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 - – increasing energy prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, 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 -
Strong track record of project management
– Potatoes Pepsico is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
Organizational Resilience of Potatoes Pepsico
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Potatoes Pepsico does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Ability to recruit top talent
– Potatoes Pepsico is one of the leading recruiters in the industry. Managers in the PepsiCo Peru Foods: More than Small Potatoes are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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 -
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.
Capital Spending Reduction
– Even during the low interest decade, Potatoes Pepsico has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Potatoes Pepsico, firm in the HBR case study PepsiCo Peru Foods: More than Small Potatoes needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Potatoes Pepsico needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Potatoes Pepsico has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Potatoes Pepsico needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
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.
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.
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.
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.