INTRODUCTION. PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American multinational corporation headquartered in Purchase, NY with interests in manufacturing and marketing a wide variety of carbonated and non-carbonated beverages, as well as salty, sweet and grain -based snacks, and other foods. Their main product, Pepsi Cola, sells over 100 billion cans a year. Besides the Pepsi-Cola brands, the company owns other brands such as Quaker Oats, Gatorade, Frito-Lay, Tropicana, Copella, Mountain Dew, Miranda and 7-Up (outside the USA). PepsiCo has 18 different product lines that offers a variety of high quality products providing refreshment and nutrition. PepsiCo brands are available in nearly 200 countries and union territories. It is the 2nd largest manufacturer of soft drinks in the world.
CONT’D PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired and PepsiCo merged with the Quaker Oats Company, including Gatorade . Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. Operations grew rapidly in the 1950’s. Key international markets include Argentina, Brazil, China, India, Mexico, Philippines, Saudi Arabia, Spain, Thailand and the United Kingdom. PepsiCo Beverages International, also produces, sells and distributes Gatorade sports drinks as well as Tropicana and other juices internationally. In the 1970s and 80s PepsiCo bought restaurant chains such as Pizza Hut, Taco Bell, and Kentucky Fried Chicken which was later changed to KFC, but in 1997 it spun off its restaurant business into a separate company, Tricon Global Restaurants.
Indra Krishnamurthy Nooyi , who was rankedNo. 11 in Fortunes list of the most powerfulwomen in business, joined the company in 1994and was named CEO in 2001. She was born inIndia and has done her education in India . She has been the chief executive of PepsiCosince 2006. During her time, healthier snackshave been marketed and the company is strivingfor a net-zero impact on the environment. Thisfocus on healthier foods and lifestyles is part ofNooyis "Performance With Purpose" philosophy.
WORLD’S HEADQUARTERS PepsiCo World Head quarters is located in Purchase at New York.
Soft drinks, more popularly known as sodas, are notexactly referred to as items of necessity. Sodas standbetween liquor and juice. Those who are too young todrink beer but think fruit juice is too juvenile will go onto sodas.
Frito-Lay merged with Pepsi-Cola in 1965.Frito-Laybrands account for 59% of the U.S. snack chip industry.The Frito Lay delivers a wide variety of fun andenvironmentally friendly foods in around 160 countriesand territories.
PepsiCo acquired Tropicana in 1998. Today the Tropicanabrand is available in 63 countries. Tropicana’s pure andfresh fruit juice in easy to handle packages has attractedthe consumers.
PepsiCo merged with The Quaker Oats Company in 2001.Quakers power-packed line of popular brands expandscompanies portfolio with a wide range of healthy foodchoices.
Gatorade sports drinks was acquired by the Quaker OatsCompany in 1983 and became a part of PepsiCo with themerger in 2001. Gatorade is the first isotonic sports drink.Created in 1965 by researchers at the University of Florida forthe schools football team, "The Gators," Gatorade is now theworlds leading sports drink.
PepsiCo is organized in three business units, as follows: PepsiCo Americas Foods (PAF), which includes Frito-Lay North America, Quaker Foods North America and all of our Latin American food and snack businesses (LAF). PepsiCo Americas Beverages (PAB), which includes PepsiCo Beverages North America and all of our Latin America beverage businesses. PepsiCo International (PI), which includes all PepsiCo businesses in the United Kingdom, Europe, Asia, the Middle East and Africa. PepsiCos three business units were comprised of six reportable segments, as follows:
CONT’D… Frito-Lay North America (FLNA) FLNAs most significant properties include its headquarters building and a research facility in Plano, Tex., both of which are owned. FLNA also owns or leases approximately 40 food manufacturing and processing plants and approximately 1,750 warehouses, distribution centers and offices. FLNA also utilizes approximately 55 plants and production processing facilities that are owned or leased by contract manufacturers or co-packers. Quaker Foods North America (QFNA) QFNA owns a plant in Cedar Rapids, Iowa, which is its most significant property. QFNA also owns or leases five plants and production processing facilities in North America. QFNA utilizes approximately 25 manufacturing plants, production processing facilities and distribution centers that are owned or leased by our contract manufacturers or co-packers
CONT’D Latin America Foods (LAF) LAFs most significant properties include a food plant in Celaya, Mexico, and three snacks plants in the Mexican cities which are owned. LAF also owns or leases approximately 50 food manufacturing and processing plants and approximately 660 warehouses, distribution centers and offices. LAF also utilizes one plant facility that is owned by a contract manufacturer. PepsiCo Americas Beverages (PAB) PAB also owns or leases approximately 40 plants and production processing facilities and approximately 50 warehouses, distribution centers, and offices. In addition, authorized bottlers in which they have an ownership interest own or lease approximately 65 bottling plants. PAB also utilizes approximately 70 plants and production processing facilities and approximately 60 warehouses and distribution centers that are owned or leased by contract manufacturers or co-packers.
CONT’D United kingdom and Europe Europes most significant properties are its snack manufacturing and processing plants located in U.K., each of which are owned. Europe also owns or leases approximately 35 plants and approximately 320 warehouses, distribution centers and offices. In addition, authorized bottlers in which they have an ownership interest own or lease seven plants and approximately 30 distribution centers. Europe also utilizes approximately one plant and production processing facility and approximately two distribution centers that are owned or leased by contract manufacturers. Asia, Middle East & Africa (AMEA) AMEAs most significant properties are its beverage plant located in Shenzhen, China, and its snack manufacturing and processing plant located in Tingalpa, Australia, each of which are owned. AMEA also owns or leases approximately 100 plants and approximately 1,100 warehouses, distribution centers and offices. In addition, authorized bottlers in which they have an ownership interest own or lease approximately 25 plants and 120 distribution centers. AMEA also utilizes two plants and production processing facilities that are owned or leased by contract manufacturers.
o PepsiCo and its partners have invested more than US$ 700 million in India - building businesses, which today provide direct or indirect employment to more than 150,000 peopleo PepsiCo entered India’s hot beverages category in2003 through a tie-up with Hindustan Lever Ltd.,a leader in hot beverages and owner of the Lipton brand. To produce its beverages, PepsiCo has 37 bottling plants in India, including 17 company-owned plants and 20 owned by franchisee partners.o FritoLay India is one of the market leaders in the Indian snack foods segment and has other brands like Cheetos (potato wafers), Qauker Oats and Aliva low fat baked biscuits. The Lays potato chips, however, dominates the other brands.
o Frito-Lay, the snack food division of PepsiCo India, is contemplating export of indigenously-developed products Kurkure and Aliva to markets such as the US and UK. Kurkure, a cheeto-like snack is already exported to Pakistan. Aliva, a cracker launched last year, is yet to be exportedo The flavor concentrates used to make soft drinks are produced at a separate state-of-the-art plant at Channo in the Sangrur district of Punjab and supplied all across South Asia.o PepsiCo has invested heavily in building local production facilities and transferring agro technology to the country. The company also undertakes contract farming across the country to source raw materials for its products.
SWOT ANALYSIS. This SWOT analysis also shows PepsiCos internal strengths such as their experienced management team, a competitive product line, a global marketing realm, and the continuous efforts by their research and development to research trends in the industry and to be creative in exploiting those trends. A few weaknesses lie in the fact that the company is so large and could possibly lose focus or have internal conflict problems. Some possible opportunities noted in the SWOT analysis are the growing markets for specialized ethnic foods and healthier food products. Another opportunity is that the income of consumers is high enabling them to be less price sensitive, and convenience is becoming evermore important not only to the United States but to many countries around the world. A few of the threats PepsiCo must stay aware of are the ease of reliability of its product line, the almost pure competition in pricing for its products, and the quickness of technological advances causing existing products to be no longer the most advanced.
FINANCE. PepsiCo shares are traded principally on the New York Stock Exchange in the United States. The company is also listed on the Amsterdam, Chicago, Swiss and Tokyo stock exchanges. PepsiCo has consistently paid cash dividends since the corporation was founded. There are more than 53 million shareholders of Pepsico company.
MARKETING In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public. In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise Muck, to coincide with the United States bicentennial celebration. In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing." In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of their background designs includes a string of repetitive numbers 73774. This is a numerical expression from a telephone keypad of the word "Pepsi."
CONT’D In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a minimalist label design. The redesign was comparable to Coca-Colas earlier simplification of their can and bottle designs. Also in 4th quarter of 2008 Pepsi teamed up with Google to produce the first daily entertainment show on YouTube, Pop tub. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Pop tub is updated daily from Pepsi. Since 2007, Pepsi, Lays and Gatorade have had a "Bring Home the Cup," contest for Canadas biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or essays) for a chance at winning a party in their hometown with the Stanley Cup and Mark Messier. In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new installment of the campaign asks for team involvement and an advocate to submit content on behalf of their team for the chance to have the Stanley Cup delivered to the teams home town by Mark Messier.
CONT’D Pepsi has official sponsorship deals with three of the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is just one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing. On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia over three years, bringing the total Pepsi investment in the country to $4 billion. In July 2009, Pepsi started marketing itself as Pecs in Argentina in response to its name being mispronounced by 25% of the population and as a way to connect more with all of the population.
CONT’D In October 2008, Pepsi announced that it would be redesigning its logo and re-branding many of its products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi Max began using all lower-case fonts for name brands, and Diet Pepsi Max was re-branded as Pepsi Max. The brands blue and red globe trademark became a series of "smiles," with the central white band arcing at different angles depending on the product. Pepsi released this logo in U.S. in late 2008, and later it was released in 2009 in Canada (the first country outside of the United States for Pepsis new logo), Brazil, Bolivia, Guatemala, Nicaragua, Honduras, El Salvador, Colombia, Argentina, Puerto Rico, Costa Rica, Panama, Chile, Dominican Republic, the Philippines and Australia; in the rest of the world the new logo will be released in 2010, meaning the old logo has been phased out entirely (most recently, France and Mexico switched to Pepsis current logo). As of Present, The UK has started to use the new Pepsi logo on cans in an order different from the US can. Pepsi and Pepsi Max cans and bottles in Australia now carry the localized version of the new Pepsi Logo. The word Pepsi and the logo are in the new style, while the word "Max" is still in the previous style. Pepsi Wild Cherry has finally received the 2008 Pepsi design in March 2010
HUMAN RESOURCE POLICIES. PepsiCo always strive to: Care for customers, consumers and the world we live in. They are driven by an intense, competitive spirit in the marketplace, but they direct this spirit towards solutions that achieve a win for each of there constituents as well as a win for the corporation. Sell only products company can be proud of. This principle extends to every part of the business, from the purchasing of ingredients to the point where the products reach the consumer’s hands. Speak with truth and candor. They speak up, telling the whole picture, not just what is convenient to achieving individual goals. In addition to being clear, honest and accurate, they take responsibility to ensure that communications are understood. Balance short term and long term. The company make decisions that hold both short- term and long-term risks and benefits in balance over time. Without this balance, they cannot achieve the goal of sustainable growth.
CONT’D Win with diversity and inclusion. PepsiCo leverage a work environment that embraces people with diverse backgrounds, traits and different ways of thinking. This leads to innovation, the ability to identify new market opportunities, all of which helps develop new products and drives the companies ability to sustain there commitments to growth through empowered people. Respect others and succeed together. The company is built on individual excellence and personal accountability, but no one can achieve our goals by acting alone. They give importance to people who have the capability of working together in structured teams or informal collaboration. A spirit of fun, the value they put on teamwork has made the company which people enjoy being part of, and this enables them to deliver world-class performance.