S. marketplace-(Wright, 292). Pepsi's goal is to pump up sales and profits by taking advantage of some synergies unavailable to its rival Coke and thereby boosting Pepsi's lagging share price.
When discussing the external environment and the opportunities faced to PepsiCo, Coke becomes a major factor. As Pepsi and Coke continue their cola wars, each compete and grab as much of the market as allowed by the other. Whenever an opportunity is available to differentiate the two, it is rare for one to allow it to pass. However, Coke passed on the opportunity to merge with the owner of the most popular sports drink, Quaker Oats. "The Gatorade brand whet PepsiCo's appetite, with its 80% command of the US sports drink market- (http://www.hoovers.com/co/capsule/7/0,2163,11237,00.html). PepsiCo could not resist, and on August 2, 2001 it completed its merger with Quaker Oats Company, creating a $25 billion food and beverage entity. .
To borrow the comparison from the Original BCG Framework, Frito-Lay would be considered PepsiCo's "cash cow-. A cash cow is a business unit that has a large share of a slow-growth market. Frito-Lay is the largest snack-food maker in the world. The snack-food king is the father of some of the most popular brands in the U.S. including Cheetos, Doritos, Fritos, Lay's, Ruffles, Santitas, SunChips, Rold Gold, and Tostitos. Because of Frito-Lays success, PepsiCo has the cushion available to venture into other companies, as they did with Quaker Oats. Frito-Lay comprises for more than 50 percent of PepsiCo's sales. When the market is running smoothly, Frito-Lay is considered PepsiCo's cash cow, however if the market is not, PepsiCo could take a turn for the worst quickly. If this were to happen, PepsiCo would have to divest from some of its lesser known, developing products, causing a slow downturn of profits in the long run.
Corporate-Level Strategy.
Recent Acquisitions- 2001 Quaker Oats (including Gatorade) for 13.
