BUSI 400-D01 LUO
Exercise 5C, Steps 1-2
3 Strategies PepsiCo is Pursuing:
1.) Joint Venture: PepsiCo has recently teamed up with Starbucks in an agreement for the marketing, sale, and distribution of bottled Starbucks drinks in Latin America. The coffee and energy drink market in Latin America has been growing rapidly and by joining forces; Starbucks and PepsiCo will be able to use each other’s strengths to work together in gaining an advantage in this market.
2.) Differentiation: PepsiCo has done a great job in the area of differentiation through its Lays potato chips brand. Through the “do us a flavor” contest, they have had millions of people send in ideas for new flavors of Lays chips. PepsiCo then narrows it down to 4 finalists and puts those 4 flavors on the shelves of stores and lets the public pick a winner. Not only is this a great marketing campaign but it also brings about differentiation because the flavors chosen are unique industry wide and have never before been available options in the potato chip market.
3.) Product Development: PepsiCo recently came out with a new flavor of Pepsi called Pepsi Limon. This new flavor is just a modification of the original Pepsi that focused on Hispanic customer requests. So not only is Limon a form of product development but it also has a focus strategy to it as well.
3 Strategies PepsiCo Should Pursue
1.) Horizontal Integration: According to our text, horizontal integration is “one of the most significant trends in strategic management” (David, 136). By seeking ownership or increased control of competing firms PepsiCo could give themselves a competitive advantage in an industry where Coca-Cola has been dominating. Through mergers and acquisitions PepsiCo would be able to grow at a faster and more effective rate.
2.) Related Diversification: PepsiCo should always be trying to come up with new variations of products and services through each of their brands. With more focus on coming up with new variations of existing products PepsiCo