PepsiCo's Diversification in $2022$

This case is ideal for a module on corporate diversification strategies. The case teaches well because the majority of

students are likely to be regular consumers of PepsiCo's products. Class debate should center on whether PepsiCo's

diversification strategy has contributed to increased shareholder value. Analysis of the case data will lead students to

conclude that PepsiCo's top managers have built a fine collection of businesses capable of delivering impressive earnings

and cash flows. Students will recognize the success PepsiCo management has achieved in exploiting strategic fit

opportunities across business units, acquiring new businesses to strengthen the overall quality of its business line up$,$ and

increasing revenues and earnings in international markets. The issue in $2022$ is what further modifications to Pepsico's

corporate strategy are needed to increase shareholder value.

Before completing these exercises, be sure to read the Pepsico Case.

What is your assessment of the long$-$term attractiveness of the industries represented in PepsiCo's business portfolio?

Select "yes" for those statements below that are accurate and choose $"$no$"$ for those that are not.

The company's snacks and beverages offer more growth potential and are more profitable than the overall food and beverage

industry.

All divisions focused on snack foods and beverages have generated consistent revenue growth between $2019$ and $2021.$

$]$

Only Quaker Foods North America and Latin America have experienced inconsistent revenues and operating profits during the $2019-$

$2020$ period.

$($Click to select$)$

The industries in which PepsiCo competes are unattractive.

$]$

The carbonated soft drink industry is highly mature with low single$-$digit growth in overall demand, but total operating profits remain

quite healthy.

$]$

The product categories of flavored grains, ready$-$to$-$drink coffees, hot cereals, and other breakfast products are rated as unattractive.

The food and beverage categories are attractive to highly attractive.

Flavored grains, ready$-$to$-$eat cereals, other breakfast products, and hot cereals have some appealing characteristics such as strategic

fit with other PepsiCo$/$Quaker products.

The food and beverage categories are the least attractive of PepsiCo's business portfolio.