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Resources and Core Competencies of Pepsico - Paper Example

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Boston College
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The core competencies and resources are essential to any company, but they cannot bring the competitive advantage alone. The skills and resources have to help in the establishment of a brand and the penetration of the market. Accordingly, effective advertising and branding are crucial in strategic positioning and growth. For years, the advertising industry has witnessed increment in interest from leaders in political positions (Rothaermel, 2015). Political groups have utilized this sector as a means of delivering their thoughts, ideas, and beliefs. For this assignment, I will assess PepsiCo company. PepsiCo company is a multinational snack, food and beverage company which has its headquarters in Purchase, New York. The company has a lot of interest in marketing, manufacturing and the distribution of beverages and snacks since its formation in 1965.

Resources and Core Competencies of Pepsico

PepsiCo has established itself as a major in distribution and marketing. PepsiCo's financial backbone is active and aggressive, which in turn supports in marketing strategies, social activities, and campaigns of promotion. It works together with different governments in nations where it operates and has established civic authorities ties. The organization resources of PepsiCo are aligned with the structure of the company for handling the prospects of double growth of digits. PepsiCo has three spacious units, and the loyalty of the employees of the organization is increased by the presence of a leader in Indra Nooyi who empowers them. Concerning physical resources, PepsiCo has three manufacturing plants in different countries, and the company also strives to be ahead in latest technological advancements. Pepsico also has the best of human resources as it attracts the best personnel through the provision of non-financial and financial motivation and delegating the activities to perform. The pace of innovation in the company for foods and beverages is second after Kraft. Pepsi brand of the company has an excellent reputation with clients because of its distinctive taste. Pepsico has the dominant force in the food and beverage industry because of its distribution systems that are strong and flexible which allow a broad market audience (Talukdar, 2015 p. 40). This is a core competency because it meets all the criteria for a competitive advantage. The distribution channel of the company has a goal to ensure products are within clients reach. Customs and practices are variant by market and retailers have different needs, but PepsiCo has successful models which it utilizes globally. Its Direct store delivery (DSD) has ensured this is successful, and PepsiCo has taken its products directly to many outlets for distribution. DSD offers financial benefits to retailers who can save on labor because PepsiCo takes care of merchandising of products.

Porters Five Forces Analysis of PepsiCo

This analytical tool is used in the assessment of competition, and it draws on the microenvironment and microenvironment. These forces affect the industry, and it changes the way its customers are served. The factors covered in porter's analysis include the threat of new entrants, threat of substitutes, bargaining power of customers, bargaining power of suppliers and industry rivalry. The risks of new entrants are medium because PepsiCo has already established itself in the global market. New companies in this industry cannot come in quickly because of the entry barriers such as taxes and government policies. There is a threat for substitute products and none for advertisement campaigns. The launching of products demands supplier integration (E. Dobbs, 2014, p. 32).

Strategic Capabilities of PepsiCo

Pepsico has managed to survive intense competition from more established brands such as Nestle and Coca-Cola because of its strategic capabilities. These include the robust technology, consumer goodwill and strong global trademarks and global footprint. Consumer goodwill and powerful global brands have been the critical portfolios of PepsiCo which has enabled the company to establish growth platforms. PepsiCo's focused portfolio provides world's best beverages, and it includes 15 brands generating over $15.6 billion yearly. The global brands of PepsiCo are supported by manufacturing and technology platforms such as the science of nutrition. Every division of PepsiCo contributes to technology and knowledge platforms, which help in the creation of competitive advantage (Yamamoto, 2015). PepsiCo practices product differentiation and promotes innovation. Concerning global footprint, PepsiCo has employed over 100,000 people in over 200 nations and generated over $39 billion. The changing trends are that the company is becoming more oriented towards customer satisfaction and new technology is being used to meet the ever-increasing client needs.

Value Chain Analysis of PepsiCo

The value chain analytical tool is used for the identification of the different ways businesses use in creating value for their clients. The portfolio of PepsiCo has 22 brands, which include Gatorade, Pepsi, mountain dew and Tropicana. Each brand's inbound logistics for PepsiCo reflect the quantity and nature of the used raw materials. The operations of PepsiCo are divided into six key segments, and the company carries out production through the use of sophisticated technologies and operating systems. The outbound logistics of Pepsico integrate direct store delivery, deliveries and use of networks for distribution. PepsiCo also has a marketing strategy that consumes a budget of $2.4 million, and it uses media and print advertising, celebrity and social media advertising. PepsiCo sells its products to clients through intermediaries such as supermarkets, and fast-food restaurants.

Figure to illustrate value chain analysis


SWOT Analysis of PepsiCo

SWOT analysis helps in the provision of a summary of primary issues developing from the evaluation of strategic capabilities of PepsiCo to ascertain the strategic position of the company. SWOT offers an overview of the strengths, weaknesses, opportunities, and threats. The current position of PepsiCo as worlds second biggest organization in beverage market is dependent on the ability of the organization to maximize on its strength. The organization continues growing regardless of the saturation of the market (Caloyeras et al., 2014 p. 124). This SWOT analysis indicates that PepsiCo stands to grow and become worlds best foods and beverage company. As a worldwide organization, PepsiCo has to consider the issues highlighted in the SWOT analysis in order to help in the minimization of barriers to its operations. The goal of this analysis is for identifying and evaluating the extent to which these weaknesses and strengths are relevant in the business environment of PepsiCo.


Pepsico has high-profile deals for sponsorship with the North American sports league, and this creates a broad customer base and subsequent expansion of opportunities for marketing.

The company has a strong and steady leadership in Indra Nooyi.

The continued prominence and growth of PepsiCo globally is a reflection of the strengths of the company. Its most significant strengths are strong brand image, product mix, extensive production and distribution network.

PepsiCos strong brand helps in the attraction of customers to its products, and the product mix helps with increments of its ability of reaching different segments and markets.

The extensive global production and distribution networks provide support to the expansion and international growth strategies of the company


PepsiCos soda lines have become its weakest of links regardless of the sports sponsorships

There are incidents of emerging market exposure.

PepsiCo has a limited business portfolio given that it operates in the industry of food and beverages. It is a weakness because the vulnerability of PepsiCo to risks in the market for food and beverages is maximized.

Pepsico has not realized success in marketing its products to clients that are conscious of health.


The company has chances for innovation of products

Cost-cutting by PepsiCo should continue through to 2019, and its future profits can come from plant rationalizations, efficiency in more great supply chains, smart spending policies and the new strategy for shipping.

Market penetration in countries that are developing in order to generate more revenues

Forging global alliances for PepsiCo will help in increasing the presence of the company in the market.


There is intense competition from Coca-Cola

There is threat developing from the sluggish international markets.

Case Study Two: Rocket Internet will the copycat be imitated?


Rocket Internet is based in Berlin, and it engages in the starting, developing and funding of e-commerce and related online businesses (Parr, 2016). The organization has over 25 offices and more than 700 workers with 15000 portfolio organizations spanning 40 countries (Scholes et al., 2014 p. 102). Rock internet is the most significant internet platform outside of China and the United States of America. This makes it have the capability of identifying basic consumer needs. Factors for consideration for Rocket Internet include the company's network, maintenance of technology and infrastructural process. Rock Internet has many enterprises which try being competitors. The groups were managing director and co-founder work together for the development of the business.

Core Competencies and Organizational Resources

The financial backup for rocket internet is Kinnevik based in Sweden, and it is its primary investor in the world. Kinnevik has contributed to its survivability through the many networks it has and experience in investing in many businesses in the world. Rocket Internet works with a team of investors of around 35 experts in finance. Rocket Internet has the required financial skills for a venture capital firm, and it offers the technology and necessary skills. Rocket Internet has over 250 specialists who work at the head office in Berlin, and these experts have majored in engineering, marketing, customer management and online marketing. The company also has a Global Venture Development programme which is inclusive of the mobile task force which brings technical know-how to the market. Furthermore, the human resource team of Rocket Internet recruits and supports staff regularly. Rocket Internet recruits ambitious, extraordinary graduates having analytical skills. The company also has a strong entrepreneurial culture that empathizes on performances (Scholes et al., 2014 p. 103). The portfolio of the business is global, and expertise is shared throughout these business units.

Strategic Capabilities

Rocket Internet's overall strategy is formulated at the central office, and the same applies for the identification of new concepts, ideas, and business models. The managing directors help with the scanning and identification of proven mobile and online transactions in the international sphere. Rocket Internet also has speed in launching global business models, which is different to much-related business, and this helps in the gaining of competitive advantage. The infrastructure and distribution network of Rocket Internet is international. The company specializes in execution and not innovation.

VRIO Analysis of Rocket Internet

VRIO analysis is regarded as one of the useful tools for review and it is used in the determination of a company's competitors through the consideration of different dimensions of evaluations (Knott 2015 p. 1806). VRIO analysis takes into account of the capabilities, resource and core competencies which have to meet these four requirements for sustainability...

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