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Strategic Management Concepts for:

Strategic Management Concepts for by Crystal McMahan

History of Pepsi:

History of Pepsi 1898- Recipe for Pepsi created in New Bern, North Carolina by Caleb Bradham 1902- Pepsi-Cola Company created 1932- Frito Company and H.W. Lay Company were formed 1961- Frito-Lay Company formed by merger 1965- Pepsi Cola and Frito-Lay merge to form PepsiCo

Vision and Mission Statements:

Vision and Mission Statements Vision Statement- 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. Mission Statement- 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.

Strategic Leadership:

Strategic Leadership Indra K. Nooyi Chairman and Chief Executive Officer, PepsiCo Zein Abdalla President, PepsiCo Albert P. Carey Chief Executive Officer, PepsiCo Americas Beverages Brian Cornell Chief Executive Officer, PepsiCo Americas Foods Saad Abdul- Latif Chief Executive Officer, PepsiCo Asia, Middle East, Africa Enderson Guimaraes Chief Executive Officer, PepsiCo Europe

PepsiCo Brands:

PepsiCo Brands Pepsi Tropicana Gatorade Quaker Oats Frito-Lay

Resources:

Resources Brand Equity Technology Capital Locations Strong Leadership Global Infrastructure Trademarks Patents

External Environment:

External Environment Political- Opening of market in China has had a huge impact on international growth Economic- Sales growth not as effected by economic downturn as other companies Socioculture - Increased desire for American products abroad has driven sales increase Technological- Uses technology to decrease costs and increase product quality Environmental- Farming can be effected and increase costs to decrease profit margins Legal- International markets with high government regulation can increase competition

Business Strategy:

Business Strategy PepsiCo uses Differentiation to gain a competitive advantage Develop Brand Equity Sell in Most Markets Win Customers through Brand Image The Pepsi logo is well-know thru out the world.

Business Strategy for Dynamic Contexts:

Business Strategy for Dynamic Contexts PepsiCo has shifted to healthier snack food options to keep up with the shift in market needs. Recent changes include: Ruffles unveils new packaging to reflect its switch to 100% pure sunflower oil Flat Earth Fruit and Vegetable Crisps hit stores nationally SoBe Lifewater launches first-ever, zero-calorie, naturally-sweetened enhanced water in the US PepsiCo creates Baked Snacks North America Business Unit to meet consumer’s interest in more nutritious snacks and foods Frito-Lay commits to making 50% of its product portfolio made with all natural ingredients Sierra Mist goes Natural in response to consumer demand

Developing Corporate Strategy:

Developing Corporate Strategy Diversification- In 1965 Pepsi-Cola merged with Frito-Lay to form PepsiCo In 1968 PepsiCo purchased North American Van Lines In 1970 PepsiCo bought Wilson Sporting Goods PepsiCo acquires Pizza Hut, Inc. in 1977, Taco Bell in 1978 and Kentucky Fried Chicken in 1986

International Strategy:

International Strategy Four Sectors of Operation- PepsiCo Americas Beverages PepsiCo Americas Foods PepsiCo Europe PepsiCo Middle East and Africa Modes of Entry- Direct Exports Joint Ventures Licensing/Franchising Acquisition

Alliances and Cooperative Strategies:

Alliances and Cooperative Strategies Strategic Alliances have been an important part of PepsiCo’s Global Strategy. They can be used to gain access to customers in countries where it might otherwise be difficult to get entry. Some alliances include: Tingyi- Beverage operations in China Suntory- Beverage operations in Japan and Vietnam Calbee - Snack food operations in Japan Ocean Spray- Beverage operations in Latin America Lipton- Beverage operations in India

Mergers and Acquisitions:

Mergers and Acquisitions In 1998 PepsiCo purchased Tropicana Products. This brought in an expanded product line in the form of juice . In 2001 PepsiCo merged with Quaker Oats. This brought in the Quaker brands and Gatorade.

Organizational Structure :

Organizational Structure Multidivisional Structure- PepsiCo Americas Beverages (PAB) includes PepsiCo Beverages Americas and Pepsi Beverages Company. PepsiCo Americas Foods (PAF) includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin America food and snack businesses (LAF), including our Sabritas and Gamesa businesses in Mexico. PepsiCo Europe includes all beverage, food and snack businesses in Europe . PepsiCo Asia, Middle East & Africa (AMEA) includes all beverage, food and snack businesses in AMEA.

External Causes for Organizational Failure:

External Causes for Organizational Failure Economic- Monetary crises, interest-rate hikes and slackening of demand are some economic problems which a company might face. Because of it's broad global portfolio, Pepsi can decrease the overall impact of these changes. If one country is experiencing an economic decline, the other countries where Pepsi does business keep the company making a profit . Competitive- Entry of new companies or the merger of two competitors can change the competitive landscape. Pepsi has such a huge share of the market, it would be difficult for any new competitor to take a significant piece. They have such good economies of scale, a new competitor is not likely to be able to gain a price advantage . Social- Pepsi has adjusted to social changes by offering healthier, low-fat options to health conscious consumers. They regularly adjust their product offerings to stay in line with customer desires . Technological- Pepsi stays on the cutting edge of technology in all aspects of their businesses. From bottling plants, transportation modes and even farming technology that supports its products.

Strategic Risks:

Strategic Risks Biggest Risk- Further shift towards more health conscious environment Soft Drinks have the biggest profit margin Obesity rates have reached epidemic levels Fewer parents and schools allowing soda Solution- Continued shift towards more healthy choices

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