PepsiCo Peru Foods: More than Small Potatoes SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of PepsiCo Peru Foods: More than Small Potatoes
For best results, this case should be printed in colorJorge Tarasuk, VP of Operations and Supply Chain for PepsiCo South America Foods, and his team had worked for 10 years to realize their dream of creating an agro research center in Peru that could provide more productive and healthier varieties of potatoes for the Frito-Lay businesses in PepsiCo's tropical regions, including Brazil, China, Egypt, India, Thailand, and Vietnam, where much of its future growth would come. They were denied several times but kept the idea alive through other projects until conditions presented themselves. But now that they had secured initial funding for the center, the hard work would begin.
Swot Analysis of "PepsiCo Peru Foods: More than Small Potatoes" written by Rosabeth Moss Kanter, Rakesh Khurana, Rajiv Lal, Matthew Bird includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Potatoes Pepsico facing as an external strategic factors. Some of the topics covered in PepsiCo Peru Foods: More than Small Potatoes case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the PepsiCo Peru Foods: More than Small Potatoes casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of PepsiCo Peru Foods: More than Small Potatoes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PepsiCo Peru Foods: More than Small Potatoes case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Potatoes Pepsico, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Potatoes Pepsico operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of PepsiCo Peru Foods: More than Small Potatoes can be done for the following purposes –
1. Strategic planning using facts provided in PepsiCo Peru Foods: More than Small Potatoes case study
2. Improving business portfolio management of Potatoes Pepsico
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Potatoes Pepsico
Strengths PepsiCo Peru Foods: More than Small Potatoes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Potatoes Pepsico in PepsiCo Peru Foods: More than Small Potatoes Harvard Business Review case study are -
Training and development
– Potatoes Pepsico has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in PepsiCo Peru Foods: More than Small Potatoes Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Leadership & Managing People field
– Potatoes Pepsico is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Potatoes Pepsico in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the PepsiCo Peru Foods: More than Small Potatoes Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Leadership & Managing People industry
– PepsiCo Peru Foods: More than Small Potatoes firm has clearly differentiated products in the market place. This has enabled Potatoes Pepsico to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Potatoes Pepsico to invest into research and development (R&D) and innovation.
Learning organization
- Potatoes Pepsico is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Potatoes Pepsico is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PepsiCo Peru Foods: More than Small Potatoes Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Potatoes Pepsico digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Potatoes Pepsico has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Potatoes Pepsico has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in PepsiCo Peru Foods: More than Small Potatoes HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Potatoes Pepsico in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Potatoes Pepsico is one of the most innovative firm in sector. Manager in PepsiCo Peru Foods: More than Small Potatoes Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Potatoes Pepsico are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Potatoes Pepsico in the sector have low bargaining power. PepsiCo Peru Foods: More than Small Potatoes has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Potatoes Pepsico to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Potatoes Pepsico has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Potatoes Pepsico to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses PepsiCo Peru Foods: More than Small Potatoes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PepsiCo Peru Foods: More than Small Potatoes are -
High cash cycle compare to competitors
Potatoes Pepsico has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the PepsiCo Peru Foods: More than Small Potatoes HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Potatoes Pepsico has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study PepsiCo Peru Foods: More than Small Potatoes that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case PepsiCo Peru Foods: More than Small Potatoes can leverage the sales team experience to cultivate customer relationships as Potatoes Pepsico is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Potatoes Pepsico needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Potatoes Pepsico has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study PepsiCo Peru Foods: More than Small Potatoes, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Potatoes Pepsico supply chain. Even after few cautionary changes mentioned in the HBR case study - PepsiCo Peru Foods: More than Small Potatoes, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Potatoes Pepsico vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Potatoes Pepsico has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Rosabeth Moss Kanter, Rakesh Khurana, Rajiv Lal, Matthew Bird suggests that, Potatoes Pepsico is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study PepsiCo Peru Foods: More than Small Potatoes has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Potatoes Pepsico 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Potatoes Pepsico is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Potatoes Pepsico needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Potatoes Pepsico to focus more on services rather than just following the product oriented approach.
Opportunities PepsiCo Peru Foods: More than Small Potatoes | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study PepsiCo Peru Foods: More than Small Potatoes are -
Buying journey improvements
– Potatoes Pepsico can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. PepsiCo Peru Foods: More than Small Potatoes suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Potatoes Pepsico has opened avenues for new revenue streams for the organization in the industry. This can help Potatoes Pepsico to build a more holistic ecosystem as suggested in the PepsiCo Peru Foods: More than Small Potatoes case study. Potatoes Pepsico can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Potatoes Pepsico in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Potatoes Pepsico can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Potatoes Pepsico can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Potatoes Pepsico to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Potatoes Pepsico in the consumer business. Now Potatoes Pepsico can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Potatoes Pepsico to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Potatoes Pepsico to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Potatoes Pepsico can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Potatoes Pepsico can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Potatoes Pepsico is facing challenges because of the dominance of functional experts in the organization. PepsiCo Peru Foods: More than Small Potatoes case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Potatoes Pepsico can use these opportunities to build new business models that can help the communities that Potatoes Pepsico operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Potatoes Pepsico can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, PepsiCo Peru Foods: More than Small Potatoes, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Potatoes Pepsico to increase its market reach. Potatoes Pepsico will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats PepsiCo Peru Foods: More than Small Potatoes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PepsiCo Peru Foods: More than Small Potatoes are -
Increasing wage structure of Potatoes Pepsico
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Potatoes Pepsico.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Potatoes Pepsico will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Potatoes Pepsico business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Potatoes Pepsico high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Potatoes Pepsico can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Potatoes Pepsico needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Potatoes Pepsico with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study PepsiCo Peru Foods: More than Small Potatoes, Potatoes Pepsico may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Potatoes Pepsico is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Potatoes Pepsico.
Stagnating economy with rate increase
– Potatoes Pepsico can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Potatoes Pepsico in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of PepsiCo Peru Foods: More than Small Potatoes Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study PepsiCo Peru Foods: More than Small Potatoes needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study PepsiCo Peru Foods: More than Small Potatoes is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study PepsiCo Peru Foods: More than Small Potatoes is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of PepsiCo Peru Foods: More than Small Potatoes is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Potatoes Pepsico needs to make to build a sustainable competitive advantage.