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Pepsi Challenge

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Running Head: PEPSI CHALLENGE 1

Pepsi Challenge
Teleka Seh
Gwynedd-Mercy College
Managerial Finance
February 25, 2013
James Bradley

PEPSI CHALLENGE 2

Pepsi Challenge

When running a business, there is always going to be some element of risk. No matter

what you do, no matter how stable, there’s always a chance that something could go wrong. It’s

just that some business plans are more risky than others, but those are usually the ones with the

most gain. Making money and being successful is all about knowing how much risk to take. It’s

plain and simple, if you don’t take a lot of risks, you’re are probably not going to have a lot of

gain. In Indra Nooyi’s case she has a strategy to double the company’s revenue from nutritional

drinks and snacks to $30 billion by 2020. Her strategy remake PepsiCo so that it to sells more

Health conscious foods. She also has pushed PepsiCo to reduce the fat and sugar in many of its

current products, while added whole grains, fruits and vegetables to some of its ingredients.

What do you think analysts are so critical in regard to Indra Nooyi’s strategy?

Analysts are so critical in regards to Indra’s strategy for many reasons. For one they believe it is

Too big of a risk to take and they’re afraid that she has overlooked profit projections. They also

believe that they are sure to lose a market share to their rival Coca-Cola. They are also impatient

and believe that even if her strategy is a success the transformation may take to long for

successful results. Year-Year analysts expect to earn an increase and their earnings have been

down because of the more healthy ingredients they are now added to the foods which more

mostly verses the old products. This has forced them to increase product prices,

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