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Jennifer DuBois
Professor: Malick Diarrassouba
Module 3 final Project

The beverage industry has undergone profane changes as health awareness among consumers has been on the rise. In the current challenging conditions for the beverage industry, PepsiCo has been taking aggressive steps to cut costs to support long-term earnings growth and reinvest savings in their business. As the company faces growing concerns in the carbonated beverage industry because of growing health awareness and obesity concerns, PepsiCo has been working to make its cost structure leaner; through economies of scale to reduce labor, by specialization and division of labor. PepsiCo is also making good progress with it cost-savings initiatives consistent with its productivity enhancement initiatives; the company expects to realize cost savings of at least $1 billion in 2014.
One of the major expenses for PepsiCo is it marketing and advertising campaign which accounts as of 2013 for 5.9 of its net revenue, however PepsiCo has manage to have substantial savings in their direct fixed cost by their structural business model and through economies of scale, Moreover, PepsiCo has announced an increase cost-savings program, which is expected to result in cost savings of $5 billion for the next five years starting from 2015 " and by optimizing its production facilities globally; improving its go-to-market systems, increasing shared services, and investments in automation. One of PepsiCo state of the Art Facilities with two filling lines working can fill over 1.5 billion cans of soda in a year with just 20 employees. This is a tremendous direct labor cost savings for PepsiCo. As part of a Global Sustainable Packaging Policy PepsiCo has provides the framework through which PepsiCo has aspire to: Increase the use of recycled content or materials from renewable sources; (b) Optimize packaging design to

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