Mergers, acquisition and international strategies.
the year 1932. The two companies then joined together in the form of a merger to create PepsiCo
in 1945. The company kept expanding its operations and increasing its products. In 1977, PepsiCo
acquired Pizza Hut Inc. which was Pizza Company. The company later acquired different
companies. For instance, it acquired Tropicana products in 1998, acquired South Beach Beverage
Company in 2000, Quaker later in 2001, Naked Juice Company in 2006 and the Wimm-Bill-Dann
company in 2010. PepsiCo Inc. is an American based multinational corporation but has its
branches in different parts of the world (PepsiCo, 2014).
PepsiCo Inc. has been able to expand and improve their operations through its mergers and
acquisitions. The best merger decision that the company has done in years was the merger with
Quaker in 2001. This acquisition gave the company control of Quaker’s products such as the sports
drink Gatorade. The merger nearly doubled the company’s shares of the noncarbonated market
which put them in front of Coca-Cola by 13 percent. The merger with Quaker significantly
increased PepsiCo’s market share since Gatorade which is one of the bestselling sports drinks. As
a result, PepsiCo increased its revenues by more than 20 percent from noncarbonated products.
Due to the financial impact that the merger brought to the company, it is considered to be the best
merger decision that PepsiCo Inc. has made (Gabriel, 2013).
The strategy employed by the company was to supply a product that would beat Coca-
Cola’s Powerade. The merger was successful as the revenue of Gatorade surpasses that of
Powerade with more than $300 million. The benefit that Powerade has is the price. Although the
two competing products have the same nutritional value, Gatorade is slightly expensive than
Powerade. Gatorade is able to beat Powerade because it has a better and well-established brand
name. PepsiCo. Inc. realised the strengths of Gatorade before acquiring Quaker. As a result, the