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Managing Multinational Corp.
Pepsi in UK

Company History PepsiCo’s beverage business was founded at the turn of the century by Caleb Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi-Cola. Today consumers spend about $33 billion on Pepsi-Cola beverages. Brand Pepsi and other Pepsi-Cola products – including Diet Pepsi, Pepsi-One, Mountain Dew, Slice, Sierra Mist and Mug brands – account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $60 billion. Pepsi-Cola also offers a variety of non-carbonated beverages, including Aquafina bottled water, Fruitworks, and All Sport. Pepsi-Cola’s mission statement is to be the world's premier consumer product’s company focused on convenient foods and beverages. They seek to produce healthy financial rewards to investors as they provide opportunities for growth and enrichment to their employees, their business partners, and the communities in which they operate. And in everything they do they strive for honesty, fairness, and integrity. Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. Operations grew rapidly beginning in the 1950s. In addition to brands marketed in the United States, major products include Mirinda and Pepsi Max. Pepsi-Cola North America includes the United States and Canada. Key international markets include Argentina, Brazil, China, India, Mexico, Philippines, Saudi Arabia, Spain, Thailand and the United Kingdom. PepsiCo Beverages International also produces, sells and distributes Gatorade sports drinks as well as Tropicana and other juices internationally. In 1992 Pepsi-Cola formed a partnership with Thomas J. Lipton Co. Today Lipton is the biggest selling ready-to-drink tea brand in the United States. Pepsi-Cola also markets Frappuccino ready-to-drink coffee through a partnership with Starbucks. In 2001, SoBe became a part of Pepsi-Cola. SoBe manufactures and markets an innovative line of beverages including fruit blends, energy drinks, dairy-based drinks, exotic teas and other beverages with herbal ingredients. Outside the United States, Pepsi-Cola soft drink operations include the business of Seven-Up International. Pepsi-Cola beverages are available in about 160 countries and territories. PepsiCo provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. This includes some of the world's best-loved and most-recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. The United Kingdom's population in 2002 was nearly 60 million--the third-largest in the European Union and the 21st-largest in the world. Its overall population density is one of the highest in the world. Almost one-third of the population lives in England's prosperous and fertile southeast and is predominantly urban and suburban--with about 7.2 million in the capital of London, which remains the largest city in Europe. The United Kingdom's high literacy rate (99%) is attributable to universal public education introduced for the primary level in 1870 and secondary level in 1900. Education is mandatory from ages 5 through 16. About one-fifth of British students go on to post-secondary education. The United Kingdom has the fourth-largest economy in the world, is the second-largest economy in the European Union, and is a major international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. London ranks with New York as a leading international financial center. The United Kingdom is the fourth-largest market for U.S. goods exports after Canada, Mexico, and Japan and the sixth-largest supplier of U.S. imports after Canada, China, Mexico, Japan, and Germany. U.S. exports to the United Kingdom in 2002 totaled $37.4 billion, while U.S. imports from the U.K. totaled $42.2 billion. The United States has had a trade deficit with the United Kingdom since 1998, although the deficit was relatively small prior to last year. The United Kingdom is a large source of foreign tourists in the United States. The United States and the United Kingdom share the world's largest foreign direct investment partnership. U.S. investment in the United Kingdom reached $255.4 billion in 2002, while U.K. direct investment in the U.S. totaled $283.3 billion. This investment sustains more than 1 million American jobs.
SWOT Analysis Pepsi is a stable company with the ability to transfer it’s product to
UK. The strengths are many it’s personal resources and capabilities aloud it to develop a competitive advantage in a new market. Some examples of

such strengths include our patents in many soft drinks that promote new

development not just with in but with other companies. We have strong

brand names such as seven up. There is a good reputation with customers

that gives us brand recognition. Since we are an experience producer

there is and exclusive access to high grade in natural resources and favorable

access to distribution networks.

The absence of certain strengths are not long lived in Pepsi, Pepsi is a

fast learner and committed to new market taste. For Pepsi a weakness may

be the flipped into a strength. In entry levels with other countries there was

the issue of a large amount of manufacturing capacity. While this capacity

was not being used to it’s economies of scale maximum output This issue

was short lived by the partnership with Lipton. The new product catering to

local taste increased economies of scale and reduced cost. Opportunities are

always welcomed in Pepsi if there is an unfulfilled customer need , with the

arrival of new technologies, loosening regulation of established entry

barriers and with the removal of international trade barriers in U.K. Pepsi

is looking to establish a strong market share in U.K.

Threats may be encounter by the shifts in consumer taste and the

emergence of substitute products. To avoid this issue Pepsi is targeting its

marketing campaign in young people to create a new generation of Pepsi

consumers.

Entry Strategy

Pepsi’s capabilities are that it can bring it’s product to the market

faster than its competitors. Such capabilities are embedded in the routines

of its mission statement and way of doing business. The resources put in

place and know how are difficult to for competitors to replicate. Pepsis

ability to directly invest in U.K. gives it an advantage in maintaining the

highest level of quality. A Pepsi in U.K. will taste the same as a Pepsi in

the U.S.

The transfer of resources including capital, technology and personnel.

The direct ownership will provide a high degree of control in the operations

and the ability to better know the customers and competitive environment.

With this in mind we can be better prepared for the potential in limited sales.

Pepsis trade mark makes is easy for less product adaptation that would be

required if it was not a know company.

By having a direct investment the strategic entry mode would allow

Pepsi to create a competitive advantage in specific activities. The goal of

this activities is to create a plan that exceeds the cost of providing the

product and thus generating a profit. With the control of logistics that

include receiving, ware housing and inventory of resources the use of

current technology in production and updating with new methods in

increasing economies of scale.

The Operations of Pepsi in U.K. will range from daily sport events

and sponsorship of local programs. These events will expose Pepsi to its

name brand and trade mark. Thus increasing its market share in acceptance

as a local drink. With the coordination of outbound logistics that are the

activities in getting the finish product to the customer, including the channel

distribution in selected sport stadiums and events. By being the sole supplier

in certain food industries and giving discounts and incentives . Not only will

Pepsi be more affordable but sales would increase. Pepsi’s services

activities are those that maintain and enhance the product’s value including

customer support and repair services.

Any of all these primary activities are vital in developing a

competitive advantage in direct investment. For example, logistics activities

which are critical for Pepsis distribution services. And service activities can

be the key focus for offering on-site maintenance contracts and equipment

control this means that there would always be a Pepsi drink stock in local

stores and events. This would in time make our market share grow with the

wide availability of our products.

Marketing Strategies Pepsi is known in the marketing world as a convenience product, one that is purchased without much consideration. Providing quality products at the lowest possible price has always been one of the main concerns of Pepsi in UK. For example, in some parts of the country a two-liter bottle of Pepsi cost 99 cents a decade ago and still does today. One of the ways Pepsi has been able to assist this effort is by expanding their use of inexpensive and recyclable plastic bottles. The soft drink industry today is confronted with a bewildering array of price increases. Expenditures for labor, ingredients, transportation and more all continue to rise. The cost of aluminum alone has increased dramatically since last year. However, Pepsi have been cutting overhead and re-engineering their manufacturing process in order to keep their prices competitive. It is their policy to limit any price increases to the retail trade to the lowest possible extent. Distribution of Pepsi in UK can be arranged to different category including wholesaler, retailer, also can sell directly to consumers. Pepsi already have their vending machine in a lot of public place like park, hospital, hotel, school etc. Also Pepsi have been saved a lot of money from transaction cost, labor cost and exporting tax by having their factory in UK. Pepsi-Cola provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. This includes some of the world's best-loved and most-recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. For the future year, the primary target of Pepsi in UK is teenagers who prefer group activities, express themselves in their own ways and have similar like. Pepsi, the leader in soft drink market with the outstanding image, realized the standpoint of worldwide marketing strategies, namely music marketing and sport marketing which are appreciated by teenagers around the world. For the sole worldwide strategy, particularly music strategy, Pepsi has been continuously presenting superstars, e.g. Michael Jackson, pink, Madonna, Michael J. Fox, Spice Girls Janet Jackson, Ricky Martin, Robbie Williams, Halle Berry and the most recently, Britney Spears. On October 16, 2003, Apple and Pepsi-Cola announced a historic promotion to legally give away 100 million free songs to Mac® and Windows PC users from Apple’s iTunes Music Store. Years ago, Pepsi's five year deal with Major League Baseball gives them exclusive rights to use baseball's trademarks and team logos in all advertising, packaging, merchandising, and promotions. Pepsi has forged a reputation as appealing to the teenage audience, which is why Major League Baseball believes its deal with Pepsi will attract a younger audience, which was partially lost due to aggressive marketing campaigns by pro football and basketball, as well as the 1994 strike. For this year, Pepsi holds various marketing activities and promotion, namely providing football fans an opportunity to get closer to superstar soccer players like David Beckham, and experience the Pepsi's unique soccer adventures, under the sport marketing strategy. The Pepsi Company has announced the May 1 launch of a summertime promotion, "Play for a Billion," in which consumers will compete for large cash prizes, including a potential ultimate payout of $1 billion in September. Pepsi has always taken the lead in developing new products, has always taken more risks, acted rapidly, also was always developing new advertising ideas and relied on finding new markets, especially in foreign countries. Pepsi followed the marketing concept by offering products that meet consumer needs in order to gain market share. For instance, in UK, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image. Pepsi responded by developing Pepsi Max. These companies in trying to capture market share have relied on the development of new products. At every level of Pepsi-Cola Company, they take great care to ensure that the highest standards are met in everything they do. In their products, packaging, marketing and advertising, they strive for excellence because their consumers expect and deserve nothing less. Pepsi-Cola promise to work toward continuous improvement in all areas of their organization. All Pepsi cans and bottles are imprinted with a freshness date, which is a date code that tells their consumers the soft drink is fresh. A final quality check ensures that the package is properly filled, sealed and labeled. At every step of Pepsi manufacturing and bottling process, strict quality controls are followed to ensure that Pepsi-Cola products meet the same high standards of quality that consumers have come to expect and value from us. Pepsi also follow strict quality control procedures during the manufacturing and filling packages. Each bottle and can undergoes a thorough inspection and testing process. Containers are then rinsed and quickly filled through a high-speed, state-of-the-art process that helps prevent any foreign material from entering the product. Additional quality control measures help to ensure the integrity of Pepsi-Cola products throughout the distribution process, from warehouse to store shelf.

Conclusion: Pepsi has built a reputation around the world as a major player in the soft drink market as well as the leader in the snack food industry. This has been done by creating a wholesome environment for their customers all the while maintaining its integrity. Currently they are facing stiff competition from Coca-Cola, but with their various marketing ventures as well as the selling of their restaurant franchises, Pepsi is poised to give Coke a definite battle in the future as to which cola consumers want. PepsiCo, Inc. is currently one of the most successful consumer products company in the world with annual revenues exceeding $30 billion and has more than 480,000 employees. With their over all mission of increasing the value of their shareholders' investments through sales growth, investments and financial activities. PepsiCo believes their success depends upon the quality and value of their products by providing a safe, whole some, economically efficient and a healthy environment for their customers; and by providing a fair return to their investors while maintaining the highest standards of integrity Pepsi-Cola Company is a major division of PepsiCo's corporate structure. Pepsi-Cola Company now produces and markets a wide range of beverages to retail, restaurants and food services in more than 191 countries and territories around the world and brings in a annual revenue of $10 billion. There are 200 plants in the US and Canada, as well as, 530 plants throughout the rest of the world, that produces Pepsi-Cola's beverages. Today, every one of PepsiCo workers strives to maintain the same high standards of quality and taste that have made Pepsi so popular the world over.