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PepsiCos Diversification Strategy in 2018

PepsiCo was the worlds largest snack and beverage company with 2017 net revenues of approximately $63.5 billion. The companys portfolio of businesses in 2018 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Capn Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the lineup 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, Stacys pita chips and Sabra hummus might make a nice snack, and Doritos and a Mountain Dew might be part of someones lunch. In 2018, PepsiCos business lineup included 22 $1 billion global brands.

The companys top managers were focused on sustaining the impressive performance that had been achieved since its restructuring through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. Newly introduced products such as Mountain Dew Ice, Doritos Blaze tortilla chips, Sweet Potato Sun Chips, LIFEWTR functional waters, Lemon Lemon sparkling lemonade, and the 1893 premium line of flavored colas accounted for 15%-20% of all new growth in recent years. 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.

In addition to focusing on strategies designed to deliver revenue and earnings growth, the company maintained an aggressive share repurchase and dividend policy, with a planned $7 billion returned to shareholders in 2018 through share repurchases of $2 billion and dividends of approximately $5 billion. The company bolstered its cash returns through carefully cons

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