...PepsiCo: Case Study. Problem Identification Problem PepsiCo is a world leader in convenience foods and drinks, the company portfolio consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. The brand is represented nearly over 200 countries. Pepsi co is really a leader when it comes to convenience foods and drinks but it always come second best. It always comes behind Coca- cola, which is the world leader in soft drink. In 2006 Pepsi co was the world leader in this market we will study what strategy they used to be able to determine what is the problem since 2006 . Analysis of the problem. Problem Analysis. On December 12, 2005, for the first time in the rivalry of over a century, PepsiCo (Pepsi) surpassed its biggest foe Coca-Cola (Coke) in market capitalization. It had much higher operating revenue than Coke. Acquiring many companies is a strategy that propelled Pepsi ahead of it longtime concurrent Coca-cola. (.ibscdc2006) The Quaker Oats acquisition at $13.9 billion brought Quaker’s most valuable asset Gatorade under PepsiCo. After the completion of Quaker Oats acquisition in August 2001, PepsiCo made a number of small, tuck-in acquisitions. The combination of acquisitions coupled with PepsiCo’s core snacks and beverage businesses allowed the revenues to increase from approximately $20 billion in 2000 to more than $35 billion in 2006. PepsiCo’s corporate strategy was diversification...
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...Introduction The purpose of this case analysis report is to review the history and financial reports for PepsiCo to determine whether or not the merger with Quaker Oats is a good project. The analysis in this report will provide key insights into what the company does and if/how the merger with Quaker can benefit PepsiCo. Company Overview The first Pepsi-Cola company was founded in 1902 by a young pharmacist from North Carolina, Caleb D. Bradham. After initial struggles with bankruptcy, the company again emerged in 1934, under new ownership and with better fortunes. Even though this year was in the middle of the Great Depression, sales soared and the company embarked on six decades of sustained and profitable growth. In 1965, Pepsi-Cola merged with the Texas-based snack manufacturer, Frito-Lay, Inc. The company, now called PepsiCo continued to grow during the 1970s and 80s through acquisitions of other companies. In 1984, the company underwent some restructuring efforts to re-focus on soft drinks, snacks, and restaurants. PepsiCo, incorporated on November 13, 1986, is a global food and beverage company. By 1995, PepsiCo sales had reached $30B, and it had 470,000 employees worldwide. Historically, it has been one of the most successful consumer products companies in the world. Between 1988 and 1994, PepsiCo had invested close to $7B to acquire thousands of fast-food and casual dining outlets. The company was investing “too much money too fast” and operational complexities were...
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...Strategic Case Analysis – PepsicC Part I Strategic Direction Vision: PepsiCo's responsibility is to continually improve all aspects of the world in which they operate - environment, social, economic - creating a better tomorrow than today." PepsiCo’s vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Mission: Is to be the world's premier consumer product company focused on convenient foods and beverages. PepsiCo seek to produce financial rewards to investors as they provide opportunities for growth and enrichment to employees, business partners and the communities in which they operate. Objectives Short range: • Product innovation- new products lauch such as: Gatorade G2, Tiger Woods signature sports drinks,Quarker Simple Harvest multigrain hot cereal. Goal is to address consumer health and wellness. • Power of One retailer alliance strategy- continue to help boost pepsiCo’s volume and identify new product formulations desired by consumers. • International expansion- increase sales in markets outside North America. New organizational structure to address low relative profitability of its international operations and to produce faster growth international markets. • Consider restructuring its lineup of snack and beverage business to improve overall profitability and reverse the downturn in its stock price...
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...What “grade” would you give Ms. Nooyi for her job performance as a strategic leader? What are her strengths and weaknesses? Where would you place Ms. Nooyi on the Level-5 pyramid of strategic leadership and why? I would give Ms. Mooyi a B. The CEO of Pepsico is well informed about the company’s resources and how they are being affected by the external environment. The decisions that she she made to restructure and diversify the company have definitely positively impacted how the company is being perceived. Those decisions also provided various opportunities within the food industry be creating healthier food lines and adding competitive advantage. As for the disadvantages I believe that she is trusting a lot of strategic elements in the company by creating a corporate company lifestyle. It is also unclear if the performance of the company is related to CSR and if it represents the competitive advantage over competitors. The results that the company is achieving do not show that Pepsi is gaining the competitive advantage over the competition. What is needed to have a better performance with competitors is better business strategies that will improve current company situation. The markets where Pepsico is competing are established and have already developed very strong competitive advantage. On the Level-5 pyramid of strategic leadership Ms. Nooyi is definitely located either at or extremely close to the top of the pyramid. She has shown that she possesses exceptional...
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...PepsiCo Problem PepsiCo’s business strategies were working out very well for them except for in their international operations. The international segment had relatively low profit margins which meant that PepsiCo needed to implement a new organizational structure that would better utilize strategic fits between the company’s international operations. Also, the operating margins and profitability across the different geographic areas and product lines varied a lot for PepsiCo. Gaining some more stability throughout each area and product line would increase the company’s growth and strength within their targeted markets. Situation Analysis In 1997 PepsiCo set out to accomplish a major portfolio restructuring through acquisitions, product innovation, international expansion, and close relationships with distribution allies. All of this restructuring proved positive for the company and they saw success in many areas. They saw their international snack volume grow by 9 percent and the international beverage volume increased by 8 percent in 2007. However, PepsiCo’s international operations were much less profitable than its businesses operating in North America. The company did notice opportunities for growth in these international markets, though. PepsiCo executives expected that, by 2010, China and Brazil would be the two largest international markets for snacks. They also found that it could grow international sales through its Power of One Strategy. Through research PepsiCo...
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...Analysis Case The Coca-Cola Company and PepsiCo, Inc. Both Coca-Cola Company and PepsiCo, Inc. used a comparative report format, that list the sections one above the other, on the same page, to present their balance sheets. For a measure of both a company’s efficiency and its short-term financial health, the working capital is calculated as: Working Capital = Current Assets – Current Liabilities. At the end of 2007, the Coca-Cola Company has a negative working capital of $1,120 million from the current assets of $12,105million and the current liabilities of $13,225 million. The Coca-Cola Company’s negative working capital might be impacted by the effects of transactions occurred in 2007. Trade accounts receivable, inventories, prepaid expenses and other assets were increased to $730 million, $579 million and $637 million respectively. It was primarily due to 2007 acquisitions, including glaceau, 18 German bottling and distribution operations. Because of these acquisitions, accounts payable and accrued expenses were increased to $1,860 million. Additionally its loans and notes payable of $2,684 million were increased primarily due to net borrowings of commercial paper and short-term debt during 2007 to fund acquisitions. It seemed not that the Coca-Cola Company was unable to meet its short-term liabilities with its current assets but it seemed that the increases of current liabilities were much higher than that of current assets. On the other hand, PepsiCo, Inc. had...
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...Becca Mathew 3/10/2014 PepsiCo Restaurants Case In the PepsiCo’s Restaurants case, PepsiCo must evaluate the potential acquisition of Carts of Colorado and California Pizza Kitchen. The acquisition of these restaurants would expand PepsiCo’s restaurant business, but PepsiCo must consider how each deal will affect the scope of the firm and potential synergies in each deal before making a decision to acquire these firms or not. There are several potential synergies in the Carts of Colorado (COC) deal. Specifically, there are operational synergies and financial synergies, along with a little strategic synergy. There is operational synergy because acquiring COC would create economies of scope. There could be shared resources or activities because PepsiCo could sell items, or at least similar items, from their other restaurants on these food carts. There is some strategic synergy in this deal because making this deal would mean entering a new market, the food cart industry, to extend market power. Even though food carts are also fast food, it is in a new segment that PepsiCo has not yet experienced. Financial synergies are also evident in this deal with COC because since they nearly tripled its income in one period, they could be a valuable asset. By investing in it, PepsiCo will be able to gain much revenue and capital from a new source. For California Pizza Kitchen, there are operational, strategic, and financial synergies...
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...PepsiCo, Organized Trade BY, GAURAV PRATAP SINGH (ROLL NO 15) EBREZ (ROLL NO 16) PepsiCo Organized Trade: The Beverage Industry is a mature sector and includes companies that market nonalcoholic and alcoholic items. Since growth opportunities are few compared to existing business, many members of the industry endeavor to diversify their offerings to better compete and gain share. Too, they may pursue lucrative distribution arrangements and/or acquisitions to expand their operations, product portfolios, and geographic reach. Most equities in this group are suitable for conservative investors. The largest companies offer reliable dividends, with regular increases, and above-average Stock Price Stability. There are a few selections for those that are more venturesome. Such issues might serve a particular market niche, for example, energy drinks or developing overseas markets. Generally, the group turns in a steady performance throughout the business cycle, but it will generally suffer in the most stressful of economic times PepsiCo is one of the largest food and beverage companies in the world. Its products include a variety of salty, sweet, and grain-based snacks as well as Csds and non-Csds. the company is responsible for the manufacturing, marketing, and sales of these goods. It has 18 brands in its...
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...Executive Summary The case study will examine the strategy implemented by PepsiCo to exploit rapidly growing markets opportunities by acquiring the organisations Tropicana, Gatorade and Quaker. The case study will highlight that it was imperative for the PepsiCo organisation to embark on a radical restructuring strategy to optimise their return on investments. The paper will discuss the rationale behind the critical restructuring .The benefits of the acquisitions and restructuring strategy will be discussed and motivated in detail. The strong existing competitive resources that PepsiCo and the new acquired brands in the North America region possess will be emphasised. The modifications to PepsiCo structure in 2001 and 2004 will be scrutinised to motivate and justify the decisions of the PepsiCo leadership. In addition the case study will evaluate the execution of the radical change and the tasks that should be performed by key resources. The emotional impact on employees due to the radical transformation and the key role employees should perform will be described. The focus of the paper will be on the function; the leadership of PepsiCo must perform and the potential roles the employees of PepsiCo could execute. Ultimately, the case study will discuss the complex relationship between structure and strategy. The paper will establish that PepsiCo had to regular acclimatise their strategy and structure to accomplish their organisational goals. Introduction Over...
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...EXECUTIVE SUMMARY In the case study, PepsiCo is a producer of carbonated cola drink and was marketing its products in most countries around the world. PepsiCo’s competitor was Coca-Cola. PepsiCo made two acquisitions of Tropicana and Quaker and the view was that there was synergy and economies of scale to be gained. PepsiCo should have had an organisational structure that will enable the achievement of the organisational mission and objectives. The organisation reorganised their structure to a multidivisional structure in a move to exploit the full acquisition potential. A multidivisional structure is most suitable for an organisation that has not got a wide range of products like PepsiCo. The organisation did not experience benefits from the multidivisional structure because PepsiCo had a wide rage of products and different customers. The organisation was structured into divisions and each reporting to the headquarters and there was no synergies and economies of scale gained. PepsiCo revised the organisational structure to a matrix structure. It enabled the organisation to operate in its particular competitive situation at peak effectiveness. At Pepsi they discovered that it was essential to drive the various brands as part of one team. There was less conflict between employees because of the hierarchical setup of the organisation. PepsiCo Beverages became the No 1 liquid refreshment beverage company in measured channels. There was a strategic fit as its strengths in the...
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...COMPANY PROFILE PepsiCo is an American company founded in 1898. It was founded by a pharmacist Caleb D. Bradham. It was named PepsiCo in 1903. PepsiCo is one of the top consumer product companies in the world and it is also one of the most famous soft drink companies. Currently PepsiCo owns more than 21% share of soft drink market world wide and has over 30% share in United states alone. Pepsi has many brands in soft drinks alone namely mountain dew, diet pepsi, mirinda etc. Also pepsi has expanded its reach to other products like quaker oats, Tropicana fruit juice, lays potato chips, cheetos, Gatorade etc. One of the Pepsi’s popular product was its ‘ Diet Pepsi’. It was introduced in 1964. Its main highlight was that it was a sugar free drink making it available to all larger section people. It had zero calories and also very less sugar content it and was an instant hit among the youth. PepsiCo is a leading company in soft drinks, snacks and foods and beverages. It has a revenue of more than 39 billion dollars and has employee strength of more than 1,85,000 people. PepsiCo company consist of mainly 3 companies. PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAB), and PepsiCo International (PI). PepsiCo’s products are one of the most recognized products in today’s world. PepsiCo’s increase in success is mainly due to high standard of performance, commitment, determination and hard work of each and every member of the PepsiCo family. Pepsi also follows one of the...
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...Running head: CASE STUDY: THE PEPSI REFRESH PROJECT Case Study: The Pepsi Refresh Project Emily M. Kamischke Elon University 1 Author Note Emily M. Kamischke, Masters of Interactive Media, Elon University Correspondence concerning this article should be addressed to Emily Kamischke, ekamischke@elon.edu CASE STUDY: THE PEPSI REFRESH PROJECT 2 Abstract This study aims to describe the successes and failures of the Pepsi Refresh Project and corresponding implications for other corporate social responsibility (CSR) projects seeking to employ information and communications technology (ICT) competitions, crowdsourcing and social media narratives as a means for production of ideas or tasks. The Knight Foundation’s (2009) seven key components of ICT competitions will be used as a framework to review the project and from there analysis of the project will take place using industry information and reviews. Lastly, implication for other ICT competitions will be discussed. Overall, this study explores the Pepsi Refresh Project’s effect on sales and corporate loyalty of consumers for the PepsiCo brand through consumer corporate trust generation. CASE STUDY: THE PEPSI REFRESH PROJECT 3 Case Study: The Pepsi Refresh Project The purpose of this investigation is to complete a case study of the Pepsi Refresh Project and from it devise high impact practices for its application to other corporate social responsibility (CSR) projects. The Pepsi Refresh Project...
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...PepsiCo 2005 Case Analysis June 17, 2009 I. Definition of the Issue The PepsiCo-2005 case study has several issues revolving it. It has the internal issue that PepsiCo has not been able to consistently meet its growth goal of 15+ percent annual increase in earnings for the last 10 years. Its external issues consist of its products as reaching maturity stage industry wise and its divisions, except Frito-Lay North America (FLNA), fail to rank highest in its respective market segments. Division wise, the company holds a large share of each respective market, but over-all the company sustains a flat growth rate and fails to meet its growth goal. In respect to this, it can be seen that the real issue in this case is the need of a strategy to sustain a compound annual growth rate (CAGR) in earnings per share of 15 percent per year. This paper aims to develop a three-year strategic plan for PEPSICO that can best ensure this growth through this decade. II. Objectives The paper’s objectives include designing of alternatives that may aid its development for a sound strategy in response to the issue through a quantitative analysis. The paper would also include an analysis of each alternative. From the generated alternatives, the paper would focus on one that would seem to best apply to the given circumstances. The paper also includes a potential problem analysis to aid in strengthening the strategy’s defenses and enables the company to predict and anticipate...
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...table of content External Analysis: 2 Macro environment: 2 Meso environment: 5 Internal Analysis 7 SWOT Analysis Pepsi case: 9 Objectives 10 Marketing Strategy 10 Marketing Plan 12 Product 12 Place 14 Price 14 Budget & Control 15 External Analysis: Macro environment: The environment is constantly changing and therefore also influencing PepsiCo’s operations. Environmental changes which are not directly involved with the company but do influence it can be put in six categories: economic, technological, political, cultural, natural and international changes. These changes and their influence on PepsiCo Canada are described per category. Management R. L. Draft, M. Kendrick, N. Vershinina, the general environment page 85-91. Economic In March 2012 Canada’s economy was ranked 11th of the world with a GDP of $1,759 billion. Canada is a wealthy nation with a very high standard of living and is also one of the world’s top trading nations. Since the 2008 world financial crisis Canada has emerged as one of the strongest developed economies in the world. The GDP growth of Canada in 2010 was more than 3% even though most of the World’s Western countries were in an economic recession. The stability of the Canadian economy even during a World financial crisis makes Canada a great country to operate in for a multinational like PepsiCo. http://www.rediff.com/business/slide-show/slide-show-1-worlds-20-economic-superpowers/20120312.htm http://www.economywatch.com/world_economy/canada/...
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...The proposed acquisitions of California Pizza Kitchen and Carts of Colorado by Pepsico 1. Should PepsiCo buy California Pizza Kitchen? For both acquisitions it's more about what they add to PepsiCo, not what value PepsiCo adds to them Pros: - needs to acquire CPK to learn casual dining. That's where the growth is, and internal attempts to develop casual dining in Pizza Hut Cafe have failed. whether CPK is merely a passing yuppie fad, or if it is a long-term market segment doesn’t matter to PepsiCo if it merely wants to learn casual dining. - PepsiCo startups failing Cons: - possibly PepsiCo’s failure to develop a casual chain internally, along with the real differences between fast food and sit-down dining, will prevent it from succeeding. •New segment that PepsiCo doesn't know - Yuppie casual dining • $11 check, dinner on pizza dough - PepsiCo ignorant of key success factors •high level waiter service •PR not advertising key to marketing •capital cost $1 - $2m, sales $3m not $800k, $800k. •New untested concept - 25 restaurants, 8 states, $34m sales, $3/4m net income - may be a "fad" •only seven years old - may not stretch beyond Yuppiedom 2. Should they buy Carts of Colorado? Pros: - while CoC's $8m sales is very small for Pepsico, the real market size is the revenue from non-traditional PODs, and this is potentially enormous ($2 billion to PepsiCo alone) The real reason to own CoC is to preempt Coke and MacDonalds in the best locations...
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