SWOT ANALYSIS

STRENGTHS

A soft drink is always categorized as the symbol of youth, the elixir of vitality, and the upholder

of ‘hip.’ In Pakistan specifically, carbonated drinks enjoy a substantial growth rate worth 6.4%

between 2004 and 2009, and occupied 63.7% of the market share. Consumption is second nature

to most people who classify themselves as Pepsi consumers. As such the greatest opportunity for

Pepsi is that it can perform successful diversification and attach their brand name to a brand new

line of products and still be recognized. From chips to juices, from oats to mineral water, Pepsi

can venture out into a plethora of side products and even acquire a number of related businesses

through horizontal integration, such as Taco Bell and Tropicana.

This also makes distribution a strong point for Pepsi Pakistan with 62 units operating nationwide.

Pepsico’s tailor made strategy for the country capitalizes on values of family orientation, which

can clearly be seen in how they seem inclined towards promoting family packs and other larger

forms of distribution. This in turn determines prices accordingly, as can be studied in the strategy

section in detail.

OPPORTUNITIES

Another pertinent example of strength could be that of the innovative fountain beverage

dispensers which allow consumers to interactively create customized beverages with

technological correspondence. This pushes the envelope for all segments outlined by Pepsi. And

underneath all this, Pepsi can always capitalize on the growing population with a whopping 70%

worth of youth, in all of its production centers to draw profitable segments from, as well as the

ever shifting trend of fast food as countries develop over time. Since Pepsi is affiliated with a

plethora of eateries in Pakistan, it can maximize its ideal of ‘on-premise’ and ‘take-home’

operations equally well.

A recent opportunity revolves around a corporate focused government and this allows Pepsi to

take advantage of many new ventures such as Disneyland in Lahore and newer, better dining hot

spots. As a major contributing entity to the economy Pepsi enjoys a lucrative position to employ

a vast chunk of the local workforce and keeping its production process as good as it ever was.

THREATS AND WEAKNESSES

However the possible threats faced by Pepsi can shake the ‘future-proof’ foundations if not

monitored closely. Pepsi benefits from its strong relation with its suppliers as well as its effective

pricing campaigns. Maintaining a price of a Rupees 75 product is central to the marketing

strategy since it sustains Pepsi’s position in its customers’ view. Pepsi aims to generate the

element of addiction among the population so that seasonal changes do not deem the usual

consumption levels vulnerable. If in case of unforeseen changes such as changing government

regulation, tax hikes and so forth, Pepsi can suffer by having to increase its price and

consequently losing its market share.

The most important threat is of course that posed by its premier competitor Coca-Cola, and in the

case of Pakistan, seasonally relevant drinks such as Roof-Afza and Jaam-e-Shireen (as is the case

in Ramadan). The rival list of ever increasing acquisitions, product lines, and marketing

campaigns is highly disadvantageous for Pepsi. Since Pepsi follows a push based supply chain

management system, it has to continuously penetrate its own market and reinforce consumption

among population. This serves the purpose of reminding people about the existence of Pepsi and

without such efforts the product would, quite simply, cease to exist. In such conditions Pepsi

maintains very profitable relationships with food franchises, especially in Pakistan.

Furthermore, all major marketing decisions are made by PepsiCo the parent company, and not

offspring branches or local franchises; any maneuver good for the global market may or may not

suit Pakistan. The associated need to mitigate this additional risk can be disadvantageous for

Pepsi.

Also in Pakistan, Pepsi stays afloat by sponsoring sporting events and thereby maintaining a high

market share. Since sporting fevers are quite possibly the heart of Pakistani customs, this is a

partnership Pepsi is sure to gain from for indefinite periods of time. However, this approach is

rather obsolete and fades in comparison to contemporary campaigns such as Coca-Cola’s Coke

Studio. If innovative and relevant campaigns are made as per consumer anticipation, Pepsi can

surely carry on its hold on the Pakistani market’s CSD pedestal.