Companies, which can merge their manufacturing activities of various product lines into one to acquire low cost leadership, are successful in this industry. This case study was compiled from published sources, and is intended to be used as a basis for class discussion. A positive NPV suggests a good investment. We find that non-economic influences prevailed over economic influences in the decision to pursue the diversification strategy, and that due in part to the strength of these influences, Samsung underestimated the market risk and overestimated the contribution its core competencies and synergy could make. UCB, founded in the year , has had a bullish trajectory right from its inception. This would result in achieving economies of scope and will give the company competitive advantage.
Pepsi Co’s Diversification Strategy in Case Solution,Pepsi Co’s Diversification Strategy in Case Analysis, Pepsi Co’s Diversification Strategy in Case Study Solution, 1. What is PepsiCo’s corporate strategy? In , PepsiCo’s corporate strategy was a blend of few strategies which helped the company to increase its p.
Two questions are raised in the research: Central to its diversification strategy were the chairman of Samsung and key members of the planning team at the Office of the Chairman. We find that non-economic influences prevailed over economic influences in the decision to pursue the diversification strategy, and that due in part to the strength of these influences, Samsung underestimated the market risk and overestimated the contribution its core competencies and synergy could make.
Matters were made worse by the significant costs incurred in transferring Samsung's core competencies — its high quality reputation and culture — to the new business. By the time Korea finally emerged from the crisis, the finance team at the Office of the Chairman had taken charge of strategic management, increasing financial control and emphasizing internal efficiency. A further promising area of enquiry would be to draw on work on the role of managerial perceptions in relation to diversification strategy Pehrsson, , to investigate how managers respond to and interpret developments in the macro-competitive environment, both in terms of changes in the real economy of the sort considered here, and in relation to possible economic policy responses.
More generally, this would point to a consideration of the way micro-level factors, including managerial practices, and cognition, influence managerial responses to and interpretation of such contextual factors Barney, ;Guillen, ; Lee and Lee, ; Nadkarni and Barr, ;Peng and Luo, ;van Oijen and Douma, Questions arising here include the way in which the internal configuration of firms may moderate their response to external competitive conditions.
Macro-Competitive Context and Diversification: Yet the fear of a vicious cycle of business failures held them back from launching serious structural reforms Kim, Under this regime, Korean firms, along with their inefficient resource allocation policies, still benefited from their intimate relations with the government, and seized opportunities to expand their businesses through governmentsupported approaches to policy e.
However, fundamental market-oriented institutional change in Korea was felt after the financial crisis in late , which served as an important institutional inflection point in our study context. Does market-oriented institutional change in an emerging economy make business-group affiliated multinationals? May J Int Bus Stud. The example of Korean chaebols or Japanese keiretsus furthermore highlights the proclivity of late coming firms to diversify into various businesses, as it enables firms to exploit scale, as well as network and scope economies meanwhile facilitating the monitoring process for governments Abegaz, Khanna and Palepu and Lee and Lee furthermore state that diversification allows firms to overcome market imperfections through the creation of internal capital and labour pools and to exploit synergies through the creation of credible group brands later on.
The rise and competitiveness of South Korean automobile manufacturers - a comparative study with German auto producers. Although the growth rate was only 1. The salty snack industry was flourished industry in theNorth America, which was flourishing with the passage of time. Frito Lay was rapidly growing in the snack business with the introduction of new snack kit, snack mix product and natural beef jerky snacks. The new products of Frito Lay were very popular among the preteen and teen age group because of their bold flavor and with dieting adults since they were low in fats and carbohydrates.
According to current performance it is expected that industry will grow more, the company should focus on the same strategies to promote the business in arena. Frito Lay international was also successfully operating in many countries around the globe. Market share of Frito Lay was increasing gradually and it was expanding its business in many countries through acquisitions joint ventures.
Pepsi-Cola was the runner up to soft-drink leader Coca-Cola, but during the mid s Pepsi fell behind its chief rival in the industry at a disturbing rate. The main reason for falling behind its rival was improper strategy to fight its rival Coca-Cola. This strategy proved successful to come back from the bad situation of the company. Beside this strategy the company decided to capture market share from other areas of the business like bottled water, tea and coffee. Bottled water was particularly attractive segment for Pepsi Co since U.
S bottled water consumption had increased from 2. Pepsi had also beat Coca cola into beverage category i. Pepsi can compete its rival through focusing on the other areas of the business like bottled water, tea, and coffee. Tropicana was the number one brand and fastest growing major brand of orange juice, and achieved double digit volume growth during to become the third largest brand among all juice products sold in U.
Quaker oats was the leading producer of hot and ready to eat cereals, grain-based snacks, and rice and pasta side dishes in theUnited statesandCanada. Quaker dominated the oatmeal category of the breakfast food industry with new product innovation that included new flavors, microwave able cups and vitamin-fortified formulation.
Determine whether the firm resources strengths matches the resource requirements its present business lineup. Frito lay has sufficient resources to meet the requirements of the industry i. Frito Lay owned top selling chip brand in each U. S salty snack category as it has claimed that it has nine of the ten top selling brands. To meet the requirements and fulfill the demand of international customers it has affluent resources as it entered into joint ventures and had acquired established chip companies outside the U.
To survive in the industry Pepsi decided to utilize those resources where it was affluent enough, like Pepsi was considered the complimentary product with chips and snacks.
The company decided to introduce power of one strategy which helped to increase the company sale and market share. Pepsi also entered bottled water, coffee and tea beverage segment in which it was effluent enough to meet the requirements of its industry. Pepsi also benefited from its reorganization of its international bottling operations, it also gained market share in developing markets by making successful local business owners franchisees to distribute soft drinks in nontraditional manners.
Tropicana was the number one brand and fastest growing major brand of orange juice, and achieved double digit volume growth during to become the third largest brand among all products sold in U. The Gatorade was an outpaced product of Pepsi which helped to increase its sale. Quaker oats was the leading producer of hot and ready to eat cereals, grain-based snacks, and rice and pasta side dishes in theUnited StatesandCanada.
Quaker dominated the oatmeal category of the breakfast food industry with new product innovation that included new flavors, microwaveable cups and vitamin-fortified formulation. Frito Lay is the leader in snack food industry and its at the peak of the product life cycle.
It has generated cash to maintain high share in the market. Investment in advertising and new products, packaging is required to sustain and maintain the position in the industry. Quaker Oats division is a dog. It has a low market share as compared to the top 3 brands and as the sales are declining company should carefully manage the small amount of cash this unit can generate in theNorth AmericaandCanadamarket. Company has developed Power of One Strategy to combine the consumption of snack foods and Pepsi Cola.
Thus the company has selectively managed the resources for the small amount of cash it can generate. Rank the business units in terms of priority for resource allocation and decide whether strategic postures of each business unit should follow aggressive expansion,fortify or defend , overhaul and reposition or harvest?
Pepsi and Quaker oats both are in medium attractive markets, the business strengths of both are also medium than Frito lay. According to our analysis, the company should Build Selectively for Frito Lay, and should:. The company should Selectivity manage for earnings for Pepsi and Quaker Oats, and should follow these steps:.
Company should remain in the current market and protect it by using its strong advertising and distribution network. You are commenting using your WordPress. You are commenting using your Twitter account. You are commenting using your Facebook account. Notify me of new comments via email. Create a free website or blog at WordPress. Marketing Leave a Comment.
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Pepsi Co’s Diversification Strategy in 2008
Pepsi co diversification strategy case analysis 1. Case Analysis Purpose To analyze how the PepsiCo’s diversification strategy has maximized the shareholders value. To identify problems, opportunities, and strategic actions that would sustain its impressive financial and market performance. Let us write or edit the essay on your topic "Case analysis on PepsiCo's Diversification Strategy in " with a personal 20% discount. The case is important for a strong company like PepsiCo deals with several showing the related diversification challenges, to name few, low international profit strategy. margins, product innovation, supply chain decisions and fierce competition.