Pepsi and Quaker Merger Essay

7235 Words 29 Pages
OUTLINE

Introduction ………………… 3

1. The business – economic setting a. The Business Strategy …………………. 4 b. Mission and Strategies …………………. 5

2. PepsiCo Strategic Positioning a. Industry Analysis …………………. 6 b. Company Background ………………… 7 c. Snack Food ………………… 7 d. Beverages ………………… 8 e. Company History – PepsiCo ………………… 9 f. PepsiCo Financial Analysis ………………… 10

3. Terms of the acquisition a. How large was the premium paid to the target ….. 12 b. PepsiCo's Acquisition of Quaker Oats ………… 12 c. Quaker boosts Pepsi’s results ………… 13

4. Merger transaction analysis ………………… 14 a. Target
…show more content…
It is affected by the following: ➢ Shifts in consumer demand; ➢ By new inventions, which cause the immergence of new substitutes; ➢ Lack of stimulus to improve efficiency and in the long run lose out to new competitors; ➢ Government intervention in the form of laws and regulations.

The main disadvantage of a monopoly is the unrestricted market power or the power to decide on the price, which is granted to the monopolist. This is turning leads to the exploitation of customers due to lack of choice.

Coming back to the case, here PepsiCo is definitely going to benefit enormously from this merger. Quaker is definitely a big company in itself, but a merger with yet another soft-drink giant will only further consolidate its position in the market. This merger is highly beneficial to both parties since them more or less substitutes for one another.

Thirsty people will either go in for a carbonated sweet drink or a non-carbonated fruit drink. By supplying both the alternatives less than one banner the company is retaining both the customer bases.

Further Quaker is known for its Gatorade in the sports drink segment with almost 80% of the market share, which is nearing a monopoly in this segment. The tie up would boost the sales of PepsiCo’s other fast foods, since fast foods and drinks almost always supplement each other.

This would also give PepsiCo an

Related Documents