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Value Chain Analysis and Strategies

The document analyzes PepsiCo's value chain, including inbound logistics involving raw material contracts, operations using non-concentrated orange juice and concentrate sales, and outbound logistics like direct store distribution and broker-warehouses. It also discusses technology development, human resource development, and marketing/sales with a close customer contact model and brand building investments. A TOWS matrix identifies strengths like a diversified portfolio, opportunities in emerging markets and healthy foods, threats from competitors, and strategies around differentiation, localization, and improving health perceptions.

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Chhaya Motwani
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114 views4 pages

Value Chain Analysis and Strategies

The document analyzes PepsiCo's value chain, including inbound logistics involving raw material contracts, operations using non-concentrated orange juice and concentrate sales, and outbound logistics like direct store distribution and broker-warehouses. It also discusses technology development, human resource development, and marketing/sales with a close customer contact model and brand building investments. A TOWS matrix identifies strengths like a diversified portfolio, opportunities in emerging markets and healthy foods, threats from competitors, and strategies around differentiation, localization, and improving health perceptions.

Uploaded by

Chhaya Motwani
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Performance with Purpose

Value Chain Analysis


1. Inbound Logistics
Purchase of the raw materials: Use “future contracts” to
cover different fluctuation in the raw material market
(Primarily oil, corn, fuel, etc.)

2. Operations
 Use of non-concentrate orange juice to create a very tasty
and healthy product
 Sells only concentrate to the bottlers
 PepsiCo owns same shares from the four bottlers
companies
Wednesday August 29, 2007
Performance with Purpose

Value Chain Analysis


3. Outbound Logistics
 “Direct store distribution” : provides a greater degree of
business control. Enables merchandising with maximum visibility
and appeal
 Broker-Warehouse : Some products delivered from
manufacturing plants and warehouses to customer warehouses and
retail stores
- Less costly system
- Works best for products that are less fragile and perishable, have
lower turnover, and are less likely to be impulse purchases
 Foodservice and Vending
Distribute snacks, foods and beverages to third-party foodservice
and vending distributors and operators.
- Supplies products to schools, businesses, stadiums, restaurants
andhave lower turnover, and are less likely to be impulse purchases

Wednesday August 29, 2007


Performance with Purpose

Value Chain Analysis


4. Technology Development
Understanding the customer to add more value and convenience
5. HRD
Empowerment of people and growth and well being of all the
stakeholders
6. Marketing & Sales
 A very close contact maintained by sales & distribution staff with
retail, vending and food service accounts throughout US
 A Lot of Marketing Muscle, spending on building brand;
endorsements & advertisements from sports-stars & youth
generation Icons; Maintaining the “Hip” image

Wednesday August 29, 2007


Performance with Purpose

TOWS Matrix
Strengths Weaknesses
Global market leader ? The health issues over Trans fats &
Money power & Strong Brands sugars
Diversified product portfolio ? Weak presence in the emerging
Healthy food products portfolio markets
2006: Outside U.S. Operations ? School and environmental concerns
accounted for 41% and 36% of net
revenue and operating profit
Opportunities SO Strategies WO Strategies
EmergingMarkets  Invest in Emerging Markets  Focus on Emerging Markets through
Demand for Non-Carbonated localization
 Add more Healthy food & drink
drinks
brands in portfolio  Develop more Health foods
Demand for Healthy foods
 Fight competition (Adv., Pepsi Chall.)  Improve image through CSR

Threats ST Strategies SW Strategies


Strong and well-run  Fight competition through Product  Run more awareness campaigns on
competitors differentiation healthy foods
Flat demand for carbonated
 Focus on Non-carbonated drinks
drinks
Domestic brands and store  Have close tie-up with stores and kill
brands the store brands thru aggressive pricing

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