I>BUSINESS –LEVEL STRATEGY: HOW TO COMPETE FOR ADVANTAGE
Answering the “who-what-why-and how” question.
Who will Pepsi serve?
According to industry estimates, approximately 58% of processed food is consumed by developing countries, owing to factors like a rapid increase in population in these countries. Furthermore, by 2050, it is expected that nearly 72% of the food consumption will happen in the developing countries supported by the fact that 37% of the world’s population currently lives in emerging countries like China and India.
Counting on these huge markets being created, companies like PepsiCo are increasing their investments in emerging countries and looking at expanding their businesses.
Over 2008–09, PepsiCo invested nearly $700 million in India and the company announced plans to invest another $500 million over 2010–12. The company also plans to invest nearly $3 billion in Mexico over 2011–16 to accelerate the growth of its beverage and snack brands including Sabritas and Gamesa.
What customer needs, wished, and desires will Pepsi satisfy?
While consumers across the world are increasingly favoring healthy foods, there is an equally rising importance of locally-sourced and locally-grown foods. Government bodies like the US Department of Agriculture (USDA) are also promoting local farmers and local produce through programs like
"Know Your Farmer, Know Your Food" that helps create new opportunities for farmers, ranchers, consumers and rural communities, and expand access to healthy food throughout the country.
On the other hand, consumers are also demanding more of local flavors than global ones.
Growing concerns over lifestyle-related health issues like obesity, diabetes, hypertension and chronic heart disease are encouraging consumers to make a shift in their food preferences. In the recent past, consumers have consciously made a preference shift towards healthy, fat-free and no-sugar options in processed foods.