PepsiCo Strategic Plan
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PepsiCo Strategic Plan
By Student Name
AMU/APU BUSN 620
PepsiCo Strategic Plan
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PepsiCo Strategic Plan
Summary
PepsiCo is the largest food and beverage business in the United State (PepsiCo, 2012).
They own many top leading brand name snack foods and beverages, of which 22 of them bring
in over one billion dollars in annual sales each (PepsiCo, 2013). Some of these popular brands
include Pepsi-Cola, Frito-Lay, Tropicana, Quaker, and Gatorade (PepsiCo, 2013). Along with
being the number one food and beverage business in the United States, PepsiCo is the second
largest food and beverage company in the world (PepsiCo, 2012). PepsiCo products can be found
in over 200 countries around the world (PepsiCo, 2013). The sale of snack foods accounts for
more than half of PepsiCo’s total revenue made (Wikinvest, 2013). Of PepsiCo’s total revenue,
about 48% of total sales come from international sales (Wikinvest, 2013). PepsiCo’s Total
Revenue for the year 2012 was 65 billion dollars which was slightly down from 2011’s Total
Revenue which was 66 billion dollars (LexisNexis Academic, 2013). In 2012, 35% of PepsiCo’s
net revenue came from emerging and developing markets which is up 11% from just six years
ago (PepsiCo, 2012). Some of these emerging and developing markets include many Asian-
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Pacific countries like the Philippines, Vietnam, and Thailand of which PepsiCo is ranked within
the top five of snack and beverage companies (PepsiCo, 2012). PepsiCo is predicting that the
Asian-Pacific market will become one of its largest markets over the next several years despite
the fact that their Asia, Middle East, and Africa division only accounts for about 10% of their net
Revenue for 2012 (PepsiCo, 2012). Because of this, PepsiCo is investing heavily in the Asian-
Pacific market (PepsiCo, 2012).
Because of the fact that Asian-Pacific countries, to include China, South Korea, Japan,
Indonesia, Vietnam, and the Philippines, just to name a few, have such huge potential for growth
there is a great strategic opportunity within this region. As of March of 2012, PepsiCo has
formed an alliance with Tingyi (Cayman Islands) Holding Corp. (PepsiCo, 2012). Tingyi is a
well-known food and beverage company within China and the Asian-Pacific region (PepsiCo,
2012). This deal allowed Tingyi’s beverage subsidiary to become PepsiCo’s franchise bottler in
China (PepsiCo, 2012). In October of 2012, Tingyi and PepsiCo announced the opening of a new
beverage plant in Zhengzhou China, which will provide for western and central China (PepsiCo,
2012). Besides being a beverage company, Tingyi also sells processed food and snacks in China
under the brand name Master Kong (PepsiCo, 2012). With a further alliance, PepsiCo and
Master Kong can form a strategic partnership. This partnership would allow the .
1. PepsiCo Strategic Plan
1 | P a g e
PepsiCo Strategic Plan
By Student Name
AMU/APU BUSN 620
PepsiCo Strategic Plan
2 | P a g e
PepsiCo Strategic Plan
Summary
2. PepsiCo is the largest food and beverage business in the United
State (PepsiCo, 2012).
They own many top leading brand name snack foods and
beverages, of which 22 of them bring
in over one billion dollars in annual sales each (PepsiCo, 2013).
Some of these popular brands
include Pepsi-Cola, Frito-Lay, Tropicana, Quaker, and Gatorade
(PepsiCo, 2013). Along with
being the number one food and beverage business in the United
States, PepsiCo is the second
largest food and beverage company in the world (PepsiCo,
2012). PepsiCo products can be found
in over 200 countries around the world (PepsiCo, 2013). The
sale of snack foods accounts for
more than half of PepsiCo’s total revenue made (Wikinvest,
2013). Of PepsiCo’s total revenue,
about 48% of total sales come from international sales
(Wikinvest, 2013). PepsiCo’s Total
Revenue for the year 2012 was 65 billion dollars which was
slightly down from 2011’s Total
Revenue which was 66 billion dollars (LexisNexis Academic,
2013). In 2012, 35% of PepsiCo’s
net revenue came from emerging and developing markets which
is up 11% from just six years
3. ago (PepsiCo, 2012). Some of these emerging and developing
markets include many Asian-
PepsiCo Strategic Plan
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Pacific countries like the Philippines, Vietnam, and Thailand of
which PepsiCo is ranked within
the top five of snack and beverage companies (PepsiCo, 2012).
PepsiCo is predicting that the
Asian-Pacific market will become one of its largest markets
over the next several years despite
the fact that their Asia, Middle East, and Africa division only
accounts for about 10% of their net
Revenue for 2012 (PepsiCo, 2012). Because of this, PepsiCo is
investing heavily in the Asian-
Pacific market (PepsiCo, 2012).
Because of the fact that Asian-Pacific countries, to include
China, South Korea, Japan,
Indonesia, Vietnam, and the Philippines, just to name a few,
have such huge potential for growth
there is a great strategic opportunity within this region. As of
4. March of 2012, PepsiCo has
formed an alliance with Tingyi (Cayman Islands) Holding Corp.
(PepsiCo, 2012). Tingyi is a
well-known food and beverage company within China and the
Asian-Pacific region (PepsiCo,
2012). This deal allowed Tingyi’s beverage subsidiary to
become PepsiCo’s franchise bottler in
China (PepsiCo, 2012). In October of 2012, Tingyi and PepsiCo
announced the opening of a new
beverage plant in Zhengzhou China, which will provide for
western and central China (PepsiCo,
2012). Besides being a beverage company, Tingyi also sells
processed food and snacks in China
under the brand name Master Kong (PepsiCo, 2012). With a
further alliance, PepsiCo and
Master Kong can form a strategic partnership. This partnership
would allow the Master Kong
subsidiary to become another PepsiCo franchise and
manufacture and sell snack foods under the
PepsiCo name. PepsiCo would benefit from Master Kong’s
manufacturing and distribution
facilities while Master Kong would benefit from PepsiCo’s
product line, brand name, and
resources. This strategic plan will benefit both parties involved
5. and help increase PepsiCo’s
Asian-Pacific market share.
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History
PepsiCo gets its humble beginnings back in the 1890s when
Caleb D. Bradham (Doc
Bradham) created a new kind of cola drink (PepsiCo, 2001).
With the encouragement of some
friends, Doc Bradham was convinced to sell his new cola
concoction commercially (PepsiCo,
2001). It was not until years later that the cola became known as
Pepsi Cola (PepsiCo, 2001).
PepsiCo was not a company yet but Pepsi- Cola was slowly
growing. Following the successful
method of Coca Cola, Doc Bradham started selling the Pepsi
syrup to pharmacies and started
bottling his product for consumers (PepsiCo, 2001). Over the
next several of decades the Pepsi
6. Cola Company grew and shrank with World War One and the
Great Depression until it found its
self in the hands of a businessman named Charles G. Guth, who
owned a candy and fountain
store and recently had a falling out with Coca Cola (PepsiCo,
2001). Mr. Guth took Pepsi from a
small cola company and grew it into an international business
by introducing it to Canada and
Cuba with the financial and labor support of his partner Mr.
Loft (PepsiCo, 2012). Year passed
and Pepsi continued until 1965 when Pepsi joined forces with
the Frito-Lay Company and
became PepsiCo Incorporated (PepsiCo, 2001). Over the next
several years PepsiCo continued to
merge with, or take over other companies. In 1977 they took
over Taco Bell, in 1978 they took
over Pizza Hut, and in 1986 they took over Kentucky Fried
Chicken (KFC) (PepsiCo, 2001). In
1997 the three companies split off from PepsiCo to form their
own company (PepsiCo, 2001).
This practice of taking over, partnering up with, or creating an
alliance with other companies is a
practice PepsiCo still uses today. Such an example can be seen
in PepsiCo’s most recent alliance
7. with a Chinese company, Tingyi Holding Corp. Tingyi is a
leading food and beverage company
in China (PepsiCo, 2012). Tingyi started of selling instant
noodles in China back in 1992 under a
brand name called Master Kong (PepsiCo, 2012). Currently
Master Kong is one of China’s most
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recognizable brand names, and ranked by TNS, a market
research firm, to be Chinas second most
valuable brand (Wexler, 2011). Continuing with what PepsiCo
has done over there many years
they has been around, further deepening their alliance with
Tingyi and their subsidiaries can only
increase PepsiCo’s position within the Asian-Pacific market
place.
Vision
PepsiCo’s vision is to “continually improve all aspects of the
world in which we operate
– environmental, social, economic – creating a better tomorrow
8. than today,” according to
PepsiCo’s vision statement (PepsiCo, 2013, Para. 3).
PepsiCo’s alliance with Tingyi is already improving the world
in which they operate in.
With the construction of a new 24,000 square meter beverage
plant in Zhengzhou China,
PepsiCo and Tingyi have created thousands of jobs in the area
(PepsiCo, 2012). There new
beverage plant was also constructed in accordance with the
criteria set by the Leadership in
Energy and Environmental Design (LEED) (PepsiCo, 2012).
This new environmentally friendly
manufacturing facility falls in with the vision set by the
PepsiCo Company, and will be the gold
standard to reach for when furthering alliances to increase their
market share within the Asian-
Pacific region over the next several years.
Mission Statement
PepsiCo’s mission, according to PepsiCo, “is to be the world’s
premier consumer product
company focused on convenient foods and beverages. We seek
to produce financial rewards to
investors as we provide opportunities for growth and enrichment
9. to our employees, our business
partners, and the community in which we operate. And in
everything we do, we strive for
honesty, fairness, and integrity.” (PepsiCo, 2013, Para. 2)
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PepsiCo’s strategic plan to further increase its snack food
market share within the Asian-
Pacific countries follows the mission set by PepsiCo. It seeks to
increase its market share within
the Asian-Pacific region. It seeks to increase sales and revenue
for its shareholders along with
providing for its employees. Finally, it seeks to create an
environment of fairness and respect
with its partners and the community it touches.
Corporate Values
PepsiCo strives to be a socially and environmentally
responsible company and holds this
philosophy deep within its corporate values (PepsiCo, 2013).
What this means is that PepsiCo is
10. committed to sustained growth, empowering people, and being a
trusted and responsible
company (PepsiCo, 2013).
With the implementation of its strategic plan, PepsiCo hopes to
empower people to be
able to not only choose snack that taste great, but are great for
you by further introducing its vast
line of snack food products to the Asian-Pacific region. With its
alliance of Tingyi’s subsidiary
Master Kong, PepsiCo will further be able to create an
environment of sustained growth with it
introduction of popular snack foods. With socially responsible
business practices, PepsiCo will
be able to become a publicly trusted brand name within the
region with will benefit PepsiCo and
its partner Tingyi.
Business Objectives
The objective of PepsiCo is to increase its market share of its
brands among the global
market. Increase revenue and profitability for its shareholders
through innovative practices and
new markets. Lastly, help create a better world through its
ethical business practices and
11. environmentally impact. These objectives can already be seen
within the company based on its
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actions. With their alliance with Tingyi, PepsiCo is able to
produce its beverages and have them
bottled in Tingyi’s LEED certified bottling plant which will
provide Pepsi Beverages to western
and central China (PepsiCo, 2012). This is, of course, not the
only LEED certified bottling plant
that Tingyi has in the country. Currently Tingyi has four LEED
certified bottling plants within
China (PepsiCo, 2012). This partnership with Tingyi is
advantageous because it helps PepsiCo
maintain its objective and retain brand notoriety.
PepsiCo plans to continue with its present strategy of
partnering up with well-established
companies in the beverage and food industry. Not only does
PepsiCo benefit from the
knowledge and experience already obtained within these
12. established companies, but they get a
great advantage because distribution channels are already
established. By partnering up with
Tingyi’s snack food subsidiary Master Kong, PepsiCo will be
able to open itself up to new
markets that are already well aware of the Master Kong brand
name. PepsiCo will also be able to
take advantage of the distribution chain that Master Kong has
spent over twenty years
establishing all over Asia. Furthermore, PepsiCo will be able to
take advantage of all of Tingyi’s
and Master Kong’s production and distribution facilities so it
can distribute its product all over
the Asian-Pacific Region. This will be how PepsiCo plans on
interweaving its strategic plan with
established and approved practices it already has in place.
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SWOT Analysis
13. Strengths
billion per year
sity
-up or acquire other
brands
Weaknesses
production and distribution
g Revenue
-Pacific market share
Opportunities
14. beverage consumption within Asian-
Pacific countries.
Asian-Pacific countries
snacks
like dried fruits and nuts
Threats
Yuan, Yen, or Pilipino Peso.
Competition from other brands
pallet
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Key Strategies
PepsiCo’s current market share within the Asian-Pacific
countries is abysmal.
Apparently, only about 10% of PepsiCo’s net revenue comes out
of the AMEA region and that
also includes both Africa and the Middle Eastern countries
(PepsiCo, 2012). With the Savory
snack market in the Asian-Pacific region having total revenue of
over 20 billion dollar in 2011,
PepsiCo should be able to claim more revenue from the region
(Savory Snacks Industry Profile:
Asia-Pacific, 2012). Furthermore, processed snacks and potato
chips accounted for 57.2% and
23.5% of the total markets revenue respectively (Savory Snacks
Industry Profile: Asia-Pacific,
2012). With only about 6.5 billion dollars in revenue coming
out of AMEA, which includes both
snack foods and beverages, it is imperative that PepsiCo follows
these key strategies to gain
16. more of the Asian-Pacific market share.
The first key strategy is for PepsiCo to do what it does best
which is form more
partnerships. In the past few years PepsiCo has been able to
form an alliance with a well-known
Chinese food and beverage company called Tingyi. This
alliance franchises out PepsiCo’s
bottling and distribution to a subsidiary beverage company of
Tingyi (PepsiCo, 2012). Tingyi
also has a subsidiary snack food companies that is well known
all over Asia for its noodles and
other snack foods (PepsiCo, 2012). Master Kong, the subsidiary
company, could be quite
beneficial to PepsiCo’s snack food division just like Tingyi is
beneficial to PepsiCo’s beverage
division. PepsiCo should form another alliance with Tingyi’s
snack food subsidiary building off
the back of the previous alliance. Within the first year PepsiCo
should form an alliance with the
Master Kong Corporation. PepsiCo will have to contribute a 5%
indirect equity interest into the
Master Kong Corporation with an option to increase its indirect
holdings to 20% within five
17. years. Master Kong will gain franchise right to PepsiCo’s snack
food brands like Frito Lay and
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Quaker. Master Kong will also be able to work closely with
PepsiCo’s research and development
facility in Shanghai (PepsiCo, 2012).
The second key strategy is for PepsiCo to use its alliance with
Master Kong, along with
its Research and Development Facility and marketing teams, to
better determine what products
the Asian-Pacific market likes along with what culturally
specific changes should be made to
existing products. This research will be invaluable to PepsiCo
because it will provide an in-depth
look into the Asian-Pacific market. PepsiCo can then work with
Master Kong to weed out
product that under performs and create new product that suits
the Asian-Pacific market.
The third key strategy is for PepsiCo to market its product and
brand name through
18. endorsements, advertising, special events, and charitable
contributions. This will not only make
PepsiCo’s brands better known, but is will create notoriety for
the company as a whole. PepsiCo
should mainly focus its advertising to largely populated areas
for maximum exposure.
The final key strategy for PepsiCo, with the Master Kong
Corporation, is to create
manufacturing and distribution hubs. By creating one hub in
Zhengzhou, PepsiCo and Master
Kong could share resources with the Tingyi bottling plant
already there and provide product to
China. By creating a second hub in Guangzhou, they could
produce and distribute product all
across Asia due to the fact that Guangzhou is a Southern
Chinese port city.
Major Goals
Being the world’s second largest food and beverage company is
a mighty goal to achieve
for any company, let alone PepsiCo (PepsiCo, 2012). Over
PepsiCo’s many years they have
strived to be the best food and beverage company in the world.
With such a large market, like
19. that in Asia, PepsiCo has to find a way to insert itself and
succeed or else it risks losing what it
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worked so hard to achieve. PepsiCo’s strategic goal should be to
create an alliance with Tingyi’s
subsidiary, Master Kong Corporation. Its goal should be to work
out a partnership that builds
further upon the wonderful relationship PepsiCo has been able
to build with Tingyi. This
partnership will not only benefit PepsiCo through granting it
access to a company with well-
established manufacturers and distributors, but will also benefit
Master Kong by franchising out
the production of some of PepsiCo’s billion dollar brands.
A second major goal for PepsiCo is to hone its product line for
the Asian market. One
thing businesses must learn when they are working on a global
level is that not all products
translate to other cultures. What may work in one country may
not work in another. By studying
20. the Asian-Pacific market PepsiCo can create products that the
customer really likes. Maybe Cool
Ranch Doritos do not do so well in South Korea, but a new
seafood flavor is a hit. By
continuously examining their product they will be able to better
produce what the customer
wants and increase market share.
The third major goal for PepsiCo is to win over the hearts and
minds of the Asian-Pacific
population thus improving brand recognition and corporate
notoriety. Although advertising is an
effective way of getting a brand’s name out there, it is through
events and charitable
contributions that will make a long lasting impression upon the
public. If enough of the public
has a positive opinion of a company, whether customer or not,
the company benefits, and that is
the goal PepsiCo hopes to achieve within Asia.
The final major goal for PepsiCo is to centralize its production
and distribution into two
major locations. Do to the fact that snack foods have a longer
shelf life than fresh food, the
ability to ship them longer distances provide less of a problem.
21. By having one production facility
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in Zhengzhou, PepsiCo and Master Kong can better utilize
resources that already exist with
Tingyi’s Pepsi bottling plant. By having a second production
facility in Guangzhou, PepsiCo and
Master Kong can take advantage of the sea port that exist for
the transport of product throughout
Asia along with its general location to large populations and
Southern Asia.
Strategic Action Programs/Strategic Actions
For the strategic plan to be enacted the first thing that must be
done is to form a mutually
beneficial partnership, or alliance, with Tingyi’s snack food
subsidiary Master Kong. Because
this new partnership bears a lot of similarity to the deal
previously reached with one of Tingyi’s
other subsidiary, it is reasonably safe to assume that the new
partnership will share a similar cost
22. do to the fact that the both partnership are with companies of a
similar scope. The cost of
PepsiCo’s 5% indirect equity interest in Master Kong is
expected to be roughly 180 million
dollars after taxes, or roughly about 0.11 cents per share. For
this alliance to go through Tingyi’s
shareholders must first approve of the deal by voting on it.
Once that has passed, PepsiCo’s
partnership must get regulatory approval from the Chinese
government (PepsiCo, 2012). This is
standard with any foreign corporation seeking to form a
partnership with a Chinese company.
The time frame for this part of the whole strategic plan to be
enacted is one year.
After an alliance has be agreed upon, shareholders have
approved, regulators have given
their blessing, and Master Kong has started producing and
distributing PepsiCo’s product, a
greater amount of research will be put into PepsiCo’s Asian
products. This research will be used
to help determine how to cater PepsiCo’s products to the Asian-
Pacific consumer market.
PepsiCo’s marketing and product research for the region will
see an increase of 10% for the first
23. year there products are being produce and distributed by Master
Kong, and 2% for the next four
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years after that. This should provide adequate resources for the
marketing and development team
to quickly gain a better understanding of the Asian-Pacific
snack food market.
For the strategic plan of increasing the Asian-Pacific market
share to succeed, PepsiCo
must make their name known to their customer. PepsiCo’s name
recognition is not as great as
some of its largest competitors like Coca-Cola (Wikinvest,
2013). PepsiCo did have great
success with its “Bring Happiness Home” campaign video that
celebrated the Chinese New Year
(PepsiCo, 2012). It was estimated that over 700 million people
viewed this video of a family
reuniting for the holiday (PepsiCo, 2012). Advertising like this
will go far in greatly increasing
brand recognition. Another way to endear PepsiCo into the
24. hearts and minds of its customer is
through charitable contributions and actions. PepsiCo should
sustain the same level and quality
of advertising it has had with it successful “Bring Happiness
Home” campaign over the next five
years. Along with quality advertising, PepsiCo will set up a 25
million dollar charitable fund to
be used throughout the region over the next five years. This will
help promote a positive image
of the PepsiCo brand throughout Asia.
For greater distribution of products throughout the Asian-
Pacific region, PepsiCo, along
with its partner Master Kong, should construct two LEED
certified production hubs. One hub
should be in Zhengzhou and the other in Guangzhou. The
Zhengzhou plant will be able to work
with Tingyi’s bottling plant to share resources like warehouses
and distribution route because
PepsiCo’s beverages and snack foods complement each other
and usually end up going to the
same locations. The other production and distribution hub will
be located in Guangzhou because
it is a large manufacturing city with a sea port, which is located
in Southern China, and would be
25. perfect for the distribution of product throughout the Asian-
Pacific region. Guangzhou is in
relatively close proximity to Taiwan, Macau, Indonesia,
Vietnam, Japan, Philippines, and
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Thailand, just to name a few countries, and would be perfect for
distributing product to these
locations. On average these production facilities will cost about
350 million dollars each to
construct with a grand total of 700 million dollars combined
(Wikinvest, 2013). This money can
come out of the 3.5 billion dollar fund PepsiCo has set aside to
construct 10 new manufacturing
facilities and then leased to Master Kong, or they can be built
through the partnership of the two
companies (Wikinvest, 2013). These two facilities should take
no longer than two years to
construct. Through these strategic actions, PepsiCo’s strategic
plan will be enacted.
26. Implementation
The implementation of the strategic alliance between PepsiCo
and Master Kong will take
place once both parties involved are able to come to an
arrangement, shareholders approve of the
deal, and government regulators sign off on the partnership.
PepsiCo’s representatives will meet
with representatives of both Tingyi, and their subsidiary
company Master Kong, to broker a
strategic alliance that is beneficial to both parties involved. At
this time PepsiCo and Master
Kong will discuss which brands in PepsiCo’s vast line of snack
food products it would like to
start of producing and distributing. Funding for the indirect
equity interest in the company will
come from the revenue made for the current year. This will
allow PepsiCo to move forward in its
strategic plan to gain a greater market share of the Asian-
Pacific region.
Tingyi and its subsidiaries have over 70 production facilities
all across China which
could be used for the initial phase in production of PepsiCo’s
products. With the ultimate goal of
having two main production and distribution hubs, PepsiCo will
27. have to cooperate with Master
Kong, and Tingyi, in the construction of these new facilities. It
would be beneficial to both
parties to have modern, centrally located production and
distribution facilities. To implement this
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plan, land must be acquired, plans must be drawn up, and
contractors/construction companies
must be bid out. This whole process of planning and
constructing manufacturing and distribution
hubs should take about two years to complete, and cost roughly
700 million dollars.
For PepsiCo to create better brand recognition throughout the
Asian-Pacific region they
will keep up there successful advertising campaign and set up a
25 million dollar charitable fund
to be used over the next five years. For the maximum amount of
brand exposure do to charitable
contributions PepsiCo should focus its contributions to well-
populated areas throughout Asia.
28. Almost 90% of all snack foods sold throughout the Asian-
Pacific market come from
supermarkets/hypermarkets, independent retailers, and
convenience stores (Savory Snacks
Industry Profile: Asia-Pacific, 2012). These channels of
distribution usually lie within largely
populated areas or middle class areas. PepsiCo should focus its
contributions to these areas by
helping local communities. Schools, hospitals, and parks are
highly visible areas that could
create greater brand recognition. This will be where a majority
of the 25 million dollars will be
spent.
PepsiCo will also implement strong market research into their
product lines sold in the
Asian-Pacific region. PepsiCo already knows that processed
snacks, potato chips, and nuts and
seeds make up about 98% of the snack food market (Savory
Snacks Industry Profile: Asia-
Pacific, 2012). This does not, however, mean that snack foods
that do well in the United States
will do well in the Asian-Pacific region. Different cultures have
different taste. Through the
29. implementation of product research, PepsiCo will be able to
give the market more snack foods
that they like and further increase PepsiCo’s total market share
within the region. This will take
place after the initial partnership is created and help create and
maintain successful products.
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Measurement and Controls/Milestones
There are several milestones set up to measure the success of
PepsiCo’s strategic plan to
increase its market share with in the Asian-Pacific region. The
first milestone has to do with the
completion of the partnership with Tingyi’s subsidiary, Master
Kong. It is believed that a 5%
indirect equity interest in the company will be needed which
will come out to roughly 180
million dollars, with the potential option of increasing it
indirect equity to 20% in five years.
Because this is such a large investment into a foreign company,
PepsiCo’s auditors and corporate
30. lawyers will need to examine Master Kong to make sure it is a
sound company to form an
alliance with and to ease shareholders concerns.
The next milestone set for PepsiCo is to see an increase in
market share within the Asian-
Pacific Region. With access to Master Kong’s production and
distribution lines, PepsiCo should
see a growth in sales of its products within the Asian market. It
is reasonably safe to assume that
PepsiCo’s market share will increase by at least 1% in the first
year to a total of 11% of the total
market share. Over the next five years PepsiCo’s goal for total
market share should be 18%, or a
rise of 8% over five years. This growth in market share will be
attributed to its partnership, its
advertising campaign, charitable contributions, and its research
into making a more desirable
product.
PepsiCo’s final measurement and control come from its
decision to construct two
production and distribution hubs. These two LEED certified
building will be the central points in
which Master Kong produces and distributes PepsiCo’s products
31. throughout Asia. The cost of
these two facilities is estimated around 350 million dollars each
which is slated to come from the
3.5 billion dollar manufacturing construction fund PepsiCo has
set up for the region. If the cost
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of these facilities is greater than 400 million dollars, and/or
Master Kong had great reluctance to
use these facilities in lieu of their own facilities then great
consideration must be given to
abandoning the construction of these central hubs. With these
measures and controls in place,
PepsiCo will be able to track it progress and make adjustments
to better achieve its strategic plan
of increasing its market share within the Asian-Pacific region.
PepsiCo Strategic Plan
32. 18 | P a g e
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