Strategic plans for managing and developing growth


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INTENSIVE GROWTH: "Product -market expansion grid" is a useful framework for detecting new intensive growth opportunities

Market penetration strategy: In this strategy company try to increase its market share with existing product only. PepsiCo has used several offers to retain its customers. PepsiCo also used celebrity endorsement (mainly sports person) to increase its market share with existing products.

Market development strategy The company was considered the target for takeover not only because the company ran the distant second in soft drink sector to the industry Coca-Cola organization or the Company, but also due to little of organization's stock was in hands of the management. Following creation of the PepsiCo, however, new company's director held the larger proportion of the shares, with the Lay holding the 2.5 percent stake of itself. The second force behind merger was the Frito-Lay's desire to be more aggressive and pursue the overseas markets. Company's sales had been largely restricted to Canada and United States, but it can now take the advantage of the Pepsi's strong operations over the international market, through which the products of Pepsi were sold in around 108 countries.

Product development strategy

The third force was perceived synergy between the salty snacks and the soft drinks. As per Kendall succinctly related to the Forbes in the year 1968, "Potato chip makes you thirsty; and thus Pepsi satisfies the thirst." Plan was thus to have the jointly market PepsiCo's soft drinks and the snacks, thus giving the Pepsi the potential advantage in the ongoing battle with the Coke. Unfortunately, the plans were eventually scuttled by resolution of the Commission of federal trade antitrust brought against the company Frito-Lay in the year 1963. FTC ruled in the year 1968 that the company PepsiCo certainly could not create the tie-ins between the Pepsi-Cola and the Frito-Lay products in most of the advertising. The company PepsiCo was also the barred from acquiring the snacks and the soft drinks maker for a period of over ten years. (Frito-lay company)

Diversification strategy : In this strategy company diversify its portfolio to minimize risk associated with it. Pepsi went for diversification by including low fat products and low sugar products. It also acquired many small companies to diversify its portfolio.

integrative growth

INTEGRATIVE GROWTH - Each company faces challenge of selection between different marketing strategies of growth. PepsiCo has a bunch of strategies called integrated growth strategies to:

'Expand Global Leadership Position of the Snacks Business'. PepsiCo is global snacks leader of the world, with No. 1 savory category of the share position in the virtually each key region around the globe. They have advantageous position for entire value chain in over more than 40 developing and developed regions in which they operate. Thus also the ability to have introduced the relevant products locally by using the global capabilities.

'Ensure Sustainable, Profitable Growth in Global Beverages'. When combined with actions they are taking to refresh their brands across the entire beverage category, they believe this game-changing transaction will enable them to accelerate their top-line growth and also improve their profitability. They continue to view the significant areas of the global beverage growth, specifically in the developing markets or in the evolving categories. They will thus invest in the attractive opportunities and concentrating in the geographies and the categories in which they are the leader or close to the second and where competitive game thus remains widely open.

'Unleash the Power of "Power of One"'. Combination of the snacks and the beverages-with the global high-demand and the local brands thus makes the company an essential and needful partner for the small-format as well as the large-format retailers.

'Rapidly Expand Our "Good-for-You" Portfolio'. By investing, thus accelerate growth of the platforms, and they are using the knowledge from the initiatives to improve their beverage offerings and the core snack and thus also developing high nutritious products for the undernourished people around the world.

'Continue to deliver the commitments and the Environmental Sustainability Goals. They actively work with their farmers to promote sustainable agriculture and thus developing the packaging alternatives in both the beverages and snacks to thus reduce impact on environment.

'Cherish the Associates and Developing Leadership to thus sustain the Growth'. By implementing tailored training programs to provide managers and the senior executives with leadership and strategic capabilities that are required in the rapidly changing environment. (Analysis of marketing strategy used by Pepsico)

diversification growth

DIVERSIFICATION GROWTH (identifying opportunities to add attractive business unrelated to current business) - the US based company thus conducted the restructuring exercise in the year 1997-98 by thus spinning-off the restaurants and the bottling businesses. Restructuring was thus aimed to achieve the improved and increased focus on company's snack food operations (Frito-Lay) and core beverage (Pepsi-Cola). By thus successfully adopting new 'focus' strategy since the year 1997, the company has thus emerged as second largest packaged consumer goods company (terms of the revenues) in world. By thus acquiring the leading beverages' companies like the Tropicana (July 1998), the South Beach Beverage (October 2000) and the Quaker Oats company (December 2000), company has thus significantly strengthened the competitive position in beverages segment. (Analysis of marketing strategy used by Pepsico)

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