The Pepsi Refresh Project: A Thirst for Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Pepsi Refresh Project: A Thirst for Change
In 2010, for the first time in 23 years, PepsiCo did not invest in Superbowl advertising for its iconic brand. Instead, the company diverted this $20 million to the social media-fueled Pepsi Refresh Project: PepsiCo's innovative cause-marketing program in which consumers submitted ideas for grants for health, environmental, social, educational, and cultural causes. Consumers voted for their favorite ideas, and PepsiCo funded the winners with grants ranging from $5,000 to $250,000. The case highlights the benefits and risks of traditional branding and social media branding, including a discussion of how the Pepsi Refresh Project fits with Pepsi's previous brand positioning. The case discussion focuses on how the brand team should evaluate the initiative's return on investment (from sales to social media engagement), whether they should continue the initiative for 2011, and whether Pepsi is the right brand for this kind of initiative.
Swot Analysis of "The Pepsi Refresh Project: A Thirst for Change" written by Michael I. Norton, Jill Avery includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Refresh Pepsi facing as an external strategic factors. Some of the topics covered in The Pepsi Refresh Project: A Thirst for Change case study are - Strategic Management Strategies, Financial management, Market research, Product development, Public relations, Risk management, Sales, Social platforms and Sales & Marketing.
Some of the macro environment factors that can be used to understand the The Pepsi Refresh Project: A Thirst for Change casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, supply chains are disrupted by pandemic , increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of The Pepsi Refresh Project: A Thirst for Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Pepsi Refresh Project: A Thirst for Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Refresh Pepsi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Refresh Pepsi 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 The Pepsi Refresh Project: A Thirst for Change can be done for the following purposes –
1. Strategic planning using facts provided in The Pepsi Refresh Project: A Thirst for Change case study
2. Improving business portfolio management of Refresh Pepsi
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Refresh Pepsi
Strengths The Pepsi Refresh Project: A Thirst for Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Refresh Pepsi in The Pepsi Refresh Project: A Thirst for Change Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Refresh Pepsi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Refresh Pepsi 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.
Learning organization
- Refresh Pepsi 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 Refresh Pepsi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Pepsi Refresh Project: A Thirst for Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the The Pepsi Refresh Project: A Thirst for Change 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.
Superior customer experience
– The customer experience strategy of Refresh Pepsi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Refresh Pepsi 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 The Pepsi Refresh Project: A Thirst for Change - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– The Pepsi Refresh Project: A Thirst for Change firm has clearly differentiated products in the market place. This has enabled Refresh Pepsi to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Refresh Pepsi to invest into research and development (R&D) and innovation.
Training and development
– Refresh Pepsi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Pepsi Refresh Project: A Thirst for Change 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.
Highly skilled collaborators
– Refresh Pepsi 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 The Pepsi Refresh Project: A Thirst for Change HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Refresh Pepsi 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 Michael I. Norton, Jill Avery 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.
Ability to recruit top talent
– Refresh Pepsi is one of the leading recruiters in the industry. Managers in the The Pepsi Refresh Project: A Thirst for Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Refresh Pepsi 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
– Refresh Pepsi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Refresh Pepsi 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.
Weaknesses The Pepsi Refresh Project: A Thirst for Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Pepsi Refresh Project: A Thirst for Change are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Pepsi Refresh Project: A Thirst for Change, is just above the industry average. Refresh Pepsi needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study The Pepsi Refresh Project: A Thirst for Change 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 The Pepsi Refresh Project: A Thirst for Change can leverage the sales team experience to cultivate customer relationships as Refresh Pepsi is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Refresh Pepsi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Pepsi Refresh Project: A Thirst for Change can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Refresh Pepsi 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.
Products dominated business model
– Even though Refresh Pepsi 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 - The Pepsi Refresh Project: A Thirst for Change should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael I. Norton, Jill Avery suggests that, Refresh Pepsi 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.
Slow decision making process
– As mentioned earlier in the report, Refresh Pepsi has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Refresh Pepsi even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Refresh Pepsi 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Refresh Pepsi 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.
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 Refresh Pepsi supply chain. Even after few cautionary changes mentioned in the HBR case study - The Pepsi Refresh Project: A Thirst for Change, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Refresh Pepsi vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As The Pepsi Refresh Project: A Thirst for Change HBR case study mentions - Refresh Pepsi takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities The Pepsi Refresh Project: A Thirst for Change | 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 The Pepsi Refresh Project: A Thirst for Change are -
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. Refresh Pepsi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Refresh Pepsi can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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 Refresh Pepsi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Refresh Pepsi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Refresh Pepsi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Refresh Pepsi 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 Refresh Pepsi to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Refresh Pepsi 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. Refresh Pepsi 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.
Better consumer reach
– The expansion of the 5G network will help Refresh Pepsi to increase its market reach. Refresh Pepsi 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.
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 Refresh Pepsi 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Refresh Pepsi 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.
Buying journey improvements
– Refresh Pepsi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Pepsi Refresh Project: A Thirst for Change 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 Refresh Pepsi has opened avenues for new revenue streams for the organization in the industry. This can help Refresh Pepsi to build a more holistic ecosystem as suggested in the The Pepsi Refresh Project: A Thirst for Change case study. Refresh Pepsi 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 Refresh Pepsi in the consumer business. Now Refresh Pepsi can target international markets with far fewer capital restrictions requirements than the existing system.
Threats The Pepsi Refresh Project: A Thirst for Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Pepsi Refresh Project: A Thirst for Change are -
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 Refresh Pepsi in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Refresh Pepsi 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 The Pepsi Refresh Project: A Thirst for Change .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Refresh Pepsi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Refresh Pepsi is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Refresh Pepsi 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.
Regulatory challenges
– Refresh Pepsi 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 Sales & Marketing industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Refresh Pepsi in the Sales & Marketing industry. The Sales & Marketing 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.
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 Refresh Pepsi.
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.
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. Refresh Pepsi 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.
Technology acceleration in Forth Industrial Revolution
– Refresh Pepsi has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Refresh Pepsi needs to keep up with the evolution of technology in the Sales & Marketing 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.
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. Refresh Pepsi needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Refresh Pepsi business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of The Pepsi Refresh Project: A Thirst for Change 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 The Pepsi Refresh Project: A Thirst for Change 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 The Pepsi Refresh Project: A Thirst for Change 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 The Pepsi Refresh Project: A Thirst for Change 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 The Pepsi Refresh Project: A Thirst for Change 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 Refresh Pepsi needs to make to build a sustainable competitive advantage.