1. Redhawks Consulting Pepsi’s Vietnam Challenge “It’s important to remember that results count. If you can’t get the results over the goal line, are you really a leader?” -Steven Reinemund, Chairman & CEO of Pepsi

2. Overview Key Concern SWOT Analysis Identification of Alternatives Key Success Factors Recommendation Phases of Implementation Timeline Summary

3. Key Concern To advise the executives of Pepsi in Vietnam on the future strategic direction of the company.

4. SWOT Analysis Strengths  Brand recognition  Market leader and producer of soft drinks  Initial market entry  Cover all regions of Vietnam  Snack food industry  Improvement of distribution channels  Offer environmentally friendly products  Product development Weaknesses  Lack of health benefits  Low consumption of soft drinks in Vietnam  200 product variations per year  Size of company prevents government funding Opportunities  Soft drinks popular for special occasions  1994 trade embargo  Increased consumption in rural areas  Technological advancements  Increased brand exposure in fast food restaurants  Refrigeration systems  Expansion creates jobs for Vietnamese Threats  Traveling between provinces  Coca-Cola  Domestic products  Consumer prefer healthy food items

5. Identification of Alternatives 1.Refrigeration System and Sanitation 2.Snack Food Industry 3.Youth Market Segmentation 4.Exportation to Cambodia 5.Maintain Current Position

6. Alternative 1: Refrigeration System and Sanitation Advantages – Health and well-being of consumer – Provide additional service – Easier to serve items Disadvantages – Installation costs – Maintenance costs

7. Alternative 2: Snack Food Industry Advantages – Early in product life cycle – Build upon Pepsi Brand Disadvantages – Research cost – Higher than average risk of failure

8. Alternative 3: Youth Market Segmentation Advantages – Half of population under age of 25 – Technological advancements increase – Nostalgia and brand recognition Disadvantages – Vast market: 46 million people – Diversity – Rural regions

9. Alternative 4: Exportation to Cambodia Advantages – 14 million people (Median age of 22) – Annual Growth: 6.4% – Build upon current distribution channel Disadvantages – Very costly Promotional Infrastructure – Language Barrier

10. Alternative 5: Maintain Current Position Advantages – Low cost – Customer loyalty – Maintain short-term market share Disadvantages – No expected growth – May lead to relative depletion of long-term market share

11. Key Success Factors SanitationSnack Foods Youth Market CambodiaSame Production Efficiency11122 Supply Chain Management 23222 Brand Image33322 Return of Investment13211 Total:710977

12. Recommendation Alternative 2: Snack Food Industry

13. Phases of Implementation I.Establish Implementation Team II.Market Research III.Product Development IV.Infrastructure and Organizational Development V.Integrated Marketing and Communications VI.Milestone Review VII.Expansion VIII.Long-term Planning

14. Phase I: Establish Implementation Team Time frame: Immediately upon approval Parties involved: – Vietnam Pepsi Soft drinks Snack food – Cultural specialist (anthropologist) – Pepsi Co. of North America – Research professionals

15. Phase II: Market Research Time Frame: 0-3 Months Analyze the following: – Market – Distribution Networks – Trends – Demographics – Psychographics Utilize focus groups

16. Phase III: Product Development Time Frame: 3-9 months Select which products to introduce Product differentiation Ex: Aloe Vera specialty drinks in Asia

17. Phase IV: Infrastructure & Organizational Development Time Frame: 3-9 months Distribution networks Export and Import processes Hire executives and management – North, Central, and Southern regions

18. Phase V: Integrated Marketing & Communications Time frame: 9 months – Ongoing Utilize current Pepsi marketing avenues: – Television advertising – Point of sale displays – Promotional campaigns Market as “fast, on-the-go food” School incentive program

19. Phase VI: Milestone Review Time frame: 12 months Establish review criteria – Market share – Sales (net profit) Re-evaluate every 3-6 months

20. Phase VII: Expansion Time Frame: Upon 1 st successful review Offer other products – As directed by research

21. Phase VIII: Long-Term Planning Time Frame: 10 years + Cambodia Horizontal integration Sector and distribution network

22. Timeline 03691215 Months + Phase I: Establish Implementation Team Phase II: Market Research Phase III: Product Development Phase IV: Infrastructure & Organizational Development Phase V: IMC Campaign Phase VI: Milestone Review Phase VII: Expansion Phase VIII: Long-term Planning

23. Redhawks Consulting Pepsi’s Vietnam Challenge “It’s important to remember that results count. If you can’t get the results over the goal line, are you really a leader?” -Steven Reinemund, Chairman & CEO of Pepsi