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GLOBAL MARKETING
Few
internationally.
Rather, it includes the whole process of planning,
producing, placing, and promoting a companys products in
a worldwide market.
Large businesses often have offices in the foreign
countries they market to; but with the expansion of the
Internet, even small companies can reach customers
throughout the world
Even if a company chooses not to expand globally, it may
well face domestic competition from foreign companies
that are. This competition has made it nearly a necessity
for most businesses to establish an international presence.
Ethnocentric-Domestic
Domestic expansion only
Ethnocentric-International
Foreign expansion viewed as an appendage to domestic operations; same strategies are utilized in all countries.
HQ
You seeour
way
works best around
the world.
Polycentrism
Activities and functions are planned and managed, often by local nationals, on a
country-by-country basis (e.g., HRM is decentralized by country)
Would you
look HQ
at this? The
GMs
do
understand
the
local markets
Regiocentrism
Operations are geared towards a particular continental region with similar
economies and cultures
HQ
Alphaland
Betaminor
Betaland
Geocentrism
Products are functional, reliable, and standardized low-cost products (e.g., HRM
managed on a global basis)
HQ
Ethnocentric Attitude
Regiocentric Attitude
Polycentric Attitude
Geocentric Attitude
PepsiCo (Regiocentric)
PepsiCo is an examples of international company which is
WHO IS PEPSICO?
FRITO-LAY salty snack foods
Lays, Doritos, Cheetos, Tostitos, Fritos, Ruffles, Santitas, Sabra,
Walkers
QUAKER cereals, rice, pasta
Oatmeal, Granola Bars, Aunt Jemima, Captn Crunch, Life, Rice-aRoni
BEVERAGES -- carbonated drinks, sports drinks, fruit juices, tea,
waters
Pepsi, Gatorade, Mountain Dew, Aquafina, Tropicana, Sierra Mist,
Mug
Has joint ventures with Unilever (Lipton) and Starbucks (coffee),
and has a licensing agreement with Dr. Pepper Snapple Group (Dr.
Pepper, Snapple, Crush, Schweppes), Dole (pineapple), and Ocean
Spray (cranberries).
Market Share
PepsiCo
25 %
Kraft Foods
12
Hershey
9
Kellogg
6
Master Foods
5
General Mills
2
Proctor & Gamble
1
Private Label
7
Others
33
100
Volume Share
30,553.7
100.0
Middle East 75 %
India 49
Thailand 49
Egypt 47
Venezuela 42
United States 39
Nigeria 38
China 36
Russia 24
Mexico
75 %
Holland
59
South Africa
57
Australia
55
Brazil
46
India
46
United Kingdom
44
Russia
43
Spain
41
China
16
$ 22.0
$ 3.05
Lays
9.0
Mountain Dew7.5
Gatorade 7.3
Tropicana 6.1
Diet Pepsi 5.65
Ruffles
Tostitos
Aquafina
Pepsi MAX
Brisk
2.75
7 Up
4.8
Doritos
4.4
Quaker Foods 3.5
Cheetos
3.25
Mirinda
3.2
Sierra Mist
1.4
Fritos
1.4
Diet Mountain Dew 1.4
Starbucks RTD Bevs 1.1
Walkers
1.1
2.55
2.1
1.75
1.4
Pending regulations on food snacks & sugar content in childrens food, etc.
ECONOMIC
+ Emerging consumer markets with disposable income in China and India
SOCIO-CULTURAL
+ US residents eat snacks 2-3 times each day
+ Societal interest in health, exercise, and organic foods
TECHNOLOGICAL
+
Competitive Environment
RIVALRY Intense worldwide completion primarily with Coca-Cola, DPSG,
dependent/captive.
MARKET STRENGTHS/WEAKNESSES
STRENGTHS
Well-diversified, large focused brand portfolio; over 100 brands, 22 over $ billion/yr
Concentric diversification enables synergy in marketing activities & distribution channels
Number 1 in salty snacks worldwide, with a 25% market share in USA
Number 1 in beverages in USA (39%) [Note: Coke is # 1 worldwide]
Is the number 2 food and beverage company in the world (Nestle is # 1)
Has a well-integrated supply chain and distribution network
Using solar panels, alternative energy sources, compressed gas vehicles in facilities to
curb carbon emissions/footprint
Recent acquisitions to enter new markets: Russias leading juice companyLebedyunsky
VW Water and True North Nut snacks in UK; Lipton Teas agreement with Unilever
Investment in international markets 2016 > $1 billion in China; > $500 million in India
WEAKNESSES
Too dependent on the US market; over 12% of all sales are with WalMart
Hurt by bad publicity over Aquafina scandal, Aunt Jemima and Tropicana recalls
International markets have been difficult to develop some acquisitions have been poor.
International profits are badly hurt by currency exchange rates and strong US dollar
Some stockholders are pressuring PepsiCo to spin off the food divisions from beverages
STRATEGIC ASSESSMENT
Through acquisitions, PepsiCo grew from primarily a beverage
company into the second-largest food and beverage company in the
world. Using a concentric-diversification strategy, they acquired
businesses which were complimentary to their beverages notably
Frito-Lay (salty snacks), Taco Bell and Pizza Hut restaurants. While
they werent necessarily experts on how to make pizzas or chips,
they did know that they could sell their beverages to these same
customers, so marketing and distribution channel synergies were
achieved. Pepsi continued to acquire food and snack companies,
and built a brand portfolio of over 100 products worldwide most of
which go well with one or more of their beverages. In the 1990s it
became apparent that the fast-food restaurant business was
becoming very competitive, and with increasing stockholder
pressure, Pepsi spun off its restaurants to YUM Co. (Taco Bell, Pizza
Hut, Kentucky Fried Chicken).
Since that time, the company has continued to focus on its core
businesses beverages and snack foods. Their current portfolio of
products is so extensive that they dont worry about consumer taste
shifts or switching, because most consumers will simply switch from
one Pepsi product to another product item owned by PepsiCo.
2015
2013
2007
4.0
14126 21.3
2612
20618 32.7
8228 13.0
3.9
10510 16.7
Asia/MidEast/NorthAfrica
6375 10.1
20083 30.2
6431
66415 100
39474
45.031243
47.018038
45.7
GROSS PROFIT
34672
55.035172
53.021436
54.3
24885
970
1.5
2.2
---
---
75
0.1
110
0.2
13.2
911
1.4
59
7442
Tax
3.2 1973
NET INCOME
3.1 2104
5501
8.7
9705
224
38.214208
1359
39.525357
*15798 40.0
9.7
28384
4.7
1023025.9
13828 20.8
Cost of Sales
1860
9335 14.1
Europe/SubSaharaAfrica
Selling/Gen/Admin Exp
1158629.4
14.6
100
36.0
58
0.1
7170
18.2
685
1.7
0.6
0.1
97
0.1
19.3
5.0
6787 10.2
5658 14.3
2015
DIVISION Profit
Frito-Lay
2013
2007___________
%/Total Profit
NA 4304
51.5
3877
39.9
2845
39.7
6.7
617
6.4
568
7.9
33.3
2580
26.6
2188
30.5
2322
32.4
NA Beverages
2785
International
Latin America
- 206
- 2.4
1617
16.7
Europe/SSAfrica
1081 12.9
1327
13.7
Asia/ME/NAfrica
941 11.3
1140
11.7
- 1453
8353 1009705
- 15.0 - 753
1007170
- 10.5
100
PEPSICO
(in millions $)
NET INCOME
2015
5501
2013
8.7
6787
2007
10.2
Net Income/Share
$3.71
$4.37
Dividends/Share
40.8%
$2.7625
74.4% $2.24
$3.48
Stock Price/Share
(at year end)
$99.92
$82.94
5658 14.3
$77.32
51.3%
$1.42
9096
13.19375
0.41571
4.5
Receivables 6437
9.26954
9.04389
12.7
Inventory
3.93409
4.42290
6.6
2720
2.72162
23031
33.1
23.418575
2.8 991
22203
2.9
28.7
24.011228
43.536700
47.313249
100 77478
100
25.217839
23.0 7753
LT Debt+Leases 29213
41.924333
31.4
Other Liabilities
10846
15.610917
14.1 5438
15.7
TOT LIABILITIES
57637
82.753089
68.517394
50.2
12030
17.324389
69667
100 77478
34628
38.3
100
22.4
4203
31.517234
100
29.3
32.4
Stockholder Equity
10151
12.1
49.8
34628
100
2015
5501
2013
6787
2007
5658
CASH PROVIDED
FROM OPERATIONS
10580
9688
6934
CASH PROVIDED
FROM INVESTING
(3569)
(2625)
(3744)
CASH PROVIDED
FROM FINANCING
(3828)
( 221)
(Decrease)Increase FY2962
(3789)
(4006)
( 196)
3078
Cash @ Beginning
6134
6297
9096
9375
75
( 741)
1651
910
FINANCIAL ASSESSMENT
PEPSICO
2015
2013
2007
1.31
.827
Tot Liabilities/SEquity
1.24
.685
1.30
.502
10.44
9.165
7.877
37.3dys38.2dys 40.6dys
.905
.857
.0872 .1022
ROA (NP/TA)
.0790
.0876
Altmans Z
1.76
2.05
1.140
.1433
.1634
3.20
FINANCIAL TRENDS
POSITIVE TRENDS
Cash is increasing
Revenue + profits are up for Frito-Lay and NA
Beverages
Dividends have been increased
WORRISOME TRENDS
Revenue + profits are down in all international divisions
Big problem in Venezuela impairment costs > 2
Billion/2 yrs
Operating profits and Net profit are both down
Long-term debt is up; Debt/Asset ratio is too high
Stockholder Equity is way downwhy?
Interest expense is up
Altmans Z is getting critically low
Coca-Cola
Efficient Operations 8
Strong Marketing/Sales 8
Dr. Pepper/Snapple