Introduction Every organization is expected to undertake strategic analysis to determine its market position as well as its current and anticipated performance. Through the application of different environmental analysis tools, managers are able to determine the strong and weak points of an organization. One of the activities carried out by organizations is scenario analysis. Scenarios are used to map the future based on uncertain and predetermined elements. These elements are explored with the aim of helping an organization to seek solutions to some of the foreseen problems which may have an effect on the company. The purpose of the current essay is to undertake a scenarios analysis and offer their respective strategic responses in respect to PepsiCo Company. The first task involves the development of three future scenarios and strategic responses for PepsiCo. Scenario one predicts no major future changes scenario in the external environment. Scenario two predicts negative future changes in the external environment. Scenario three predicts positive future changes’ in the external environment. The second task of the essay involves evaluating the contribution of scenario planning to effective management. Introduction to the PepsiCo Company PepsiCo Company is a multinational company whose headquarters are in Purchase, New York (Berch, Montoya & Sawayda 2010, p.1). The multinational company operates in the drinks and beverage industry. The company which was formed as a merger between Frito-Lay Inc and Pepsi-Cola is a major competitor of the Coca-Cola Company. PepsiCo has a presence in 200 countries across the globe. Some of the areas where it has subsidiaries include Africa, Asia, Middle East, Europe, and Australia, among others. Globally, the company is second after Coca-Cola in the food and beverage industry. Over the years, the company has undergone several mergers and acquisitions which have promoted its success and presence in the international markets. Through M & A, the company has been able to diversify in its areas of production. For example, PepsiCo product base has expanded to increase products like snacks and foods (Berch, Montoya & Sawayda 2010, p.1), PepsiCo competes with Kraft Foods. The company has diversified its product mix where majority of the product mix are foods and the rest are beverages. Both carbonated and un-carbonated beverages are available although the carbonated beverages no longer dominate the market. Despite the success of the company, it has in the recent past been involved in challenging situations like environmental problems such as pollution and disposal of its biodegradable wastes (Berch et al. 2010, p.8) Rationale for its selection PepsiCo Inc is a large US company which controls about thirty six percent of the US’ drinks market (Berch et al. 2010, p.1). The company operates in an industry that is greatly affected by season. For example, most of the drinks are drunk seasonally and more so during summer. As a result, the company has to undertake a scenario analysis in order to determine its current and future operations. Furthermore, the company is normally faced with stiff market competition from Coca Cola, the number one market shareholder. Following the recent global market financial crisis it is imperative to acknowledge that PepsiCo was financially af