2. Company valuation – One of the most valuable companies in
the world, Coca cola is valued around 79.2 billion dollars. This
valuation includes the brand value, the numerous factories and
assets spread out across the world and the
complete operations cost and profit of Coca cola.
3. Vast global presence – Coca cola is present in 200 countries
across the world. Chances are, any country that you go to, you
will find coca cola present in that market. This vast global
presence of coca cola has also contributed to the building of the
mammoth brand name.
4. Largest market share – There are only 2 Big competitors in
the beverage segment – Pepsiand Coca cola. Out of these 2,
coca cola is the clear winner and hence has the largest market
share. Amongst all beverages, Coke, Thums up, Sprite, Diet
coke, Fanta, Limca and Maaza are the growth drivers for Coca
Cola.
 5. Fantastic marketing strategies – Coca cola unlike Pepsi
always tries to win peoples heart. Where Pepsi’s target is
continuously changing, and is targeted towards youngsters,
Coca cola targets people of all ages. The targeting is also done
by celebrities who are well liked – for example – Amitabh
Bacchan, Sachin tendulkar, Aishwarya Rai, Aamir Khan etc
6. Customer Loyalty – With such strong products, it is natural
that Coca cola has a lot of customer loyalty. The products
mentioned above like Coca cola and Fanta have a huge fan
following. People will prefer these soft drinks over others.
Because of the good taste of Coca cola, finding substitutes
becomes difficult for the customer.
7. Distribution network – Coca cola has the largest distribution
network because of the demand in the market for its products.
On the other hand, due to this successful distribution network,
Coca cola has been able to command such a high market
presence.

Weaknesses in the SWOT of coca cola

1. Competition with Pepsi – Pepsi is a thorn in the flesh for Coca
cola. Coca cola would have been the clear market leader had it
not been for Pepsi. The competition in these two brands is
immense and we don’t think Pepsi will give up so easily.
2. Product Diversification is low – Where Pepsi has made a smart
move and diversified into the snacks segment with products
like Lays and Kurkure, Coca cola is missing from that segment.
The segment is also a good revenue driver for Pepsi and had
Coca cola been present in this segment, these products would
have been an additional revenue driver for the company.
3. Absence in health beverages – If you watch the news, you
would know that obesity is a major problem affecting people
nowadays. The business environment is changing and people
are taking measures to ensure that they are not obese.
 Carbonated beverages are one of the major reasons for fat
intake and Coca cola is the largest manufacturer of Carbonated
beverages. The inference is that the consumption of beverages
in developed countries might go down as people will prefer a
healthy alternative.
4. Water management – Coca cola has faced flak in the past due
to its water management issues. Several groups have raised
lawsuits in the name of Coca cola because of their vast
consumption of water even in water scarce regions. At the
same time, people have also blamed Coca cola for mixing
pesticides in the water to clear contaminants. Thus water
management needs to be better for Coca cola.

Opportunities in the SWOT of coca cola

1. Diversification – Diversification in the health and food business
will improve the offerings of Coca cola to their customers. This
will also ensure that they get better revenue from existing
customers by cross selling their products. The supply chain
which is distributing their beverages can also distribute these
snacks thereby sharing the load of Supply chain costs.
2. Developing nations – Although developed nations have a high
presence of Coca cola, these countries are slowly moving
towards healthy beverages. However developing countries are
still being introduced to the delight of carbonated drinks and soft
drinks. Countries like India which are developing and have a hot
summer, find the consumption of cold drinks almost doubled
during summers. Thus the higher consumption in developing
environment’s can be a good opportunity to capitalize for Coca
cola.
3. Packaged drinking water – With hygiene becoming a major
factor in the consumption of water, Packaged drinking water
has found its way into peoples mind. Coca cola has a presence
in the packed drinking water segment though Kinley. Although
Kinleys expansion is slow as of now, Kinley has a huge
potential of expansion. Thus Coca cola as a company should
 focus on the expansion of Kinley as a brand and take it up
to Bisleri ‘s level of trust.
4. Supply chain improvement – Supply chain can be a major
cost sink hole with the transportation costs always rising. Coca
cola’s complete business is based on transportation and
distribution. There will always be possible improvements in this
area. Thus Coca cola should keep strict watch on its Supply
chain and keep improving to bring the cost down.
5. Market the lesser selling products – In the product portfolio of
Coca cola, there are several products which have not found
acceptance in the market. Coca Cola needs to concentrate on
the marketing of these products as well. It is understood that
Coca cola has made several expenses to launch these
products. Thus, the marketing and subsequent rise of sale of
these products will help revenue of Coca cola.

Threats in the SWOT of coca cola

1. Raw material sourcing – Water is the only threat to Coca cola.
The weakness of Coca cola was the suspected use of
pesticides or vast consumption of water. However, the threat
here is that water scarcity is on the rise. With the climate
changing, and regions of various countries facing scarcity of
water, sooner or later someone might raise fingers on beverage
companies. Thus, Water sourcing is an axe which can fall
anytime on the head of Coca cola. If water is limited or rationed,
Coca cola can experience a major downfall in their revenue and
capacity of distribution. The same can affect its arch rival Pepsi
as well.
2. Indirect competitors – Coffee chains like Starbucks, Café
coffee day, Costa coffee are on the rise. These chains offer a
healthy competition to Coca colas carbonated drinks. They
might not be a big competition for Coke, but they do give a dent
to its beverage market. Similarly, health drinks like Real
and Tropicana as well as energy drinks like Red bull
and Gatorade are stealing away the market share indirectly.