...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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...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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...Thompson−Strickland: Strategic Management: Concepts and 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...
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... 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. In terms of operational...
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...Running Head: HR OUTSOURCING AT PEPSICO HR Outsourcing at PepsiCo HR Outsourcing We all are aware with the truth that Human resources are the most crucial assets of every organization as the success of organization depends upon the management of its human resources. Ensuring the satisfaction of employees requires expert human resources department that is in reality a costly affaire for most of the organizations and due to this in present most companies are making decision regarding outsourcing their human resources management functions from offshore destinations (HR Outsourcing, 2008). Basically in this process of HR outsourcing an organization generally make use of the services of a third party for taking care of its HR functions. An organization may outsource a little or all of its HR related activities from a particular or grouping of service provides situated in offshore destinations. Role of HR Outsourcing at PepsiCo In this stream of HR outsourcing, PepsiCo is also not left behind from it as HR outsourcing plays a prominent role in its business operations. For getting various advantages of HR Outsourcing PepsiCo had selected Hewitt Associates for a 10-year deal that concentrates on HR business process outsourcing services like workforce and benefits administration, payroll and contact centre support (Bednarz, 2005). This HR outsourcing deal of PepsiCo with Hewitt Associates also concentrates on the...
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...Paulo Nazario, Onur Saka and Juliette Clark International Business Policies and Strategies, Winter Quarter 2011 11/29/11 CASE 11: PepsiCo’s Diversification Strategy in 2008 Page 1 1. BACKGROUND INFORMATION Time Country(s) Involved Key Individuals & frame MileStones Titles 1965- Headquarters in 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...
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...PepsiCo Case Study Analysis Paper Michael Gillespie Organizational Policy and Strategy, OML-450, Cohort (835) Professor Vicky Sons-Eiden September 15, 2011 PepsiCo Case Study Analysis Paper A case study analysis on PepsiCo’s diversion strategy in 2008 will be addressed in this paper. The elements that will be discussed are the vision and mission of PepsiCo, the background and history of the company, the external and internal forces of PepsiCo’s business environment, PepsiCo’s strategic marketing plan, and a conclusion and recommendations on how the PepsiCo company can improve their business strategy to stay competitive in years to come. Vision and Mission The vision of PepsiCo is to be a responsible company that supports continuous improvement of all areas across the globe in which they operate. These areas include the environment, social, and economic conditions creating a better future then the present. The mission of PepsiCo is to be the best company in the industry that provides convenient foods and beverages to the consumer. The company has a goal to provide financial benefits and growth for its shareholders as the company provides growth for its employees, its business partners, and the communities in which they are established. In all aspect of the business, PepsiCo strives to be the leader in honesty, fairness, and integrity. (PepsiCo, 2011). Company History PepsiCo Inc. was formed in 1965 when Pepsi-Cola Bottling merged with salty snack icon Frito...
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...CASE 21 PepsiCo’s Diversification Strategy in 2014 John E. Gamble Texas A&M University–Corpus Christi P epsiCo was the world’s largest snack and beverage company, with 2013 net revenues of approximately $66.4 billion. The company’s portfolio of businesses in 2014 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft-drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Cap’n Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the lineup as highly complementary since most of its products could be consumed together. For example, Tropicana orange juice might be consumed during breakfast with Quaker Oatmeal, and Doritos and a Mountain Dew might be part of someone’s lunch. In 2014, PepsiCo’s business lineup included 22 $1 billion global brands. The company’s top managers were focused on sustaining the impressive performance through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. Newly introduced products such as Mountain Dew KickStart, Tostitos Cantina tortilla chips, Quaker Real Medleys, Starbucks Refreshers, and Gatorade Energy Chews accounted for 15 to 20 percent of all new growth in recent years. New product innovations that addressed consumer health and wellness concerns were important contributors to the company’s growth, with...
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...International Finance Paper FIN/419 International Finance Paper Pepsico is one of the truly global organizations in the world with presence in many countries and offering products which are not only unique but carry a great brand value . Since Pepsi Co works in a global environment therefore its strategy is also global and focuses on achieving the strategic objectives of the firm with great greater emphasis on creating a unique set of strategies which are as applicable as they are in one country . Pepsico universally acknowledged as one of the world’s most successful companies of consumer products. Enormous awards have gone in the worlds. In 2009, Pepsico is ranked 175 in the Fortune’s. 18 brands out of its series boast an annual sales volume of over 1 billion USD, including Pepsi-Cola, Mountain Dew, Gatorade, Lay’s, Diet Pepsi, Tropicana, Doritos, Lipton Teas, Quaker Cereals, Cheetos, 7-UP, Ruffles, Aquafina, Mirinda, Tostitos, Sierra Mist, Walkers, Fritos. In addition, PepsiCo entered new markets including Japan and Eastern Europe. However, the company also had its share of crucial missteps – principal of which was entering into the fast food industry. With the purchase of Pizza Hut, Kentucky Fried Chicken and Taco Bell, PepsiCo was well on its way to building a proverbial three-legged stool. The CEO at the time, Wayne Callaway, believed that this new structure would bring the company success and referred to the three legs of the stool as being snack foods, soft drinks...
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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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...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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...PepsiCo: External Considerations Overview PepsiCo is popularly associated with its flagship product Pepsi Cola. While Pepsi Cola is a sizable portion of PepsiCo’s revenue stream, PepsiCo actually has significant revenue generated from a slew of other products and divisions such as PepsiCo Beverages North America, PepsiCo International, Frito-Lay and Quaker Foods North America (Overview, 2005). PepsiCo’s Pepsi Cola has long been second in market share to Coca-Cola and the competition between Pepsi and Coke has been the stuff of business school legend for many years. However, thanks to a series of strategic acquisitions and market entry moves internationally, PepsiCo as a company has finally overtaken Coke in overall market share and performance: “PEPSICO...has raced ahead of...Coke in overall growth rates. PepsiCo earnings last year surged 18% to $4.2 billion on revenues of $29.3 billion, up 8.5%...Coke's 11.5% earnings growth to...4.4% revenue growth to $22 billion for 2004” (Steiner, 2005, para.2). It could be said that PepsiCo has lost the cola battle but won the overall war with its archrival Coca-Cola Company. PepsiCo has done this by becoming a snack food and beverage Company with operations in more than 200 countries worldwide, over 143,000 employees both national and international and over $4 billion in revenues (PepsiCo, 2004, p.4). Increasingly, PepsiCo, as most other large MNCs have done, is relying on overseas expansion to fuel its future growth and earnings...
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...Joson, Gerard Gio R. EMG166-T Case analysis no. 11 – Pepsico’s Diversification Strategy In 2008 December 5, 2011 Overview Pepsico 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 is a world leader in convenient foods and beverages, with revenues of about $25 billion and over 142,000 employees. The company consists of the snack business of Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages and Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North America and Gatorade/Tropicana North America) and Quaker Foods North America. PepsiCo International includes the snack businesses of Frito-Lay International and beverage businesses of PepsiCo Beverages International. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. Our mission is to be the world's premier consumer products company focused on convenient...
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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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...[pic] GESTÃO ESTRATÉGICA E COMERCIAL [pic] Caso 5 PepsiCo Grupo 2 Francisco Morais, 56941 Ricardo Marcão, 58593 Índice Página Respostas às perguntas 2 Índice Figuras X Índice Tabelas X Bibliografia X Respostas às perguntas 1. What is PepsiCo's corporate strategy? Briefly identify the business strategies that PepsiCo is using in each of its consumer business segments in 2008. Desde a sua criação que a PepsiCo apostou sempre numa estratégia de diferenciação, não fosse a mesma resultante da fusão de uma marca de refrigerantes (Pepsi) com uma marca de snacks (Frito-Lay). Entre o fim dos anos 70 e o princípio dos anos 90, a empresa apostou ainda mais nesta estratégia, adquirindo cadeias de alimentação como a Pizza Hut, Taco Bell ou KFC, acabando por eventualmente vendê-las ou dar-lhes autonomia [4] [13]. No virar do século XXI, a PepsiCo voltou a focar-se nos produtos alimentares, adquirindo nos E.U.A. a Tropicana e a Quaker Oats Company e noutros países as marcas de bebidas locais que eram as concorrentes principais ou secundárias. Esta operação revelou-se um sucesso, pois todas as marcas estavam a crescer, embora lentamente, em todos os mercados, excepto a gama de refrigerantes com gás (carbonatados), nos E.U.A., onde o produto Pepsi estava a perder para a sua rival de sempre, a Coca-Cola, conforme se pode na Exhibit 8 do enunciado do Caso. Era preciso fazer algo e a solução...
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