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 - – talent flight as more people leaving formal jobs, geopolitical disruptions, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, technology disruption, supply chains are disrupted by pandemic , increasing energy prices,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
Successful track record of launching new products
– Potatoes Pepsico has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Potatoes Pepsico has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
Effective Research and Development (R&D)
– Potatoes Pepsico has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study PepsiCo Peru Foods: More than Small Potatoes - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Analytics focus
– Potatoes Pepsico is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rosabeth Moss Kanter, Rakesh Khurana, Rajiv Lal, Matthew Bird can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
Diverse revenue streams
– Potatoes Pepsico is present in almost all the verticals within the industry. This has provided firm in PepsiCo Peru Foods: More than Small Potatoes case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Potatoes Pepsico is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study PepsiCo Peru Foods: More than Small Potatoes can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study PepsiCo Peru Foods: More than Small Potatoes, it seems that the employees of Potatoes Pepsico don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Potatoes Pepsico has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - PepsiCo Peru Foods: More than Small Potatoes should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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.
Lack of clear differentiation of Potatoes Pepsico products
– To increase the profitability and margins on the products, Potatoes Pepsico needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
Loyalty marketing
– Potatoes Pepsico has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Potatoes Pepsico has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study PepsiCo Peru Foods: More than Small Potatoes - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Potatoes Pepsico to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Potatoes Pepsico can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
Developing new processes and practices
– Potatoes Pepsico can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Potatoes Pepsico can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
Building a culture of innovation
– managers at Potatoes Pepsico can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Potatoes Pepsico can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Potatoes Pepsico to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 -
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.
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.
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.
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.
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.
Environmental challenges
– Potatoes Pepsico needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Potatoes Pepsico can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Potatoes Pepsico in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Potatoes Pepsico can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study PepsiCo Peru Foods: More than Small Potatoes .
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.
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.
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.
