Case Study on Pepsi

IntroductionThis project aim is to analyze the diversification strategy of PepsiCo in 2008. PepsiCo is the largest food and beverage business in the world. The benefits of PepsiCo’s diversification strategies are identified. The business strategy is analyzed to determine its efficacy across PepsiCo’s consumer business segments and product portfolio. The value chain match ups are determined and analyzed to ascertain their relevance to the success of PepsiCo’s strategy. The competitive strengths of PepsiCo’s three structural divisions and six reporting segments are assessed and related to relevant theories and strategy tools.Summary of the casePepsiCo 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 $39.5 billio n and over 142,000 employees.The company’s portfolio of businesses in 2008 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, Aquatint, Rice-A-Roni, Aunt Jemima pan cake mix, and many other regularly consumed products. 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 established in 1965 through the mer ger 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.VisionThe 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.MissionPepsiCo’s mission is to be the world's premier consumer Products Company focused on convenient foods and beverages. They seek to produce healthy financial rewards to investors as they provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate. And in everything they do, they strive for honesty, fairness and integrity.SWOT AnalysisStrengt hsBranding – One of PepsiCo’s top brands is of course Pepsi, one of the most recognized brands of the world, ranked according to Interbrand. As of 2008 it ranked 26th amongst top 100 global brands.Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by such PepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lay’s Potato Chips, Lipton Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist.The strength of these brands is evident in PepsiCo’s presence in over 200 countries. The company has the largest market share in the US beverage at 39%, and snack food market at 25%. Such brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annual sales for the company.Finance -As one of the leading beverage and food distributors and producers in the world,PepsiCo obviously has very strong financial backing and has been performing especially well. Their basic financial statement is very promising with revenues above Coca-Cola and the highest PepsiCo has ever seen, as well as low debt and liabilities.20 PepsiCo has shown and average of six percent growth since the year 2000 and has accomplished many growth goals by acquired and manufacturing a wide range of products.The pure size of PepsiCo is a competitive advantage because they produce so many commonly used products throughout the world and are minimally leveraged by market ups and downs.Illustrating this point is their increasing ROE, ROA, and ROI ratios that have experienced great increases over the past several years where soda sales have declined Diversification – PepsiCo’s diversification is obvious in that the fact that each of its top 18 brands generates annual s ales of over $1,000 million. PepsiCo’s arsenal also includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes.This broad product base plus a multi-channel distribution system serve to help insulate PepsiCo from shifting business climates.Distribution – The company delivers its products directly from manufacturing plants and warehouses to customer warehouses and retail stores. This is part of a three pronged approach which also includes employees making direct store deliveries of snacks and beverages and the use of third party distribution services.WeaknessesOverdependence on Wal-Mart – Sales to Wal-Mart represent approximately 12% of PepsiCo’s total net revenue. Wal-Mart is PepsiCo’s largest customer. As a result PepsiCo’s fortunes are influenced by the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a higher profit margin than national brands. W al-Mart’s low price themes put pressure on PepsiCo to hold down prices.Overdependence on US Markets – Despite its international presence, 52% of its revenues originate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of changing economic conditions, and labor strikes. Large US customers could exploit PepsiCo’s lack of bargaining power and negatively impact its revenues.Low Productivity – In 2008 PepsiCo had approximately 198,000 employees. Its revenue per employee was $219,439, which was lower than its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees.Image Damage Due to Product Recall – Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products. OpportunitiesBro adening of Product Base – PepsiCo is seeking to address one of its potential weaknesses; dependency on US markets by acquiring Russia’s leading Juice Company, Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles of its consumers.International Expansion – PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India. Both initiatives are part of its expansion into international markets and a lessening of its dependence on US sales. In addition the company plans on major capital initiatives in Brazil and Mexico.Growing Savory Snack and Bottled Water market in US – PepsiCo is positioned well to capitalize on the growing bottle water market which is projected to be worth over $24 million by 2012. Products such as Aquafina, and Propel are well established products and in a position to ride the upward crest. PepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from a growing savory snack market which is projected to grow as much as 27% by 2013, representing an increase of $28 million.ThreatsDecline in Carbonated Drink Sales – Soft drink sales are projected to decline by as much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feel the impact of the projected decline.Potential Negative Impact of Government Regulations – It is anticipated that government initiatives related to environmental, health and safety may have the potential to negatively impact PepsiCo. For example, manufacturing, marketing, and distribution of food products may be al tered as a result of state, federal or local dictates. Preliminary studies on acrylamide seem to suggest that it may cause cancer in laboratory animals when consumed in significant amounts. If the company has to comply with a related regulation and add warning labels or place warnings in certain locations where its products are sold, a negative impact may result for PepsiCo.Intense Competition – The Coca-Cola Company is PepsiCo’s primary competitors. But others include Nestlà ©, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising, sales promotion initiatives undertaken by PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.Potential Disruption Due to Labor Unrest – Based upon recent history, PepsiCo may be vulnerable to strikes and other labor disputes. In 2008 a strike in India shut down production for nearly an entire month. This disrupted both manufacturing and distribution.PepsiCo’s ProblemNegligence on employe es – One of the main lacking components of PepsiCo’s values is their employees. Of the many concerns they have about the consumer and clients, little is said about the way employees are treated and what expectations and responsibilities are towards them. Programs exist that help employee’s take part in the community, and also future employees by offering school programs and scholarships. However, little effort is directed towards the responsibility of the company to employees. Coinciding with their values, objectives, and commitment, employees are left out of the  grand scheme and mayeven be considered a means to an end. The limited focus on employees may be a problemin the long-run due to retention issues and resulting lack of quality.Poor business strategy – 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 Low Productivity – In 2008 PepsiCo had approximately 198,000 employees. Its revenue per employee was $219,439, which was lower than its competitors. This may indicate comparatively low productivity on the part of PepsiCo employees.Image Damage Due to Product Recall – Recently (2008) salmonella contamination forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumer confidence in PepsiCo products.Conclusion and RecommendationOverall PepsiCo is a successful company with substantial revenue, and a large footprint in the marketplace. PepsiCo should continue to expand their growth and take advantage of potential opportunities by continuing to improve on areas at the corporate top level , in the markets that they currently are in, and in new markets and market segments that they wish to expand into and at last PepsiCo should become more proactive in the health food/product market place rather than being reactive to the market trends. They need to improve their responsiveness and future projections to market trends and changes that can therefore allude to different product segments and target markets.

Business Environment Essay Example | Topics and Well Written Essays - 2000 words - 1

Business Environment - Essay Example Therefore, it is sound to assert that the variations in demand and supply for any economic resources, and the country’s practices contribute to its growth and competence at a global platform. The following discussion seeks to highlight economic perspectives in different versions with reference to their effects to the economic environment. P4: Explanation of how economic systems attempt to allocate resources effectively Despite the two country’s economic practices, UK practices the mixed enterprise approach whereby some resources belong to the national government thus limiting any probable exploitation of the citizens (Dransfield, 2004, p. 98). For instance, the country owns majority of the shares in those firms operating in products, which seem critical for human welfare. Such a resolution enables the UK to expressly influence companies’ decision-making processes in for the benefit of the citizens’ benefit. Further, the UK is able to use the mandate expres sed by its constitution’s to influence the privatization of companies in order to create wealth to the citizens. Individuals own the remaining resources, but there are regulations enforced by the government to ensure that that the practices are ethical and beneficial to the citizens. On the contrary, the military command economy restrains the local population from the exclusive indulgence into businesses that may lead to the exploitation of resources for economic prosperity. Arguably, the country owns 95% of the industries leaving a 5% margin for its citizens. The socialist approach thus tends to practice a monopoly approach in the allocation of resources, a factor that deters increment in the GDP and leads to increased poverty levels. Economists explain that U.S.A sets an analytical approach to the economic issues and establishes fiscal policies to stimulate growth, control amount of money in supply, dictate inflation rates of the dollar, and subsequently reduce the unemploy ment levels. The United States is observant on whether the factors will affect the country positively or negatively in the end (Arnold, 2007, p. 55). Analysts describe that the US free market enterprise economy allows for the room of innovation thus; the country’s entrepreneurs have the ability to improve products that in turn lead to economic growth since they are able to earn returns on their investments, create employment, and remit taxes to the federal government (Rodrik, 2007, p. 67). P5: The impact of high taxes and high interest rates The influence of high taxes on employees is a factor born from the Keynesian theory. Theoretical arguments are that enforcement of high taxes to a country’s employee population is a significant approach to reducing the rate of inflation since the approach diminishes the rate of individual expenditures. The factual further increases productivity in the economy since the government’s accrued revenues are spent on utilities suc h as infrastructure, and the provision of other resources to the entire population (Arnold, 2007, p, 58). The approach is significant in shaping up an economy in accordance to changes in demand and supply with a perception that whenever the supply shifts to an increase or decrease, the prices will remain constant since the population will bear the existing ability to purchase a given quantity of a product. On the other hand, the impact of executing high interest to business organizations remains an ill

Films Essay Example | Topics and Well Written Essays - 250 words - 1

Films - Essay Example Furthermore, it may be believed that almost fifty years later, these directors and auteurs may have lost their magic. These thoughts could not be further from the truth. Film is an ever-changing entity, though this does not mean that what was in the past is no longer accepted in the present. The works of Scorsese, Coppola, Lucas, and Allen are still being highly praised for their unique styles. Not only have some of these directors and auteurs made new films that still hold true to their extraordinary talents, such as Scorsese’s newest animated film and Lucas’s consistent reign over the Star Wars franchise, but their older works - the ones that brought these men under a still-burning spotlight - are continuing to be held in high regard. Their style of films may not be as common today as they were decades ago, but they are still appreciated and revered. As such, the time of these men have not passed. Indeed, these men are going as strong as ever. As long as people continue to value and praise the works of these talented men, they will still be considered some of the film industry’s greatest and most unique contributors. These men may be getting along in age and experimenting with new methods of film, but they will never be past their

Autism Essay Example | Topics and Well Written Essays - 3250 words

Autism - Essay Example This paper approves that this theory alludes to the notion that autistic children fail to understand the thoughts and opinions of others. Moreover, they have difficulties in understanding other the attitudes and emotions of their parents and peers. This theory has been used to test typical children and those with mental retardation; its phenomenon seems to be distinctive for autistic children. The theory appears to be independent of intelligence. Interestingly, pre- primary children with autism have trouble understanding when others do not have an answer to their question. They are likely to get upset. These children do not realize that other people are different from them and this result to difficulties in communication and social interactions as earlier explained. Additionally, they may have difficulties understanding how to react in different situations and seem to be overly distracted at all time. This report makes a conclusion that parents or caregivers first spot symptoms of autism in the first three years of a child’s life. As earlier stated, autism is a broad-spectrum condition which means that exactly no two children will exhibit the same symptoms. In other words, autistic children have shortfalls in the following imaginative play, social awareness and verbal and non- verbal communication. The precise cause of autism is not known. Previous studies have revealed that children have a genetic inclination to autism, which means that they are predisposed to develop this condition passed on from their parents. There is ongoing research on the genes contributing to increased vulnerability. Other studies have revealed that autism develops in the uterus from an interference of early brain development. Event if there is no cure for the condition now, early detection and treatment allows for comparatively normal development of the child and reduces manifestation of undesirabl e behavior. Treatment entails special education, occupational therapy, occupational therapy, behavior modification, speech therapy and specific types of medication that manage some of the symptoms of the condition (Towel, 2013). On the other hand, medications cannot treat the basic symptoms of the condition although they can greatly manage seizures, depression, inability to focus and high energy levels. Identification of an autistic child Like all other diseases, autism has key symptoms. The signs and symptoms of the condition are diverse as it effects. Some pre- primary children may have difficult obstacles to overcome while some may present mild impairments. The bottom line is every autistic child has problems in the following areas. Thoughts and behaving flexibly, social interaction and verbal and non- verbal communication/ There are varying opinions among caregivers, health practitioners and parents on the causes and treatment of the disorder, and there is a lot that is not know n. Nevertheless, it can be agreed on that early identification and intervention makes a huge difference in an autistic child’s life (Towel, 2013). Once the child has any of these

Agricultural sector for the country Coursework Example | Topics and Well Written Essays - 250 words

Agricultural sector for the country - Coursework Example Therefore, agriculture is rated as one of the crucial economic sector in Cambodia, this is because it represents more than 30 percent of the country’s GDP. Most of the Cambodia household lives in the rural regions. With such a population, most families depend on agriculture. The agricultural sector offers employment to more than 50 percent of the population. The highest rate of employment experienced by the country was in 1998, where it recorded a rate of 78%. Most income for rural household is low, thereby resulting to food insecurity. A percentage of the Cambodia population stays in plateau region that had limited access. However, due to the contribution of agriculture to the economy, the roads are well connected to major cities. Therefore, Agriculture has remained to be one of the most important sectors in Cambodian economy, based on its share of GDP (Gross Domestic Product) in the country and contribution to

The Narcotic Addict Rehabilitation Act of 1966 Research Paper

The Narcotic Addict Rehabilitation Act of 1966 - Research Paper Example However, history shows that these drugs were once deemed to have social value. The Narcotic Addict Rehabilitation Act was established in 1966 in order to rehabilitate the drug addicts in three programs namely pretrial civil commitment, a death sentence to those convicted and voluntary (Musto, 1999). It was enacted when social construction of a drug had begun to shift from favorable to unfavorable; people utilized the pronounced the drug’s problematic physiological and psychological effects in order to control its use. Even though these concerns were beneficial, they are not the only reasons the controlled drugs are categorized within jurisdiction of the criminal justice system. Several factors including health concerns, economic, and political factors are still unknown by the public. Drugs were first utilized in the United States in the 1800. The first drug to be used was opium, which was very popular after the civil war. Cocaine was introduced in the 1880 and was used in health drinks by the Coca-Cola Company. Although, it was not a significant concern at the time with the dependency to cocaine, doctors grew a concern about the psychological effects including hallucination, depression, and psychoses. In 1906, morphine was discovered which was used for medicinal purposes prescribed by health practitioners as a pain reliever, while heroin was used to treat respiratory illness. Over the years, there has been increased awareness that these drugs have high potential for causing addiction. At the end of the 19th century, abuse of drugs such as opium and cocaine reached epidemic proportion, and the government began prohibiting their importation. The physicians were also required to label their medicines because they were no longer seen as harmless remedies for pains. The Federal Bureau of Narcotics was formed in 1930 by the Treasury Department headed by Harry Anslinger until 1962 (McWilliams, 1990). Under his tenure, the

Haptic Technology - Feeling the Future Essay Example for Free

Haptic Technology Feeling the Future Essay What is haptic technology? It’s the technology relating to or based on the sense of touch. We see it every day with our touch screen phones. It is needed to interact with your phone, computer, keyboard, mouse, car, gaming system and more! It can also be used in medicine, robotics, art, design, electronics, toys, and more! Where is the technology feeling to go? What is haptic feedback? What is haptic feedback? Haptic feedback the shake of your gaming console’s remote, the vibration of your phone, clicking of the keyboard and mouse. the interaction of touch and response (Figure 1). How does this correlate with human memory?   Memory has several categories. There is long-term memory, short-term and sensory memory. Each one plays an important part of overall memory. â€Å"They all cooperate in the process of memorization, and can be seen as three necessary steps in forming a lasting memory† (Mastin, 2012). Haptic technology uses sensory memory. What is sensory memory?   According to Mastin, sensory memory is the shortest-term element of memory. â€Å"It is the ability to retain impressions of sensory information after the original stimuli have ended. It acts as a kind of buffer for stimuli received through the five senses of sight, hearing, smell, taste and touch† (Mastin, 2012). Touch is the key word in haptic technology. How will this technology change the way we interact with computer? The interactions of computer and humans are known as human-computer-interface (HCI). Human-computer-interface (HCI) developers and engineers goals are to improve the user’s overall experience. This can be accomplished by creating a lasting memory for the end user and a good feeling of using the technology known as haptic technology. What is HCI? HCI is the study on how to better improve the interaction between human and computers. For example Human Machine Symbiosis Laboratory Department of Biomedical Informatics Arizona State University conducted a study on the Psychology of Haptics, Haptic User Interfaces and Human Motion Analysis. Their main goal for the haptic user interface study is to design effective and efficient interfaces; in psychology of haptics study they focused on the role of haptic modality in formation and retention of memory and categorization; and in the human motion study they concentrated on gesture analysis. Human computer interaction (HCI) has emerged as a focal area of both computer science research and development, and of applied social, behavioral and psychological research† (Kahol, 2010). The research team in Arizona State University focused on memory and categorization controlled experiments using mechanisms of haptic memory and categorization. They also explored whether individuals who were blind and sighted can abstract a haptic prototype from a study set; the nature of haptic space through multidimensional scaling; and haptics in early detection of Alzheimer’s disease (AD). The Arizona State University research team are concerned with design, development and testing of tactile and force feedback devices and its associated software(s). â€Å"These devices have widespread applications such as surgical simulations, medical and procedural training, scientific visualizations, assistive and rehabilitative devices for individuals who have physical or neurological disorders and assistive devices for individuals who are blind† (Kathol, 2010). The human motion research field is guided towards understanding human motion through gesture analysis. The research team from Arizona State University has developed novel gesture segmentation and gesture recognition tools for understanding and modeling human motion. They plan to develop scalable gesture segmentation and gesture recognition tools. They plan to apply the models to generic human motion as well as specialized human motion as in dance and in various scenarios such as surveillance, human computer interfaces and 3D Dance motion. Once these devices are implemented, they must remain consistent. Why you ask? Image a medical procedural being done on you. The doctor is located in different part of the world and is using new technology which allows him to operate remotely, but wait. The controls he is using are not consistent with the standard controls accepted in the USA. Will you risk your life on this doctors questionable HCI? I know I wouldn’t. Designing the right HCI is key to any successful implementation of new technology. What are some design factors to consider in the implementation of HCI and where does the future of HCI feel to go? Figure 2 User-Centric Design (SAP, 2013) One possible design process we can use is UCD. What is is UCD? User-centered design (UCD) is a design methodology and process that focuses on the needs of end users, limitations of end users, preferences of end users, and business objectives (USABILITY, 2013). The UCD has several components: plan, research, design, adapt, and measure (Figure 2). â€Å"Plan – In the Plan phase, the team determines all of the UCD activities and ensures that the necessary resources are available. Research – Before you can design a product, it is imperative that you have a clear understanding of the users goals and tasks, the market needs, and related work. Design – In the design phase, you define your system from the users perspective. Initially, this phase takes the form of use cases and an object action model, which describes the tasks that the system will support. From these tasks you create UI designs, beginning with rough sketches and ending with detailed UI design specifications. Adapt – The adapt phase acknowledges that even the best conceived designs often need to be adapted when development begins coding. This adaptation can occur as a result of unforeseen limitations in the target technology, new requirements, or missing functionality in the initial design. Measure – When the product is released, it is possible to measure its usability quantitatively. These tests measure a products effectiveness, efficiency, and satisfaction† (SAP, 2013) HCI FUTURE Microsoft researchers wrote Being Human Human Computer Interaction in the Year 2020. In the paper they state: â€Å"HCI needs to extend its methods and approaches so as to focus more clearly on human values. This will require a more sensitive view about the role, function and consequences of design, just as it will force HCI to be more inventive. HCI will need to form new partnerships with other disciplines, too, and for this to happen HCI practitioners will need to be sympathetic to the tools and techniques of other trades. Finally, HCI will need to re-examine and reflect on its basic terms and concepts. Outdated notions of the ‘user’, the ‘computer’ and ‘interaction’ are hardly sufficient to encompass all that HCI will need to attend to† (Microsoft, 2008).