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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, wage bills are increasing, 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 -
High switching costs
– The high switching costs that Refresh Pepsi has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Refresh Pepsi 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.
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.
Diverse revenue streams
– Refresh Pepsi is present in almost all the verticals within the industry. This has provided firm in The Pepsi Refresh Project: A Thirst for Change 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.
Organizational Resilience of Refresh Pepsi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Refresh Pepsi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Refresh Pepsi in the sector have low bargaining power. The Pepsi Refresh Project: A Thirst for Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Refresh Pepsi to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Innovation driven organization
– Refresh Pepsi is one of the most innovative firm in sector. Manager in The Pepsi Refresh Project: A Thirst for Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
Need for greater diversity
– Refresh Pepsi 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 operating costs
– Compare to the competitors, firm in the HBR case study The Pepsi Refresh Project: A Thirst for Change 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 Refresh Pepsi 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Pepsi Refresh Project: A Thirst for Change, in the dynamic environment Refresh Pepsi has struggled to respond to the nimble upstart competition. Refresh Pepsi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Refresh Pepsi is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Refresh Pepsi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Refresh Pepsi to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Refresh Pepsi, firm in the HBR case study The Pepsi Refresh Project: A Thirst for Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Refresh Pepsi can use these opportunities to build new business models that can help the communities that Refresh Pepsi operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
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.
Developing new processes and practices
– Refresh Pepsi can develop new processes and procedures in Sales & Marketing 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.
Building a culture of innovation
– managers at Refresh Pepsi 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 Sales & Marketing segment.
Loyalty marketing
– Refresh Pepsi 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
– Refresh Pepsi 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 The Pepsi Refresh Project: A Thirst for Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Refresh Pepsi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Refresh Pepsi is facing challenges because of the dominance of functional experts in the organization. The Pepsi Refresh Project: A Thirst for Change 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Refresh Pepsi 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, The Pepsi Refresh Project: A Thirst for Change, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Refresh Pepsi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Pepsi Refresh Project: A Thirst for Change, Refresh Pepsi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
Consumer confidence and its impact on Refresh Pepsi demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
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.
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.
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.
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.
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.
Environmental challenges
– Refresh Pepsi 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. Refresh Pepsi can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
