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Akash p bhumit team 8 pepsiCo
- 1. Cash Flow Productivity at PepsiCo: Communicating Value to Retailers Analysis by- Akash PATIL Bhumit KOTHARI Case Blazer II
- 2. Contents Case Synopsis Problem Definition Case Inferences Case Recommendations Conclusion
- 3. Synopsis of a Case PepsiCo: Largest F & B business in US World’s largest snack company Second largest soft drink company Employed over 2,00,000 worldwide 2009 sales: $43.2 Billion Owns 19 Brands
- 4. Synopsis of a Case Competitive edge- Product differentiation & Innovation Goal- Single largest driver of Cash flow for retailers Strength- Large, sophisticated and flexible distribution & merchandising system Distribution logistics, Cross Docking Direct Store Delivery (DSD)
- 5. Synopsis of a Case Retailer Relationship Management- Team Leaders Merchandising decisions Cash Flow productivity Convincing Mercatco
- 6. Contents Case Synopsis Problem Definition Case Inferences Case Recommendations Conclusion
- 7. Problems in a Case Convince MercatCo and other retail customers to use Cash flow productivity & ROIC to make merchandising decisions Prepare for a meeting next month with MercatCo- create effective plan.
- 8. Contents Case Synopsis Problem Definition Case Inferences Case Recommendations Conclusion
- 9. Change Change 2009 2008 2007 2009 2008 Total net revenue $43232 $43251 $39474 -% 10% Operating Profit FLNA- Frito lay $3258 $2959 $2845 10% 4% QFNA- Quaker foods America 628 582 568 8% 2.5% LAF- Latin American food 904 897 714 1% 26% PAB- Pepsi American beverages 2172 2026 2487 7% (19%) EUROPE 932 910 855 2% 6% AMEA- Asia middle east and Africa 716 592 466 21% 27% Net impact on mark to market 274 (346) 19 - - PBG/PAS merger cost (49) - - - - Restructuring - (10) - - - other (791) (651) (772) 21% (16%) Total Operating Profit $8044 $6959 $7182 16% (3%) Total operating profit margin 18.6% 16.1% 18.2% 2.5 (2.1)
- 10. 2009 Total operating profit increased by 16% and margin by 2.5 points. Foreign currency reduced operating growth By 6%. Other corporate unallocated expenses increased by 21% reflecting to losses, compared to previous year. 2008 Total operating profit decreased by 3% and margin decreased by 2.1 points. Other corporate unallocated expenses decreased by 16%
- 11. 48% 23% 16% 13% Net Revenue 2009 PespiCoamerican foods PespiCOamerican Beverage PepsiCo International Europe PepsiCo international AMEA
- 12. 36% 38% 16% 10% Revenue % by segment 2009 PespiCo Americas foods PespiCo Americas Beverages PepsiCo International Europe PespiCo nternational AMEA
- 13. Contents Case Synopsis Problem Definition Case Inferences Case Recommendations Conclusion
- 14. Case Recommendations PepsiCo showing slight decrease in current liabilities. PepsiCo needs to increase the revenue. The total debt of PepsiCo is also decreasing which is very good signal for the company. Financially PepsiCo is doing good.
- 15. Case Recommendations It will help you to obtain funding if you need it. It will set out clearly the money that you need to put together to start the business and then to run it for a period. It will help prevent you from going into a business that will not be successful. It will highlight periods where your business may need extra financial help.
- 16. Contents Case Synopsis Problem Definition Case Inferences Case Recommendations Conclusion
- 17. Conclusion Company is doing good, decreasing in trend for revenue is mainly due to the current global economic crises which has affected the profit margin. PepsiCo will continue to generate solid value for our shareholders.
- 18. Thank you!