...Week 8 Assignment: Multinational Acquisition PepsiCo & Quaker Oats “Multinational Acquisition: PepsiCo & Quaker Oats” Briefly describe the acquisition you have selected. PepsiCo, Inc. is a multinational corporation with product sales in over 200 countries and territories. One billion times per day, PepsiCo customers consume one of their numerous food and beverage products. The merger agreement between PepsiCo and Quaker Oats dated December 2, 2000 (completed acquisition on August 2, 2001) significantly increased PepsiCo’s market share and revenues. Therefore, consumers of PepsiCo products have increased exponentially, both in the United States and internationally. Prior to acquiring Quaker Oats, PepsiCo was approaching “the global saturation point in terms of cola sales” (Jaffe, 2001). It is no secret that the world is trending toward healthier snacks and drinks. Medical studies linking soda consumption to childhood obesity will begin to eat away at PepsiCo’s profits. Acquiring Quaker Oats (the maker of Gatorade) will allow PepsiCo to expand further into the noncarbonated drink business. The $13.4 billion stock acquisition (Sorkin & Winter, 2000) of Quaker Oats will seem like a bargain once profits from Gatorade and the Quaker snacks start rolling in. PepsiCo has the means and capability to distribute beverages AND snacks, as Frito Lay is their largest subsidiary. “Pepsi plans to use Quaker’s granola bars as the foundation...
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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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...Anita Bennefield MAN6721-12 Course Project Introduction: Strategic Management for PepsiCo and Quaker Oats, determine the present strategy: unrelated diversification, scope domestic or global for each division, what move have been made recently to add new business, rationale underlying recent divestures, the nature of any efforts to capture strategic fits and create competitive advantage based on economies of scope and other resource. Present Strategy Roger Enrico the CEO of PepsiCo (1996-2001) got involved in restricting PepsiCo’s business portfolio. Company had three business segments restaurants, beverages and snack foods. He found number of problems at PepsiCo. Company fall behind, Coca-Cola, the competitor by a growing margin in both domestic and international markets. The restaurant business declining and profit margin were slim. To get the company by on track Enrico developed a restricting strategy, which is: Related Diversification: The restaurants limited investment in the company’s snack food and beverage business and severely impaired the corporation’s overall operating and profit margin. The fact restaurant which included Pizza Hut, KFC, and Taco Bell were eliminated from the company’s portfolio of business and the three main restaurants were spun off as an independent publicly traded company, the divestitures was completed with a creation of Tricon Global Restaurants. Focusing on related diversification and spun off business unit which were unrelated to...
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...Cases, 13th Edition 23. PepsiCo’s Acquisition of Quaker Oats Case © The McGraw−Hill Companies, 2002 1 case 23 PepsiCo’s Acquisition of Quaker Oats John E. Gamble University of South Alabama In 2001, PepsiCo was the world’s fifth-largest food and beverage company, with such brands as Lay’s, Tostitos, Mountain Dew, Pepsi, Doritos, Aquafina, and Lipton contributing to revenues of approximately $26 billion. PepsiCo’s revenues had reached $31 billion in 1996, but a new corporate strategy embarked upon in 1997 slimmed the company’s portfolio from a collection of fast-food restaurants, snack foods, and beverages to a sharply focused lineup of convenience foods and beverages. Between 1997 and 1999, CEO Roger Enrico spun off Kentucky Fried Chicken (KFC), Taco Bell, and Pizza Hut as one independent, publicly traded company; created a stand-alone softdrink bottling business through an initial public offering; and entered additional snack and beverage categories with the acquisitions of Cracker Jack and Tropicana. Enrico’s focus on convenience foods and beverages placed PepsiCo in food and beverage categories that grew at twice the 2 percent industry growth rate and gave it a 2-to-1 market share lead over its nearest competitor in the convenience food and beverage industry. Roger Enrico and Quaker Oats Company’s CEO, Robert Morrison, jointly announced on December 4, 2000, that PepsiCo would acquire Quaker Oats. The move would combine PepsiCo’s 13 brands (with retail...
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...PepsiCo From Wikipedia, the free encyclopedia Jump to: navigation, search This article is about the company. For the soft drink, see Pepsi. PepsiCo Inc. | | Type | Public | Traded as | NYSE: PEP NASDAQ: PEP S&P 500 Component | Industry | Foods, Beverages | Founded | North Carolina, U.S. (1965 (1965)) | Founder(s) | Donald Kendall, Herman Lay | Headquarters | Purchase, New York, U.S. | Area served | Worldwide | Key people | Indra Nooyi (Chairman & CEO)[1] | Products | See list of PepsiCo products | Revenue | US$ 57.838 billion (2010)[2] | Operating income | US$ 08.332 billion (2010)[2] | Net income | US$ 06.338 billion (2010)[2] | Total assets | US$ 68.153 billion (2010)[2] | Total equity | US$ 21.476 billion (2010)[2] | Employees | 294,000 (2010)[2] | Divisions | PepsiCo Americas Foods; PepsiCo Americas Beverages; PepsiCo Europe; PepsiCo Asia, Middle East & Africa | Subsidiaries | List of subsidiaries | Website | PepsiCo.com | PepsiCo Inc. (NYSE: PEP) is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998...
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...of How Pepsi’s Indra Nooyi Learned to Be a CEO Page4-page5 Summary of Indra K. Nooyi Biography Page6-Page7 Summary of Leadership Style of Indra Nooyi Page8-Page9 Conclusion Page10 Introduction Indra Nooyi, one of the best business leaders in the world is a fascinating Indian born woman. She is the Chairman and chief Executive Officer of PepsiCo, which has the world’s largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. PepsiCo’s main businesses- Quaker Oats, Tropicana, Gatorade, Frito-Lay, and Pepsi-Cola make hundreds of enjoyable and wholesome foods and beverages that bring joy to consumers in more than 200 countries. With approximately $60 billion in revenue, PepsiCo employs nearly 300,000 people worldwide. Indra Nooyi embodies all the attributes of great leader. She has clear vision for PepsiCo, under her leadership PepsiCo was able to close its most important deals, the acquisition of the Tropicana orange-juice brand in 1998, and two years later the acquisition of Quaker Oats for $14 billion. She has an impressive personal skills, she is a very positive person she tries to keep her calm when facing a challenge. She once said “My father was an absolutely wonderful human being. From him I learned to always assume positive intent. Whatever anybody says or does assume positive intent. You will be amazed at how your whole approach to a person...
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...and it’s critically important that we take that responsibility very, very seriously. We have to make sure that what corporations do don’t add costs to society. - Indra Nooyi, CEO PepsiCo The first job of management is, therefore, to identify and to anticipate impacts – coldly and realistically. The question is, Is what we do right, in the best interest of the customer and society? - Peter F. Drucker, Management: Tasks and Responsibilities Company Background In 1965 the Pepsi-Cola company and Frito-Lay companies merged to form PepsiCo,Inc. Pepsi-Colas roots extended back to the 1890’s, when a North Carolina druggist had begun to produce and sell the carbonated soft drink of the same name. Frito-Lay was itself the product of the 1961 merger of two snack companies, the H.W. Lay Company, which had begun selling potato chips in 1938, and the Frito Company, which began its corn chip business in 1932. The combined company, which had 1965 sales of $510 million and employed 19,000 people, expanded rapidly over the next several decades. By 2009, it was the second largest food and beverage business in the world, with revenues of $43 billion and approximately 200,000 employees. It boasted some of the world’s most recognizable brands, including Pepsi-Cola, Tropicana, Quaker Oats, and Frito-Lay. The company’s expansion was driven by growth in its core business, expansion into international markets, and acquisitions. In the 1960’s and 1970’s the company diversified...
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...the competitive world of business, companies generally do whatever it takes to secure their stature in the marketplace. One of the most effective means to this end involves what is referred to as vertical integration, which takes on two forms: forward and backward integration. Forward integration focuses on the manner in which a company oversees its product distribution. On the other hand, the backward form concentrates on how a company regulates its goods or supplies. 5.1.1 Forward integration Forward integration is a type of vertical integration which a supplier acquires a manufacturer or a manufacturer acquires a distributor. Businesses engage in forward integration either to generate a higher margin from a key input which it owns or produces or to better market its products and increase its profitability. Dr. Gerhard Bester, an Agricultural Research and Development Director, our aim is to ensure PepsiCo has continued access to the key agricultural raw materials necessary to supply growing consumer needs, while respecting the environment and communities involved in producing those raw materials. We strive to make farming more productive while...
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...Analysis of Personal and Organizational Ethics and Values between For-Profit and Not-for-Profit Organizations Monte Mutu PHI 445 – Personal & Organizational Ethics J. R. Ewing July 21, 2003 Our personal needs are meet by our human desires to generate a profit or seek assistance in managing profit. Even though both the Not-for-Profit and For-Profit organizations benefit our social economy by providing financial assistance to various social classes, both types of profit organizations must continue to uphold and maintain their values and standards at the highest level possible. Both profit organizations also have a responsibility to its customer base to live up to their actions simply by recognizing their purpose, owning up to their faults and conducting business in a professional and ethical manner. Lets take a look at the two types of profit organizations, the Navy and Marine Corps Relief Society and the Pepsi-Cola Company Inc. The Navy and Marine Corps Relief society is a non-profit organization headquartered in Arlington, Virginia. The Navy and Marine Corps Relief Society has approximately eighty-five branch offices located throughout the United States and eleven countries worldwide with a staff of 169 personnel, over 3,700 volunteers and over 50 nurses combined working diligently to provide assistance at moments notice. The Navy and Marine Corps Relief Society provides financial assistance and education to service members of the United States Navy, the Marine...
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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...
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...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 a three year period from 1998-2001, PepsiCo made 2 major acquisitions...
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...CHAPTER 2 CONSOLIDATION OF FINANCIAL INFORMATION Answers to Questions 1. A business combination is the process of forming a single economic entity by the uniting of two or more organizations under common ownership. The term also refers to the entity that results from this process. (1) A statutory merger is created whenever two or more companies come together to form a business combination and only one remains in existence as an identifiable entity. This arrangement is often instituted by the acquisition of substantially all of an enterprise’s assets. (2) a statutory merger can also be produced by the acquisition of a company’s capital stock. This transaction is labeled a statutory merger if the acquired company transfers its assets and liabilities to the buyer and then legally dissolves as a corporation. (3) A statutory consolidation results when two or more companies transfer all of their assets or capital stock to a newly formed corporation. The original companies are being “consolidated” into the new entity. (4) A business combination is also formed whenever one company gains control over another through the acquisition of outstanding voting stock. Both companies retain their separate legal identities although the common ownership indicates that only a single economic entity exists. Consolidated financial statements represent accounting information gathered from two or more separate companies. This data, although accumulated individually by the organizations, is brought together...
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...Indra Krishnamurthy 2008 Purchase, New York, Nooyi, Chairman of USA. Operations the Board and CEO (2006-). global in scope. Steven Reinemund (CEO 2001-2006). Roger Enrico (CEO 1996-2001). Donald Kendall and Herman Lay, Founders. Company Type & Size PepsiCo is a publicly traded company, listed on the NYSE, NASDAQ, and as a component of the S&P 500. In 2010 it had 294,000 employees worldwide. As of November 2011, it had a market cap of $101.02 billion. 1965 Merger with Frito-Lay CEO of Pepsi Cola, and engineer of PEPSICO Merger, Donald Kendal Diversification outside snacks and beverages Acquisition of Pizza Hut, Taco Bell, KFC Acquisition of 7UP, Mug Root Beer, SunChips, Introduction of Aquafina - 1993 Portfolio Reconstruction Roger Enrico, CEO (1996-2001) Wayne Colloway, CEO (1986-1996) "Potato chips make you thirsty; Pepsi satisfies thirst." Donald Kendall on merger. 1970s 1980s ‘Balanced three leg stool’ describes Wayne Colloway, however, strategic fit problems occurs 1990s Bottled water business starts. 1997 Due to several strategic fit problems, restaurant businesses have been spun off to form Tricon, later Yum! Brands. FTC’s bans to jointly distribute Gatorade with Pepsi for ten years. 2001 Acquisition of Quaker Oat Company, Adding Gatorade to arsenal Re-Organization of Structure Steven Reinemund (CEO 2001-2006) 2008 Indra Krishnamurthy Nooyi, Chairman of the Board and CEO (2006-). Three division model. Strategic realignment. Page 2 2. BRIEF SUMMARY OF CASE...
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...Introduction to company:- PepsiCo serves 200 countries and is a world leader in providing food and beverage products. Its brands consist of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. Some of PepsiCo's brands are over 100 years old; however the company was only founded in 1965 when Pepsi-Cola merged with Frito-Lay. PepsiCo then attained Tropicana and Gatorade when they merged with the Quaker Oats Company. The combined retail sales average about $92 billion. The company is focused on being the premier producer in supplying the world with convenient foods. They offer a wide variety a food options as well, including healthy options. PepsiCo stands out as a company because of its sustainable advantage. It includes widely known brands, innovative products, and powerful market skills. The company also tries to benefit the community. To make themselves a sustainable company, they have put a focus on the environment and benefiting society with their business. Recently, PepsiCo released information of their plan to drive sustainable water practices and improve rural water in Africa, China, India, and Brazil. Public Relations people have great opportunities to improve the company's reputation because of the size and financial stability of the company. PepsiCo is extremely well known in the world as a leading source of food and beverage products with immense revenue. The...
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...I. Case Title: PepsiCo 2005 Case Analysis Our Mission “Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.’ Our Vision "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today." “Our 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.” Performance with Purpose “At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose. “ “Our approach to superior financial performance is straightforward – drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.” PepsiCo: Products * Pepsi-Cola * Pepsi, Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, SOBE, Lipton… * Gatorade * Gatorade Thirst Quencher, Propel Fitness Water, Tiger Woods...
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