PepsiCo, one of the world’s largest beverage and food companies, is presently focused on widen its business in Europe through the subsidiary PepsiCo International. In 2004, international sales accounted for $ 9,949 million - that is about one third of its group revenues. [Clark (European takeover targets), p. 31.]
Recently, the company has negotiated and realized several acquisitions in Europe. In May 2005, PepsiCo bought the leading German juice maker Punica Getraenke. [Mercer (Europe’s juice sector), p. 1.] In November 2005, it has reached agreement on the principal terms and conditions for the purchase of Sara Lee Corporation’s European nuts business in the Netherlands, Belgium and France. [PepsiCo International (Sara Lee Nuts Business), p. 1.]
With these investments, PepsiCo is driving an international expansion strategy. It aims growth outside the United States (U.S.) by adding local products to their global brands, until its traditional carbonated soft drink portfolio suffers from slower growth, and even some decline. [Mercer (Europe’s juice sector), p. 1.]
Using this situation as a background, it is interesting to analyze the market of PepsiCo. Who are the global competitors? What structure has the market, as the firm is seeking for growth?
The goals of this research are to deduct the market of PepsiCo and to measure its structure by using significant ratios.
First, PepsiCo will be briefly described and the contrast of a global and local view of the market will be compared. Afterwards the competitors of the firm will be named. The market will be split into the non-alcoholic beverage sector and the convenient food sector. Finally, the structure of these sectors will be measured by the concentration ratio and Hirschmann-Herfindahl-Index.
Table of Contents
- 1. Introduction
- 1.1 PepsiCo invests in Europe
- 1.2 Goals and Approach of This Study
- 2. The Boundary of the Market of PepsiCo
- 2.1 The Company PepsiCo
- 2.1.1 Overview
- 2.1.2 The Subsidiaries and its Products
- 2.2 Different Views of the Market of PepsiCo
- 2.2.1 Local View of the Market
- 2.2.2 Global View of the Market
- 2.3 Competitors
- 3. Structure of the Market of PepsiCo
- 3.1 Measurement of the Market Structure
- 3.2 Non-alcoholic Beverage Sector
- 3.3 Convenient Food Sector
- 3.4 Local View of the Non-alcoholic Beverage Sector using Official Market Definition
- 4. Conclusion
Objectives and Key Themes
This research paper aims to define the market of PepsiCo and analyze its structure using key ratios. It begins by describing PepsiCo and contrasting global and local market perspectives, followed by an identification of its competitors. The market is then divided into non-alcoholic beverages and convenient foods, with a structural analysis of each sector using concentration ratios and the Hirschmann-Herfindahl Index.
- Defining the market boundaries of PepsiCo, considering both global and local perspectives.
- Identifying and analyzing PepsiCo's major competitors in the beverage and food sectors.
- Structuring the market analysis into non-alcoholic beverages and convenient foods.
- Measuring market structure using concentration ratios and the Hirschmann-Herfindahl Index.
- Examining PepsiCo's international expansion strategy and its acquisitions.
Chapter Summaries
1. Introduction: This introductory chapter sets the stage for the analysis of PepsiCo's market. It highlights PepsiCo's significant investments in Europe, particularly the acquisitions of Punica Getraenke and the planned acquisition of Sara Lee's European nuts business. These acquisitions are framed within PepsiCo's broader international expansion strategy, driven by slower growth in its traditional carbonated soft drink portfolio. The chapter establishes the research goals: to define PepsiCo's market and measure its structure using relevant ratios. This sets the context for subsequent chapters that delve into the details of PepsiCo's market and competitive landscape.
2. The Boundary of the Market of PepsiCo: This chapter explores the complexities of defining PepsiCo's market. It starts with a description of PepsiCo itself, its history, and its four main subsidiaries (PBNA, PI, QFNA, and FLNA) and their respective product lines. The chapter then contrasts a "local" view of the market (focused on specific regions) with a "global" view (considering international competitors). The global view is ultimately adopted for the subsequent analysis due to PepsiCo's international scope and the prevalence of acquisitions of local competitors by larger international firms. This chapter is crucial in establishing the framework for the competitive analysis in subsequent sections.
Keywords
PepsiCo, market structure, concentration ratio, Hirschmann-Herfindahl Index, non-alcoholic beverages, convenient food, international expansion, competitors, acquisitions, global market, local market, market definition.
Frequently Asked Questions: PepsiCo Market Analysis
What is the main topic of this research paper?
This research paper analyzes the market of PepsiCo, focusing on defining its market boundaries and assessing its market structure. It examines both global and local perspectives and includes a detailed analysis of its competitive landscape within the non-alcoholic beverage and convenient food sectors.
What are the key objectives of this study?
The key objectives are to define PepsiCo's market boundaries (considering both global and local perspectives), identify and analyze its major competitors, structure the market analysis into relevant sectors (non-alcoholic beverages and convenient foods), measure market structure using concentration ratios and the Hirschmann-Herfindahl Index, and examine PepsiCo's international expansion strategy and acquisitions.
How is PepsiCo's market defined in this study?
The study explores the complexities of defining PepsiCo's market, contrasting a "local" view (focused on specific regions) with a "global" view (considering international competitors). Ultimately, a global view is adopted due to PepsiCo's international scope and the prevalence of acquisitions of local competitors by larger international firms.
Which sectors are analyzed in the market structure analysis?
The market structure analysis is divided into two main sectors: non-alcoholic beverages and convenient foods. Each sector is analyzed separately using concentration ratios and the Hirschmann-Herfindahl Index to measure market structure.
What are the key methods used to analyze the market structure?
The study uses concentration ratios and the Hirschmann-Herfindahl Index (HHI) to measure market structure in both the non-alcoholic beverage and convenient food sectors. These metrics help quantify the level of competition and concentration within each market.
What is the role of PepsiCo's acquisitions in this analysis?
PepsiCo's acquisitions, such as Punica Getraenke and the planned acquisition of Sara Lee's European nuts business, are highlighted as significant elements of its international expansion strategy, particularly in the context of slower growth in its traditional carbonated soft drink portfolio. The acquisitions are discussed within the broader framework of its global market strategy.
Who are PepsiCo's main competitors?
While specific competitors aren't explicitly listed, the study identifies the need to analyze PepsiCo's competitive landscape within both the non-alcoholic beverage and convenient food sectors. The global perspective adopted suggests that competition is analyzed from an international viewpoint.
What are the key chapters and their respective contents?
The report includes an introduction outlining the scope and objectives, a chapter defining PepsiCo's market boundaries (including a description of PepsiCo and its subsidiaries), a chapter analyzing the market structure, and a conclusion. Each chapter builds upon the previous one to provide a comprehensive analysis.
What are the key words associated with this research?
Keywords include: PepsiCo, market structure, concentration ratio, Hirschmann-Herfindahl Index, non-alcoholic beverages, convenient food, international expansion, competitors, acquisitions, global market, local market, market definition.
- Quote paper
- Andreas Penzkofer (Author), 2005, The Market of Pepsi / PepsiCo, Munich, GRIN Verlag, https://www.grin.com/document/48711
