1Running head Frito Lay North America2Frito Lay North A.docx

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Running head: Frito Lay North America
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Frito Lay North America
Frito Lay North America
Abdullah Bin Jadid
University of the Incarnate Word
Table of Contents
Mission------------------------------------------------------------------
--------------------------------------3
Introduction------------------------------------------------------------
--------------------------------------5

Factors in the Remote Environment----------------------------------
----------------------------------7
Factors in the Operating Environment ------------------------------
----------------------------------9
The External Environment--------------------------------------------
----------------------------------11
The Industry Analysis-------------------------------------------------
-----------------------------------11
A Porter’s Five Forces Analysis--------------------------------------
----------------------------------12
Strategy #3-------------------------------------------------------------
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Strategy #4-------------------------------------------------------------
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Conclusion--------------------------------------------------------------
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References--------------------------------------------------------------
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Mission Statement
Per Pearce, J.A. & Robinson, R.B, the company mission is a
broadly framed but enduring statement of a firm’s intent. It
embodies the business philosophy of the firm’s strategic
decision makers, implies the image the firm seeks to project,
reflects the firm’s self-concept, and indicates the firm’s
principal product or service areas and the primary customer

needs the firm will attempt to satisfy. In short, it describes the
firm’s product, market, and technological areas of emphasis,
and it does so in a way that reflects the values and priorities of
the firm’s strategic decision makers. An excellent example is
the company mission statement of Nicor Inc., shown in Exhibit
2.1, Strategy in Action. (p. 23)
As stated by Frito-Lay, the vision from their official website is
“At Frito-Lay, we’re all about good fun — from making tasty
snacks to get your party started to taking care of our 50,000
employees who know how to find the fun in everyday
challenges. As a proud member of the PepsiCo family,
Performance with Purpose is what we work to achieve every
day. And to us, that means creating the high-quality snacks our
fans deserve, while caring for our people, communities and the
environment we share” F. (2017). Furthermore, Frito-Lay is the
manufacturer of over 40 different snack products. Together with
Pepsi-Cola, Frito-Lay is responsible for satisfying snack urges
to billions all over the world. Frito-Lay truly is the world's
favorite snack and is always within arm's reach S. (1970,
January 01).
Frito-Lay Leaderships are:
Vivek Sankaran is president and chief operating officer (COO)
of Frito-Lay North America, Inc. Hari Avula is chief financial
officer of Frito-Lay North America. Kristen Blum is senior vice
president and CIO for Frito-Lay North America. David Flavell
is senior vice president and general counsel of Frito-Lay North
America together with PepsiCo Latin America. Ted Herrod is
the senior vice president of Sales Transformation for Frito-Lay
North America. Michael Hourihan is vice president of
Procurement and Market Supply Officer for Frito-Lay North
America. Chris Kuechenmeister is vice president of
Communications for Frito-Lay North America. Jason is
president of PepsiCo Foods Canada. Dr. Jonathan McIntyre is
senior vice president of PepsiCo Research & Development,
Global Snacks Category. Patrick McLaughlin is senior vice
president of human resources and chief human resources officer

for Frito-Lay North America. Randy Melville is senior vice
president and general manager of Frito-Lay North America.
Craig Musgrove is currently senior vice president of National
Sales - Large Format and e-commerce for Frito-Lay North
America. Jennifer Saenz serves as senior vice president and
chief marketing officer of Frito-Lay North America. Leslie Starr
Keating is senior vice president of PepsiCo’s North America
Foods Supply Chain. Chris Turner is senior vice president of
Strategy for Frito-Lay North America. Kevin Vivian serves as
senior vice president of National Sales - Immediate
Consumption for Frito-Lay North America. Steven Williams is
the senior vice president of the East Division of Frito-Lay. F.
(2017)
Introduction
Frito Lay North America is one of the most successful as well
as resilient companies in the Food Industry. This is evident in
the fact that the company has been in existence since the year
1961. The company started as two companies that existed
independently in the 1930 and existence as Frito-Lay started in
the year 1961. The resilience and success that the company has
registered over the years can be attributed to its strengths as
well as strategy. Many companies have not been capable of
surviving over the period especially due to times of financial
recessions which weighed them down. One of the key strengths
that the company has is diversity in the products that it offers to
its customers. Ensuring that its products are of top quality
through improvements over the years has also contributed to the

success that the company has continued to register over the
decades. This has ensured that the products are satisfactory and
in line with the expectations of the customers. The strategic
aspect of Frito lay was in the merger with Pepsi-Co in the year
1965. The market share of the company in the United States
alone comprises 40% of snacks that are sold in the whole
market while it is a global leader in the snacks products. Frito
Lay North America has been a great success and this is evident
in that the sales of Frito Lay comprise above 30% of the total
sales on an annual basis. Frito Lay North America is highly
detrimental to the operations of the company as whole
especially given that operations regarding research and
development of the products of the company takes pace here.
The operations of sales and more importantly distribution of the
products of the snacks food products in the United States as
well as in Canada take place in North America as well, further
making it an essential organ and section of the company. The
leadership at Frito Lay North America has also been key to its
success (Walker, 2013). Various leadership positions and the
holders of these positions have their duties and tasks clearly
outlined. The company culture of ensuring that the needs of
customers are a priority and innovation to produce new and
improved products has been its core as well. Given that the
technology has become part of businesses and organizations in
the current era, the company continues to exploit technology in
its operations locally and in its global market environment.
Technology has helped promote efficiency as well as delivery in
an efficient manner to meet the expectation of the company’s
consumers. Employees play a major role in the determination of
the success that a business or an organization registers. Frito
Lay North America considers its employees a huge asset and
takes a broad range of actions to ensure that the employees feel
appreciated. The employees are made to personalize and feel
happy at work, an aspect that aims at enhancing their
satisfaction at work and motivation to work hard. The
achievements that the company has had have essentially been

due to a dedicated and highly productive workforce (Villegas, &
Barrar, 2006).
Thesis Statement
Frito Lay North America is one of the operating divisions of
Frito-Lay Company, a division that has been critical to the
success that the company has been capable of registering due to
the various operations that are undertaken as well as the
leadership capabilities that are unique.
Factors in the Remote Environment.
The remote environment in a business or organization is an
environment that constitutes of factors that come from beyond
and are irrespective of any particular firm’s operating
condition: social factors, political factors, economic factors,
ecological factors and technological factors. The remote
environment can present an organization or business with
threats, constraints or opportunities and the organization rarely
employ some meaningful reciprocal impact. The remote
environment surrounding the Frito Lay North America Company
greatly influences the progress of the company in either a
negative or a positive manner, the company may either find
solutions to minimize the threats and constraints that it may
face or make the necessary adjustment in case of constraints and
threats that cannot be changed so as to ensure they remain in the
market. The company should be keen in ensuring that they
utilize all the opportunities presented in the remote environment
to make sur that they keep up with the fast-growing food
industry with one of the opportunities being presented being
technological advancement since the world is turning into a

technological era.
The economic factors that have an impact on the operations of
the Frito Lay North America include; general credit availability,
North American’s propensity to save, North American’s
disposable income levels, inflation rates, gross domestic
product growth and the interest rates in North America. The
growth rate of the gross domestic product in North America is
high by 2009 it was at 2.4% this is a growth rate that has a
positive impact on the growth of the Frito Lay North America
Company (Engerman & Gallman 1986). A positive growth rate
leads to increase in job opportunities that leads to an increase in
people’s disposable income thus enabling people to spend more
on products and services. Frito Lay North America benefits due
to increase in demand for their products, this leads to increase
in profitability due to increased sales volume. The inflation rate
in North America was estimated to be around 0.62 in 2015 this
is a low rate that means well to the operations of Frito Lay
North America. This is because low inflation leads to stable
demand and supply factors thus the company conducts its
business and is able to supply products to their customers thus
increasing their sales volume as prices are favorable and stable.
The highest lending interest rate in North America is currently
estimated to be around 3.42% the highest rate, this is a
relatively low rate that indicates that there is availability of
credit in the state. This means that people can easily access
credit this increases their disposable income therefore
increasing the sales volume of Frito Lay North America.
The social factors that the company faces include the changing
taste and preferences of their customers, Frito Lay North
America has to ensure that it keeps up with this changes in
order to attract and retain their customers. The company’s
reputation is very important as it creates a negative or positive
impression to the customers and it may attract or discourage
potential customers (MarketLine 2016). The political factors in
North American creates constraints and threats to the Frito Lay
North America especially due to the presidential elections that

passed, the customers may prefer retaining their money rather
than spending since they are uncertain about the economic
conditions. Alterations in drug and food laws in North America
has a negative impact towards the sale of food products thus
may cause constraints on the operations of Frito Lay North
America.
Technological factors may cause threats, constraints or lead to
opportunities to the Frito Lay North America it all depends on
how the company will handle these factors. North America has a
high technological industrial economy; this gives opportunities
for organization to advance in technological changes globally.
Frito Lay North America should make use of this economy to
ensure that it keeps up with the global technological
advancement that will enable it to innovate and come up with
high quality differentiated products. The rapid technological
advancement may lead to increased cost on companies that have
low technology and this may lead to them going out of the
market due to high competition, Frito Lay North America
should ensure it is not among these companies. Frito Lay North
America is in the food industry and this industry is mostly
affected by ecological factors since agriculture being the main
raw material in this industry is highly affected by climatic
change. Water plays a major role is the production of Frito Lay
North America products thus the company should come up with
measures to ensure that they minimize water consumption and
help in environmental sustainability that creates a good
impression on customers and therefore attracting more
customers.
Factors in the Operating Environment.
The operating environment of an organization constitutes of
factors that are in competitive situation that impact’s an
organization’s success that help in acquiring resources that are
needed or in enhancing profitable marketing of the company’s
goods and services. Factors that may affect Frito Lay North
America in the operating environment include; first the
organization’s competitive position, Frito Lay North America is

renowned for its great advertisement capability this is among
the factors that has brought great success to the company over
the years. Advertising products enhances customer’s loyalty and
it attracts potential customers, this has made the company to
keep up with the competition in the snack industry that has a
stiff competition especially in North America and it has
achieved 59% of people that eat snacks. The other factor that
has made Frito Lay North America, competitive is the
innovative capability of the organization, over the years the
company has come up with new and differentiated products that
are preferred by many customers. The most leading product
being “Ranch Kettle Cooked Chips” that is highly demanded
and has boosted the company’s success. The company’s
competitive position is also attributed to the company’s ability
to produce products that satisfy their customer’s tastes and
preferences through producing the flavors that their customers
crave this has helped in beating many snacks in the market.
The second factor is the company’s customers, Frito Lay North
America has not been able to capture the elite class customers
in most of their snacks especially chips, this is because most of
the people in the elite class do not like chips as they are
believed to have been fried using pig fat. Frito Lay North
America mostly offers unhealthy snacks thus most people shy
away from buying this snacks especially the wealthy consumers
as they are health-oriented (Schlosser 2012). Frito Lay North
America should come up with a group of healthy snacks so as to
attract more customer base.
The third factor is the organization’s capability to attract
qualified employees. Over the years Frito Lay North America
has made it their business to ensure that they offer a good
working condition for their employees and it ensures that their
employees are a top priority. The company ensures that the
employees benefits are available they include health and life
insurance covers and benefits as well as retirement benefits thus
attracting qualified employees.
Business enterprises are normally surrounded by various that

are either occurring inside the enterprise or as a result of the
surrounding environment. The two factors are either those that
are classified under internal or external factors are both very
essential for any business organization to able to survive in a
competitive venture. The factors that are classified under the
internal environment are those that normally affect the business
enterprise from within thus the business can have control over
them if they handle them in a manner that would bring positive
results to the company.
The External Environment
The external environment is referred to factors normally impact
a business enterprise from within thus causing either positive or
negative impact on the company’s performance and growth. The
external environment is not controllable. Those that are given
the managerial position of a business have no influence over
business contenders, or changes to law, or general monetary
conditions. However, the administrators of a business or
association do have some measure of control with reference to
how the business responds to changes in its outside condition.
The same case applies to Frito lay company which is
categorized under food and beverages section. Therefore, this
piece of work is going to focus on the external environment of
Frito lay company following the five Porter’s forces of analysis.
The Industry Analysis
Frito lay company is mostly affected by the following factors.
Political Factors: As a traded on an open market enterprise,
Frito-Lay is required to take after each appropriate corporate
direction set by the central government. Lay's must likewise
keep any generation controls executed by the legislature, for
example, points of confinement to Trans Fat use, limitations on
bundling materials, and so on. These creation directions
likewise stretch out to work confinements, which differ
contingent upon the nation; in this manner, wherever Lay's
delivers its Classic chips, it must hold fast to the work laws set
up in that nation.

Economic Factors-Lay’s primary economic concern likely stems
from the presence of its competitors in the snack food industry,
since there generally isn’t a great deal of customer involvement
when choosing to purchase a bag of chips-In addressing its
presence in the snack food market, Lay’s must necessarily study
the products, marketing strategies, research and development
initiatives, and other important business aspects of competitors,
such as Nabisco and Pepperidge Farm. As it said, for any
business institution to be able to grow in terms of financial
profit in a competitive environment it has to be aware of the
external factors that are likely to hold it backwards if not taken
with the seriousness that they deserve. This is the secret behind
the prosperity of the Frito lay company as it has focused on the
environmental factors in order to continue thriving and
remaining on top of the industry in a such a competitive
environment.
A Porter’s Five Forces Analysis
Some of the key external environment factors that affect Frito
lay North America are: Current economic conditions-The
prevailing economic state of the countries where a company is
situated will affect the spending trends of residents
(Bornscheuer et al ,2015). Increments in financing costs as well
as an abnormal state of unemployment will discourage
utilization of trivial merchandise and enterprises. For instance:
at the point when individuals encounter budgetary hardship,
they will spend significantly less on game and entertainment,
occasions, new autos and extravagance merchandise.
Competition-The other external factor that surrounds the Frito
lay company is competition. The reason as to why completion is
categorized under this section is because the competitors affect
a company from the outside part. As a factor of concern,
competition continues to increase every day due to the
emergence of new competitors and the improvement of
commodities by the existing firms. Frito Lay Company in the
past has been able to cope up with the increasing competition to

from force of Suppliers -This compels addresses how
effortlessly providers can drive up the cost of merchandise and
ventures. It is influenced by the quantity of providers of key
parts of a decent or administration, how remarkable these angles
are and the amount it would cost an organization to change
starting with one provider then onto the next. (Grossberg,
2016). The less number of providers and the more an
organization relies on a provider, the more power a provider
holds. Frito lay has been able to thrive in business since it owns
the power of supply as it ensures that its commodities are
consumed and availed in all retail centres like supermarkets.
Capability of New Entrants into an Industry-An organization's
energy is additionally influenced by the disadvantages of new
participants into its market. The less cash and time it costs for a
contender to enter an organization's market and be a viable
contender, the more an organization's position might be
fundamentally debilitated. In the food industry, this kind of
trend has been happening thus leading to new competitors to the
Frito lay company. The new competitors for Frito lay company
are mondelez and Kellogg’s. This has in return forced the
company to come up with new strategies of curbing the
competition (Chao et al 2016).
Monetary conditions -These are worldwide also national, and
when there is worldwide money related emergence as in 2007,
changes in the outer condition can be emotional. For instance,
in 2005, soda annual sales in the United States dropped without
precedent for a long time. Coca-Cola sold 2% less cases, and
Pepsi's aggregate case volume diminished by 3.2%. Frito-Lay's
business development tumbled from 11 percent in 2000 to 7
percent in 2001 to just 5 percent in 2002. One reason was that
its private-name snack contenders were offering their items at
lower costs than Frito-Lay. Likewise, Frito-Lay was moving
into more advantageous snacks, for example, heated chips,
putting Frito-Lay in firm rivalry with organizations, like
General Mills and Kraft. PepsiCo acknowledged it needed to
discover approaches to expand its net revenues. Today, there are

many Pepsi item and bundling arrangements, contrasted with 50
just a few years ago and store rack space has not expanded to
oblige every one of these things. Pepsi must discover better
approaches to offer, cost, advance, and convey its soda pops and
different items at far less cost (Blosch et al , 2015).
Risk of Substitutes.
Contender substitutions that can be utilized as a part of place of
an organization's items or administrations represent a risk. For
instance, if clients depend on an organization to give an
instrument or administration that can be substituted with
another apparatus or benefit or by playing out the assignment
physically, and this substitution is genuinely simple and of
minimal effort, an organization's energy can be debilitated.
Frito lays product has been faced with substitutes especially
since most of them have got high level of cholesterol.
The success of the company has not been without vain since as
evidenced in the above essay the company has had to deal with
numerous factors that were derailing its progress. The company
also continues to improve its commodities in order to be able to
control the external environment which poses a threat to its
resources. Therefore, the external factors cannot be taken for
granted since the serious in whom they are taken determines a
lot the success of a business.
References
Blosch, K., Phua, V., & Silva, J. (2015). Frito-Lay-Supply

Chain Impact Analysis.
Bornscheuer, U., Brundiek, H., Evitt, A., SaB, S., Bonisch, F.,
& Kourist, R. (2015). U.S. Patent No. 8,975,055.
Washington, DC: U.S. Patent and Trademark Office.
Chao, M. C. H., & Florenthal, B. (2016). A comparison of
global companies' performance on Twitter and Weibo.
International Journal of Business Environment, 8(3), 242-264.
Engerman, S. & Gallman, R. (1986). Long-term factors in
American economic growth. Chicago: University of Chicago
Press.
Frito-Lay - Good Fun! Retrieved January 26, 2017, from
http://www.fritolay.com/company
Frito-Lay Mission Statement. Retrieved January 26, 2017, from
http://dangerouslycheese-z.blogspot.com/2013/02/frito-lay-
mission-statement.html
Grossberg, K. A., & Grossberg, K. A. (2016). The new
marketing solutions that will drive strategy implementation.
Strategy & Leadership, 44(3), 20-26.
MarketLine. (2016). Frito-Lay North America, Inc. – Strategy
and SWOT Report. Retrieved from http://www.just-
food.com/market-research/frito-lay-north-america-inc-strategy-
and-swot-report_id254915.aspx
Pearce, J.A. & Robinson, R.B. (2015). Strategic management:
Planning for domestic & global competition (14th ed.). NY:
McGraw Hill Education.
Schlosser, E. (2012). Fast food nation: The dark side of the all-
American meal. Houghton Mifflin Harcourt.
Villegas, F., & Barrar, P. (2006). Supply Chain Dynamics, the
case of FRITO-LAY in Latin America. OR Insight, 19(4), 14-
34. doi:10.1057/ori.2006.16
Walker, A. (2013). Frito-Lay North America/NREL CRADA:
Cooperative Research and Development Final Report, CRADA
Number CRD-06-176. doi:10.2172/1087785

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