Comprehensive SWOT Analysis of Lay’s

Lay’s is a very well-known potato chips brand owned by Frito Lay’s. It is a subsidiary of PepsiCo, and these potato chips are available in various variants. In this blog post we will explore the SWOT analysis of Lay’s.

About Lay’s

Lay’s has been the market leader with approximately 50% of the market share from free to lays. Lay’s is the flagship brand of potato chips. Lay’s was first brought to the market in 1932. Since its establishment, the company has been beating the competition and ruling the potato chips market.

In 1961, Frito was partnered with Lay’s which gave birth to the Frito-Lay brand. 

Lay’s at a Glance

Founders	Herman Lay
Year of Establishment	1932
Annual Revenue (as of FY23)	Rs 4,763.29 crore
Total assets (as of FY23)	$3.9 trillion
Origin	United States
Total no. of employees	Approx. 55,000

Products Offered by Lay’s 

# Classic Flavors

1. Classic
2. Sour Cream & Onion
3. Barbecue
4. Salt & Vinegar
5. Cheddar & Sour Cream
6. Limon
7. Honey Barbecue

# Wavy Flavors

1. Wavy Original
2. Wavy Ranch
3. Wavy Hickory BBQ
4. Wavy Lightly Salted

# Regional & Limited Edition Flavors

1. Dill Pickle 
2. Flamin’ 
3. Chesapeake Bay Crab Spice
4. Chile Limon
5. Mango Salsa

# International Flavors

1. Prawn Cocktail (UK)
2. Paprika (Europe)
3. Magic Masala (India)
4. Seaweed (Asia)
5. Tom Yum (Thailand)
6. Cucumber (China)

# Baked & Healthier Options

1. Baked Original
2. Baked Sour Cream & Onion 
3. Poppables Honey BBQ

SWOT Analysis of Lay’s

SWOT analysis is the best method of understanding the strengths, weaknesses, threats, and opportunities of the company. Now let us look at the details of Lay’s SWOT analysis.

Strengths of Lay’s

The strengths of Lay’s include – 

1. Expansive reach 

Lay’s has been a popular brand of potato chips due to its different flavors accepted globally. There also are some local flavors like Spanish tomato Tango India’s magic masala and much more that give a local angle to the brand along with global food products.

2. Expanded distribution channel 

Pepsico is the current owner of Lay’s and has a very broad distribution channel. It ensures the availability of Lay’s in remote locations as well, which has increased the popularity a number of times. 

3. Local sourcing 

The primary strategy of Frito Lay’s is to win the hearts of customers through its marketing program called ‘ Lay’s Local Campaign’ in 2009. During this program, customers can get introduced to at least five farmers who are developing potatoes. This campaign made sure that the customer should not have any concerns or doubts about the sourcing of potatoes to manufacture potato chips.

Weaknesses of Lay’s

The company has the following weaknesses –

1. Health-conscious customers

Lay’s chips as a high calorie treat with a lot of fat content. A lot of people are now getting more concerned about health reducing the focus on purchasing packed potato chips like Lay’s. 

2. Non-recyclable packing 

The packaging of lays is non-recyclable which affects the company’s reputation in the market. 

3. Low scope for innovation 

There is a very low scope of innovation for Lay’s. Therefore there is a higher transfer of the business to lose its market share to small competitors. Also, the low brand loyalty from its users is making the brand switch quickly. 

Opportunities for Lay’s

Lay’s finds opportunities in below mentioned aspects-

1. Disposable income 

The developing countries across the globe are experiencing a high amount of disposable income. Therefore, the purchasing of snacks also enhances leading to an increase in the sales of Lay’s.

Moreover, the tourism industry is also growing which is giving an exposure to Lay’s company. People buy ready-to-eat snacks like potato chips which gives the company an opportunity to grow. 

2. Different flavors 

Lay’s is one of the most favorite snacks among youngsters and kids. Therefore, the company should start working to bring innovation in its flavors that will bring the craze of potato chips among its fans. 

3. Expansion in rural markets 

Lay’s is a famous brand across the globe but it may have some Limited stock in the rural market. Therefore, the company can focus on making its products available in these regions leading to an increase in the customer base as well as revenue. 

Occasional expansion 

Lay’s are the first choice among people during parties and festivals. Marketing their products during certain holidays could help increase sales the most. To take full advantage of this opportunity, they need to focus more on research and marketing.

Threats to Lay’s 

The following are the major threats Lay’s should be aware of –

1. Products Ban

A lot of health-conscious people are boycotting Lay’s which is creating less demand for the potato chips brand. 

2. Reduced margin

The snacks market is witnessing a growing scale of local distribution but there is also a high amount of competition between the rivals leading to reduced margins. Moreover, the raw material required to produce the chips is potato while the price fluctuation of the raw material directly affects the final cost product.

3. Negative views 

The company has received some negative reviews from famous sports personalities due to its unhealthy content. Lay’s might lose its brand value because of this.

Top Competitors of Lay’s

Here are the top 5 competitors of Lay’s in detail-

1. Pringles: It’s an American potato chip company acquired by Kellogg’s. The products are now sold in over 120 countries.

2. Nestle: It is the largest Food company having different product lines. It is a major competitor of Lay’s in the snacks segment.

3. Kellogg’s: It is a popular food products company having grounds in the United States. Kellogg’s completes with Lay’s in the snacks production segment.

4. Cheetos: Cheetos is among the top brands offering snacks and food products. That’s one of the toughest challenges that Lay’s faces.

5. General Mills 

It is an American translation company offering different types of food processing. GM is the biggest competitor to Lay’s.

Conclusion

Lay’s is a versatile snack brand across the world. It implements unique strategies to stand unique in the market. But, the company should focus on launching healthy variants so that it can get rid of certain bans. It is a big brand serving chips and products throughout different countries. Therefore, it should focus more on creating more healthier products and launching them with the top marketing strategies.