PepsiCo International Company Situational Analysis - Research Paper Example

International Marketing International Marketing International marketing is the use/utilization of principle of marketing by numerous countries with the aim of satisfying customer wants and needs and at the same time making profits. The situational analysis will focus on PepsiCo International Company. A worldwide company, that deals with the making and selling of soft drinks, juices, and fountain syrups. Its operations are centralized through Mirinda, Tropicana brand, 7UP, Pepsi in Middle East Europe, Asia, and Africa. Most of the company’s beverages are sold through franchised bottlers. Research indicates that the product discussed higher market share in European nations among other parts of the globe where a higher profit margin is reported (Grunig and Kuhn, 2008). For situational analysis, the company can use various methods. The following methods can are be utilized: Porter’s method, 5Cs and SWOT method of analysis. One of the best methods to be used in this situation is the 5Cs analysis. The 5Cs represents company, competitors, customers, collaborators, and climate. First, the company needs to evaluate its objectives, strategy, and capabilities. The evaluation of these elements will help the management determine how fit the organization fits the external environment. Evaluation of the company objectives and goals may include the analysis of organization visions, goals and the environment under which the organization is operating in to achieve its corporate goals. In addition, organization should assess marketing strategies to determine its efficiency and carry out necessary improvements (Hitt, Irel, and Hoskisson, 2007). The products produced should also be analyzed to dete5rmine whether they meet customer needs and expectations. Secondly, we will consider the competitors. Here we will check the position of a competitor in the market and the possible potential threats they may cause to the industry. The competitor analysis will help the management prepare against competition. The organization should conduct customer analysis to determine their needs that in return help the organization to achieve a higher market share. The analysis will help the management of the organization with the knowledge of whether the customer needs and wants are met. It will also help the organization determine the familiarity of the products to the customers, which in turn will determine the intensity of the advertisement. The management will also know the income of its customers, which will help them determine the different prices of their products. The fourth statement will analyze the collaborators. The collaborators of an organization include the agents, suppliers, distributors, and partners. The analysis will help the organization in getting new ideas of doing business. Lastly, we will analyze the business climate and environment. These environments include political and regulatory environment, economic environment, social, cultural environment, and technological environment. This analysis will help the organization in preparation of the different environments (Strydom, 2004). Pepsi Company plans to enter South African market; however, the political situation in this market is quite unstable. Due to this, many privately owned businesses have closed due to fear of losing their property. There has been also a drastic increase in uncertainty, which have led to investors reconsidering their investments to other countries. The instability has led to the loss of investor confidence, which is not a good indication for business. In South Africa, the most common beverage is Coca-Cola. The producer of the Coca-Cola beverage is the largest competitor of Pepsi. In addition, Coca-Cola Company has much invested in the country, and the residents are more familiar with coca cola products than they are with Pepsi products. The products are very famous among the citizens as it was also used during the two thousand and thirteen, world cup (Griffin, 2007). For many years, the Coca-Cola products have been in the market hence has a large market share. Majority residents of South Africa are low-income earners. More than sixty percent of the residents of South Africa are loyal to at least one cool drink brand. They have no certain pattern of buying drinks as they buy from large surface stores, convenience stores and vending machines. The youths in the country drink soft drinks for physiological and social reasons. Their drinking habits range from drinking every day to a few times in the year. According to the research, most youths buying behaviors of the product are largely influenced by advertisement. They also prefer sweet, fizzy, cheap cool drinks that are sold in plastic containers. Research conducted earlier indicates that other companies in South Africa producing soft drinks showed satisfaction. It was noted that there was slight differentiation in terms of the products produced by those companies (Fine, 1992). The main aim of internationalizing is increasing the market share as well as increasing the returns of the company. Increase in market share may help the company to diversify its market as well as diversify risks. Such acts may help the company expand their portfolio, which is the goal of every company. Another reason for internationalizing is to increase competitiveness of the organization. When an organization is diversified, it increases its competitiveness against its competitors as it is in a large geographical area. In addition, increasing competitiveness may help to improve the value of the company. Value can be created through related or unrelated internationalizing as long as the strategies enable the company’s mix of business to increase income while decreasing cost and at the same time implementing their respective business level strategies. Internationalizing helps, the company acquires more market power as compared to their competitors (Joseph, 2013). The comparative attractiveness of South Africa of its potential market can be assessed in various ways. It can be done through assessing of customer behavior. The company will be assessing whether the customers are satisfied with the products and their purchasing behavior. Through the uncertainty experienced in the market, the market is less attractive though the buying behavior of the customers is promising. The political and business environments are fast changing positively which have improved the condition of the business in the region. The future of businesses in the region is promising as compared to the current situation where businesses are struggling (Odougherty, 2007). Since Coca-Cola have largely invested in the region and customers are much familiar with their products, Pepsi need to carry out an intensive advertisement to gain market share. The advertisement will also help in creating customer awareness and at the same time improving the competitiveness between their competitors. The company should consider locating their organization at the central part of South Africa where business activities are high hence would enable increase sales (Brink and Berndt, 2008). Reference List Brink, A., and Berndt, A. (2008). Relationship marketing and customer relationship management. Lansdowne, South Africa, Juta. Di Gropello, E., Kruse, A., and Tandon, P. (2011). Skills for the labor market in Indonesia trends in demand, gaps, and supply. Washington, D.C., WorldBank.http://site.ebrary .com/id/10460980. Fine, S. H. (1992). Marketing the public sector: promoting the causes of public and nonprofit agencies. New Brunswick, U.S.A., Transaction Publishers. Griffin, R. W. (2007). Fundamentals of management: core concepts and applications. Boston, Mass, Houghton Mifflin. Grunig, R., and Kuhn, R. (2008). Process based strategic planning. Berlin, Springer. Hitt, M. A., Ireland, R. D., and Hoskisson, R. E. (2007). Strategic management: competitiveness and globalization; [concepts and classes]. Mason, Ohio [u.a.], Thomson South-Western. Joseph, C. (2007). Credit risk analysis: A tryst with strategic prudence. New Delhi, Tata McGraw-Hill. Joseph, C. (2013). Advanced credit risk analysis and management.. Odougherty, D. (2007). Consumer behaviour. Cape Town, Pearson Education South Africa. Strydom, J. (2004). Introduction to marketing. Cape Town, South Africa, Juta. Read More