Diversification Strategies Case Study

PepsiCo's Diversifications: The Payoffs

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Abstract:
Since the mid 1960s, PepsiCo, the world's number two soft drink maker, had gradually transformed itself from a carbonated soft drink maker to a diversified food and drink maker. PepsiCo's diversified portfolio, while helping it to tide over a slowdown in the global beverage industry in the late 1990s, also provided it with an unparalleled bargaining power to deal with supermarket giants like Wal-Mart. The company witnessed a 45% increase in its sales and a fourfold increase in its net profits between 1996 and 2004. By 2004, with net revenue of $29 billion, PepsiCo was the world's third largest food and beverage company.

Pedagogical Objectives:

• To highlight the PepsiCo's diversification strategies
• To discuss the challenges faced by PepsiCo's in diversifying its portfolio.

Keywords : Global carbonated beverages industry; PepsiCo’s diversification in food business; Coca-Cola; Global obesity concerns; PepsiCo’s competitive advantage; Pepsi challenge; Frito Lay; Diversification Strategies Case Study; Largest food brands in the US; New products to be launched by PepsiCo; PepsiCo’s products and brands