Step 1 The four major opportunities available for PepsiCo beverage segment are: The high preference for beverages by the youth thus likelihood of rising sales Available investment opportunities in other countries like Russia and China There is an increase in the demand of juice The company has expanded the range of non-cola products in the market The four major threats for PepsiCo beverage segment are: High number of competitors Unfavorable government regulation policies The decline in the demand for carbonated drinks is a threat their sales Observation of health issues especially diabetes Opportunities for PepsiCo snack segment are: High level of diversification Ready market for the snack due to Pepsi brand Good branch reputation Highly identify with the young generation who take a lot of snacks Threats to PepsiCo snack segment: High number of competitors Likelihood of duplication of idea Health awareness Change in Consumer choices and preferences Step 2 (a). Beverage segment PepsiCo Factors Coca-Cola Weighted Rating Total Rating Total Average Cost reduction 0.13 Distribution 0.15 4 2 score 0.52 0.3 3 4 score 0.39 0.60 channel CRM HRM Competitive Pricing 0.03 0.2 0.04 0.1 3 3 2 2 0.09 0.6 0.08 0.2 2 2 3 4 0.06 0.4 0.12 0.4 strategy Distribution 0.1 3 0.3 4 0.4 channel Pepsi is at 2.09 Coca-Cola is at 2.37 BCG MATRIX FOR DIVISIONS The divisions include: i. ii. iii. iv. v. vi. North America foods (NAF) Frito-Lay North America(FLNA) PepsiCo America beverage (PAB) Middle East Asia and Africa(MEAA) Latin America food and Snack business(LAFS) Europe and United Kingdom (EUK) Beverage segment matrix Divisions This year Last year Competitor Profit Related NAF EUK LAF PAB MEAA FLNA 15000 3500 9000 12000 14000 10000 6500 1300 6500 8500 7800 7500 sales 20000 6000 10000 13000 16000 12000 8500 2200 2500 3500 6200 2500 Market Share 0.7 0.5 0.9 0.92 0.8 0.83 Real market share = profit for current year/competitor sales High Star cow 0.9 0.8 High Low Low Question mark dog 0.7 0.6 0.5 Divisions LAF Quadrant Question mark Strategy Development and mkt EUK Question mark, star penetration Product development, market Star Cash cow Star Star and forward Forward, horizontal Diversification Backward integration, forward Forward, Backward FLNA PAB MEEA NAF (b) Snack segment EFE matrix PepsiCo Factors Coca-Cola Weighted Rating Total Rating Total 2 3 score 0.26 0.45 Average Cost reduction 0.13 Distribution 0.15 3 5 score 0.39 0.75 channel CRM HRM Competitive Pricing 0.03 0.2 0.04 0.1 5 4 2 3 0.15 0.8 0.08 0.3 2 2 3 4 0.06 0.4 0.12 0.4 strategy Distribution 0.1 3 0.3 4 0.4 channel PepsiCo 2.77 Coca-Cola 2.09 Step 3 PepsiCo could combine the two EFE matrices by in order to develop a corporate EFE matrix by considering the previous results and making the adjustments needed as observed through the BCG matrix. The two matrices have the original data generated from the two to develop a effective corporate EFE matrix