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Pepsi

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Chapter 11 Case Study: Pepsi

Background of the Company-

1965-PepsiCo, Inc. was established through the merger of Pepsi Cola and
Frito-Lay. Caleb Bradham, a New Bern, N.C. pharmacist, created Pepsi Cola in the late 1890s. The 1961 merger of the Frito Company, founded by Elmer Doolin in 1932, and the H. W. LAY COMPANY, formed Frito-Lay, Inc., founded by Herman W. Lay, also in 1932. Herman Lay, former chairman and CEO of Frito-Lay, was chairman of the board of directors of the new company; Donald M. Kendall, former president and CEO of Pepsi Cola, was president and chief executive officer. The new company reports sales of $510 million and has 19,000 employees. Major products of the new companies are: Pepsi Cola Company: Pepsi Cola (formulated in 1898), Diet Pepsi (1964) and Mountain Dew (introduced by Tip Corporation in 1948). Frito-Lay, Inc.: Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese flavored snacks (1948), Ruffles brand potato chips (1958) and Rold Gold brand pretzels (acquired 1961).

1966- Doritos brand tortilla chips are introduced. They are destined to become the most popular snack chip in the United States. Pepsi enters Japan and Eastern Europe.

1971- PepsiCo moves from New York City to its new world headquarters in Purchase, N.Y. The new corporate headquarters features a building by one of America's foremost architects, Edward Durrell Stone (19021978), set on a 144acre campus amid an outdoor sculpture garden. Frito-Lay begins a program of expansion. Over the next decade, the company opens, on average, more than one new plant a year. Pepsi is the first company to respond to consumer preference

1971- PepsiCo Chief Executive Officer Donald M. Kendall assumes the position of chairman of the board of directors on the retirement of Herman W. Lay. Lay...

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