Answer to Question #189642 in Management for Shaun G

Question

Determine the approach to environmental scanning PepsiCo is using and provide reasons for your answer.

Answer 1

1) Determine the approach to environmental scanning PepsiCo is using and provide reasons for your answer.

PepsiCo is a beverage manufacturing company. Environmental scanning is the process where an organization checks for the internal and external threats that can negatively impact their business and consumers.

The environmental scanning PepsiCo is using is referred to as SWOT Analysis. SWOT stands for Strength Weaknesses Opportunities and Threats.

Through SWOT Analysis PepsiCo is able to identify

a) Strengths are considered as internal strategic factors that helps an organization to achieve it's goals such as strong brand image, focusing on research and development, dominance in market positions, and extensive global distribution.

b) Weaknesses considered as internal strategic factors that require concern such as overdependence on domestic market such as large supermarkets e.g WalMart in the United States, Product recalls and tap water scandal "Aquafina", in some cases PepsiCo is perceived as unhealthy and finally high cost of volatile raw materials and foreign cash.

c) Opportunities are external strategic factors that help improve a business organization. The opportunities include business diversification, penetration of market into developing countries and global alliance with complementary businesses.

d) Threats are external strategic factors that can reduce business performance. They include aggressive competition, environmentalism which should be addressed through recycling and healthy lifestyle trend which could scare away consumers who only look forward to well being of health.