Pepsi Must Diversify

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Pepsi Must Diversify
Pepsi The Choice of a New Strategy
2
Basic Purpose of Pepsi

• The core purpose of any organization is to
  increase the value of the organization for the
  stockholders.
• Pepsi must continually show growth.

3
Options For Growth

• Increase Market Share
• Introduce New Products
• Move into New Markets
• Diversify into non-beverage markets.

4
Options for Growth
Increase Market Share
Market Growth
Market Share
5
Options For Growth
Introduce New Products
Move into New Markets
New Products
Diversify
Old Products
Old Markets
New Markets
6
Reasons for Diversification

• Diversification will create secondary business
  units that can help Pepsi to increase revenues.
• All Pepsis eggs are in one basket.
• Opportunities to enter markets not dominated by a
  few big companies.

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Strategic Diversification

• Diversify into products that complement Pepsis
  beverage offerings.
• Snack Foods
• By strategically bundling Pepsi beverages with
  new product lines, Pepsi can create a feeling
  that one goes with the other and perhaps promote
  both items.

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Strategic Diversification

• Restaurants / Fast Food
• By entering the Fast Food market place, Pepsi
  will own the fountains and easily block entry of
  other beverages, without fear of anti-trust
  litigation.

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Summary

• Pepsi has no other option than to diversify into
  non-beverage markets.
• However, Pepsi should do so strategically and
  mindful of its core businesses interest.