1. What is PepsiCo’s corporate strategy? Briefly identify the business strategies that PepsiCo is using in each of its consumer business segments in 2008.
PepsiCo’s corporate strategy had diversified, in 2008, the company into salty and sweet snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees, purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals, grain-based products, and breakfast condiments. Strategies that kept their brands at the top were tied to new product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. A new element of PepsiCo’s corporate strategy was product reformulations to make snack
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and Canada. Quaker Oats is the leading in products sold with a 58 percent maker share in North America. Also, Quaker Foods was the third largest ready-to-eat cereal maker. Health conscious, better-for-you products generate more than half of Quaker Foods’ 2007 revenue. The 9-cell industry attractiveness is based on industry attractiveness and competitive strength/market position. Frito-Lay North America’s business units look like they would lie right in the center of the matrix in medium priority for resource allocation. PepsiCo Beverages North America looks like it would be in the average column of competitive strength/market position and high on the industry attractiveness row. Their business units place them in the high priority for resource allocation. Pepsi International is the strongest business portfolio of the three and is in the strong column for competitive strength/market position and high industry attractiveness row that places in business units in high priority for resource allocation.
3. Does PepsiCo’s portfolio exhibit good strategic fit? What value-chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see? Does PepsiCo’s portfolio exhibit good resource fit? What are the cash flow characteristics of each of PepsiCo’s four segments? Which businesses are the strongest contributors to PepsiCo’s free cash flows? Based on the