Question 3 (7 marks)

Use the Ansoff matrix to discuss the strategic choices relevant to Pepsicos competitive rivalry

The Case

PepsiCo was the worlds largest snack and beverage company, with 2013 net revenues of approximately $66.4 billion. The companys portfolio of businesses in 2014 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft-drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Cap n Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the line-up as highly complementary since most of its products could be consumed together. For example, Tropicana orange juice might be consumed during breakfast with Quaker Oatmeal, and Doritos and a Mountain Dew might be part of someones lunch. In 2014, PepsiCos business line-up included 22 $1 billion global brands. The companys top managers were focused on sustaining the impressive performance through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. New product innovations that addressed consumer health and wellness concerns were important contributors to the companys growth, with PepsiCos better-for-you and good-for-you products becoming focal points in the companys new product development initiatives.