5.

2 Pepsi VRIO analysis

Core Competitive
Valuable Rare Inimitable Organized
Competency Advantage
Extensive
Temporary
Product Yes Yes No Yes
advantage
Range
Marketing Sustained
Yes Yes Yes Yes
Strategies advantage
Brand Sustained
Yes Yes Yes Yes
Reputation advantage
Temporary
Global Reach Yes No No Yes
advantage
Supply Chain Temporary
Yes No No Yes
Management advantage
Human
Temporary
Resource Yes Yes No Yes
advantage
Management
Technologica Temporary
Yes Yes No Yes
l Investments advantage

Extensive Product Range: PepsiCo’s extensive product range, which includes leading global
brands such as Pepsi, Doritos, Lays, Tropicana, and Quaker Oats, is a significant strength. The
company has broadened its range by introducing new food and nutrition products, but it
competes with other expansive portfolios like Coca Cola and Nestle.
Marketing Strategies: PepsiCo allocates substantial resources to advertising, with outlays of $4.7
billion and $4.6 billion in 2019 and 2020 respectively. The company predominantly employs
digital channels for advertising and promotional activities. This investment is a crucial catalyst
for demand, revenue expansion, and gaining a competitive edge.
Brand Reputation: PepsiCo upholds a robust brand reputation through high-quality products,
consumer-friendly pricing tactics, and philanthropic endeavors. This reputation is a significant
source of enduring competitive edge.
Global Reach: PepsiCo’s international reach, with products available in 200 countries through a
vast distributor network, offers a competitive edge. However, this edge is constrained as
competitors like Coca Cola also have a strong international reach. To preserve market share,
PepsiCo consistently invests in advertising and innovation.
Supply Chain Management: PepsiCo boasts one of the industry’s top supply chain and
distribution networks, sourcing raw materials worldwide. Essential materials include sugar from
India, Thailand, and Brazil, palm oil from Indonesia, Malaysia, and Mexico, and soy from
Brazil. However, this efficiently managed supply chain only provides a transient competitive
edge as competitors also invest heavily in their supply chains and digital transformation.
Human Resource Management: PepsiCo emphasizes HR management, recruiting, nurturing, and
retaining high-quality talent. As of 2020, the company had a workforce of 291,000, with
approximately 25% female employees and 41% female employees in managerial positions. The
company’s culture of diversity and inclusion enhances employee satisfaction and stimulates
innovation. However, this HR capital only provides a transient competitive edge as the industry
environment is highly competitive, and other companies also invest heavily in maintaining an
innovative organizational culture and a skilled workforce.
Technological Investments: PepsiCo invests heavily in digital technology to enhance business
processes, supply chain, production systems, and customer engagement. This includes digital
advertising, data analytics, and the use of digital channels for marketing, sales, and distribution.
Social media platforms like Facebook and YouTube are employed for advertising and user
interaction, with a significant emphasis on video advertising. PepsiCo also invests in research
and development, allocating $719 million in 2020, to enhance its product range and develop new
efficiency-enhancing technologies. However, this technological advantage only provides a
transient competitive edge as competitors like Coca Cola and Nestle also invest heavily in
technology. To fortify its competitive edge, PepsiCo needs to maintain a high focus on
technology and innovation.

Pratap, A. (2023) Pepsi Vrio Analysis, CH Blog. Available at: https://cheshnotes.com/pepsi-vrio-