An overview of managerial operations of PEPSI-CO

7/30/2019 An overview of managerial operations of PEPSI-CO

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Assignment

On 2012

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An overview of managerial

operations of Pepsico

University of dhaka


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Letter of Transmittal

December12

Santus Kumar Deb

Assistant Professor

Department of Tourism & Hospitality Management

University of Dhaka

Subject: Submission of assignment on an overview of managerial operations of Pepsi.

Dear Sir,

It is a great pleasure for us to submit an assignment on an overview of managerial operations of Pepsi under

the course named Management Fundamentals. In this assignment, we took attention on the management

process and mission, vision and objectives of Pepsi. This type of assignment completion was not possible

without your guidance and continuous cooperation. We are specially giving thanks to you in this regard. We

hope that through this assignment we have been able to demonstrate the knowledge learned from your course.

Thank you for allowing us to do the assignment on the above mentioned topic. We sincerely hope that this

paper may meet your expectations.

Sincerely yours,

S. M. Siraj Uddin Chowdhury 71209033

Md. Marufur Rahman Sikder 71208035

Sushanta Chakraborty 71208033

Shegufta Nasrin Akter 71208001

Md. Rafiqul Amin 071107001

Md. Shahidul Islam 071107063

Sumaiya Binte Delwar 71208031


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Acknowledgement

We would like to express our special gratitude to our honorable course teacher Mr. Santus Kumar Deb for

providing us much needed suggestions to prepare this assignment. His inspiration, kind direction helped in

building courage and confidence to face the practical situations.

His instruction and encouraging attitude and artistic technique of giving knowledge helped us in an outstanding

way to worded out this task.

We are also grateful to the authors of those books, web resources from where we have received necessary help

in preparing this assignment.

We have prepared the assignment based on knowledge, ideas and understanding of our assigned task. We tried

to make it precise and concise as well as informative. Even then, if there remains any shortcoming that is our

own.

At last, we would convey out thanks to all of our well-wishers for their voluntary help and cooperation.


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Introduction & History

Pepsi (stylized in lowercase as pepsi, formerly stylized in uppercase as PEPSI) is a carbonated soft drink

that is produced and manufactured by PepsiCo. Created and developed in 1893 and introduced as Brad's

Drink, it was renamed as Pepsi-Cola on August 28, 1898, then to Pepsi in 1961.

Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina, United States, in 1893 byCaleb Bradham, who made it at his drugstore where the drink was sold. It was later labeled Pepsi Cola,named after the digestive enzyme pepsin and kola nuts used in the recipe.

Bradham sought to create a

fountain drink that was delicious and would aid in digestion and boost energy.

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse. That year,Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and salesincreased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity toendorse Pepsi-Cola, describing it as "A bully drink...refreshing, invigorating, a fine bracer before arace." The advertising theme "Delicious and Healthful" was then used over the next two decades.

In

1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo waschanged again.

In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy in largepart due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result ofWorld War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel wasunsuccessful, and soon Pepsi's assets were purchased by Charles Guth, the President of Loft Inc. Loftwas a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give him a discount on syrup. Guth then had Loft'schemists reformulate the Pepsi-Cola syrup formula.

On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered theopportunity to purchase the Pepsi-Cola company, and it declined on each occasion.

Caleb Bradham & Pepsi-Cola

Caleb Davis Bradham was born in Chinquapin, North Carolina on May27, 1867. He graduated from the University of North Carolina at ChapelHill and attended the University of Maryland School of Medicine, circa1890. He dropped out of medical school because his fathers businesswas going bankrupt. After returning to North Carolina, Bradham taughtpublic school for about a year, and later opened a drug store on thecorner of Middle and Pollock Streets in downtown New Bern. He namedthe store Bradham Drug Company and, like many other drug stores ofthe time, housed a soda fountain. In 1893, Bradham invented BradsDrink, a blend of carbonated water, sugar, pepsin, kola nut extract,


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vanilla and rare oils at this location. On August 28, 1898, Caleb renamed his drink Pepsi -Cola, aftera combination of two ingredients, pepsin and cola. He believed his drink was healthy as it aided indigestion much like the pepsin enzyme does. In 1898, Caleb Bradham wisely bought the trade name"Pep Cola" for $100 from a competitor in Newark, New Jersey that had gone broke. His assistant JamesHenry King, a young African American was the first to taste the new drink.

In 1902, Bradham launched the Pepsi-Cola Company in the back room of his pharmacy and onDecember 24, 1902 the Pepsi-Cola Company was incorporated in the state of North Carolina. Thebusiness began to grow, and on June 16, 1903, "Pepsi-Cola" was officially registered with the U.S.Patent Office. At first, he mixed the syrup himself and sold it exclusively through soda fountains. Thatfirst year, Bradham sold 7,968 gallons of syrup, using the theme line "Exhilarating, Invigorating, AidsDigestion." He also expanded his operation by opening a second Drug Store at the corner of Middle andBroad Streets. Caleb soon recognized that a greater opportunity existed to bottle Pepsi so that peoplecould drink it anywhere. In 1905, Bradham began selling Pepsi-Cola in six-ounce bottles and awardedtwo franchises to Charlotte and Durham, North Carolina. The following year, 15 franchises wereawarded, with another 40 by 1907. In 1910 there were 250 franchises in 24 states and in January of that

year the Pepsi Cola Company held their first Bottler Convention in New Bern.Caleb Bradham enjoyed 17 years of success with Pepsi-Cola. However, he had gambled on thefluctuations of sugar prices during WWI. He believed that sugar prices would continue to rise, but theyfell drastically, leaving him with an overpriced sugar inventory. Pepsi Cola went bankrupt in 1923 andits assets were sold to Craven Holding Corporation for $30,000.

Timeline of Bradham

1898 - One of Caleb's formulations, known as "Brad's Drink," a combination of carbonated water, sugar,vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898. Pepsi-Cola receives its firstlogo.

1902 - The instant popularity of this new drink leads Bradham to devote all of his energy to developingPepsi-Cola into a full-fledged business. He applies for a trademark with the U.S. Patent Office,Washington D.C., and forms the first Pepsi-Cola Company.

The first Pepsi-Cola newspaper advertisements appeared in the New Bern Weekly Journal.

1903 - "Doc" Bradham moves the bottling of Pepsi-Cola from his drugstore into a rented warehouse; hesells 7,968 gallons of syrup in the first year of operation.

Pepsi's theme line is "Exhilarating, Invigorating, Aids Digestion."

1904 - Bradham purchases a building in New Bern known as the "Bishop Factory" for $5,000 andmoves all bottling and syrup operations to this location. Pepsi is sold in six-ounce bottles. Sales increaseto 19,848 gallons.

1905 - Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North Carolina.


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Pepsi receives its new logo, its first change since 1898.

1906 - Pepsi gets another logo change, the third in eight years. The modified script logo is created withthe slogan, "The Original Pure Food Drink."

There are 15 U.S. Pepsi bottling plants. The Pepsi trademark is registered in Canada. Syrup sales rise to38,605 gallons.

The federal government passes the Pure Food and Drug Act, banning substances such as arsenic, lead,barium, and uranium, from food and beverages. This forced many soft drink manufacturers, includingCoca-Cola, to change their formulas. Pepsi-Cola, being free of any such impurities, claimed they alreadymet federal requirements.

1907 - Pepsi-Cola Company continues to expand; the company's bottling network grows to 40franchises. Pepsi-Cola sells more than 100,000 gallons of syrup.

Pepsi trademark is registered in Mexico. Syrup sales rise to 104,026 gallons.

1908 - Pepsi-Cola becomes one of the first companies to modernize delivery from horse drawn carts tomotor vehicles. Two hundred fifty bottlers in 24 states are under contract to make and sell Pepsi-Cola.

1909 - Automobile race pioneer Barney Oldfield endorses Pepsi-Cola in newspaper ads as "A bullydrink...refreshing, invigorating, a fine bracer before a race."

1910 - The first Pepsi-Cola bottlers' convention is held in New Bern, North Carolina.

1920 - Pepsi theme line speaks to the consumer with "Drink Pepsi-Cola, it will satisfy you."

After seventeen years of success, Caleb Bradham lost Pepsi Cola. He had gambled on the fluctuations ofsugar prices during W.W.I, believing that sugar prices would continue to rise but they fell insteadleaving Caleb Bradham with an overpriced sugar inventory. Pepsi Cola went bankrupt in 1923 and itsassets were sold to a North Carolina concern; Craven Holding Corporation for $30,000.

Roy C. Megargel, a Wall Street broker, buys the Pepsi trademark, business and good will from CravenHolding Corporation for $35,000, forming the Pepsi-Cola Corporation.

Our Mission

Our mission is to be the world's premier consumer products company focused on convenient foods andbeverages. We seek to produce financial rewards to investors as we provide opportunities for growth andenrichment to our employees, our business partners and the communities in which we operate. And ineverything we do, we strive for honesty, fairness and integrity.


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Our Vision

"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 tobenefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainablecompany.

Performance with Purpose

At PepsiCo, we're committed to achieving business and financial success while leaving a positiveimprint on society - delivering what we call Performance with Purpose.

Our approach to superior financial performance is straightforward - drive shareholder value. Byaddressing social and environmental issues, we also deliver on our purpose agenda, which consists ofhuman, environmental, and talent sustainability.

Pepsi-Cola Values

Our Values & Philosophy are a reflection of the socially and environmentally responsible company weaspire to be. They are the foundation for every business decision we make.

Our Commitment

We are committed to delivering sustained growth through empowered people acting responsibly andbuilding trust.

What It Means

Sustained Growth is fundamental to motivating and measuring our success. Our quest for sustainedgrowth stimulates innovation, places a value on results, and helps us understand whether today's actions


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will contribute to our future. It is about the growth of people and company performance. It prioritizesboth making a difference and getting things done.

Empowered People means we have the freedom to act and think in ways that we feel will get the jobdone, while adhering to processes that ensure proper governance and being mindful of company needsbeyond our own.

Responsibility and Trust form the foundation for healthy growth. We hold ourselves both personallyand corporately accountable for everything we do. We must earn the confidence others place in us asindividuals and as a company. By acting as good stewards of the resources entrusted to us, we strengthenthat trust by walking the talk and following through on our commitment to succeeding together.

Guiding Principles

We uphold our commitment with six guiding principles. We must always strive to:

Care for our customers, our consumers and the world we live in. Sell only products we can be proud of. Speak with truth and candor. Balance short term and long term. Win with diversity and inclusion.

Respect others and succeed together.

Objectives of Pepsi-Cola

Performance

The performance of PEPSI Company, including the financial results achieved, is the foundation for the

entire do. The objective agenda has four components Performance, Human, Environmental andTalent Sustainability but it starts with and is made possible by a consistently strong performance

across the business units, the brands, and in the markets in which it operates.


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Human Sustainability

As part of Performance with Purpose, we have committed to providing more food and beverage choices

made with wholesome ingredients that contribute to healthier eating and drinking. This means increasingthe amount of whole grains, fruit, vegetables, nuts, seeds and low-fat dairy in our global product

portfolio. It also means reducing the average amount of sodium per serving in key global food brands, in

key countries, by 25 percent by 2015 (with a 2006 baseline); reducing the average amount of saturated

fat per serving in key global food brands, in key countries, by 15 percent by 2020 (with a 2006 baseline);

reducing the average amount of added sugar per serving in key global beverage brands, in key countries,

by 25 percent by 2020 (with a 2006 baseline).

Environmental Sustainability

PepsiCo is fully committed to protecting the earth's natural resources through innovation and theefficient use of land, energy, water and packaging in all our operations.

As a dynamic global business, we rely on the earth's natural resources every day. And as we grow ourbusinesses in developed countries and expand in developing and emerging countries, we strive to useonly methods and tools that are scientifically proven, socially responsible and economically sound.

Talent Sustainability

As PepsiCo continues its journey of sustainable growth, our ability to innovate and grow depends on the

talent in our ranks, which is why we are investing in our associates to develop their talent and leadership

skills to achieve success, while creating employment opportunities in the communities we serve.

Marketing Strategy of Pepsico

PepsiCo's performance and purpose are not separatethey each are linked inextricably with the other.

The brand/product portfolio is balanced and offers consumers choices, from "treats to healthyeats"

The future: innovation across all categories with a focus on maintaining/growing core businesses,while delivering a robust pipeline of new products outside the core


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PepsiCos marketing strategy for the purpose of growth position:

Build and extend our macro-snacks portfolio Sustainably and profitably grow our beverage business worldwide Unleash the power of the Power of One Expand the nutrition businesses Cherish our PepsiCo associates Ensure excellent financial performance

PepsiCos marketing strategy for financial performance

Geographic flexibility: PEPSI is such a product which is found at everywhere of the world, thatmeans there is no barrier to the entry of Pepsi product.

Portfolio flexibility: The ingredients of Pepsi will be integrated according to the culture of thecountries.

Go-to-Market flexibility: Pepsi should be available in the market so that the customers caneasily get that product.

Importance to retail customers: The retailers have to convince the retail customers to purchaseit as a healthy drink.

Responsible marketing & advertising: PepsiCo is committed to responsible advertising practicesand ensuring healthy choices.

Management strength: The implementation of the above strategies is not possible without thesupervision of management team.

PespsiCo Marketing Mix

In 1965 Herman W. Lay of the Frito-Lay Company and Donald Kendall of Pepsi-Cola formed PepsiCo.In 1986 operations were combined under PepsiCo Worldwide Foods and PepsiCo WorldwideBeverages. In 2001 PepsiCo merged with Quaker Oats to form a $25 billion company. PepsiCorestructured in 2007 dividing the company into three units food in the US, Drinks concentrated in theUS and Food and Drinks marketed abroad.

In November 2007, PepsiCo announced a restructuring initiative to split the company into three units,one for food in the US, one for beverages in the US and one for food and drinks abroad.


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Product

Beverage Products - Diet Pepsi, Gatorade, Mountain Dew, Thirst Quencher, Tropicana, AquafinaBottled Water, Sierra Mist.

Savory Food Snacks - Fritos Corn chips, Cheetos, Ruffles Potato Chips, Lays Potato Chips,Tostitos, Doritos.

Other Food Products - breakfast cereals, cakes and cake mixes.

PepsiCo recently created Baked Snacks North America Business Unit to meet consumersinterest in more nutritious snacks and foods.

Price

Expenses related to transportation, ingredients and labor continue to pressure the beverage

industry toward price increases.

PepsiCos drink pricing strategies may be heavily influenced by its working relationship withWal-Mart whose low price themes put pressure on PepsiCo to hold down prices.

The company strives to cut or maintain current prices by cutting overhead and re-engineering themanufacturing process.

PepsiCo is expanding its use of inexpensive and recyclable plastic bottles; nevertheless thecompany has instituted some price increases in recent years, specifically in its overseas markets such asNew Delhi and Duba.

Place

PepsiCo is primarily a US based company with approximately 52% of its revenues located in thestates.

PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 millioninvestment in India. Both initiatives are part of its expansion into international markets and a lesseningof its dependence on US sales.

In addition the company plans on major capital initiatives in Brazil and Mexico.

The company is also acquiring Russias leading Juice Company, Lebedyansky, and V Waterlocated in the United Kingdom.


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Promotion

PepsiCo instituted a so called Pepsi Stuff promotion whereby customers could accumulate PepsiPoints from buying various products these points could be used to by other products, most recentlyAmazonMP3.

A recent promotion involving the NY Yankees was not well received when not enough freetickets were made available.

In 2008 PepsiCo employed Tiger Woods to promote a Gatorade brand called Gatorade Tiger.

PepsiCo continues is promotional association with the NFL and the Super Bowl specificallymarketing Pepsi and Doritos.

In 2009 Pepsi launched its Pepsi Throwback campaigned offering a drink with the sugarcontent of its original product.

People

Indra K. Nooyi is the President of PepsiCo in addition to the companys CFO

Recently the Board of Directors elected Steven S Reinemund chairman of the board and chiefexecutive officer.

PepsiCo fosters a corporate culture that values employees and emphasized diversity in theworkplace.

PepsiCo is named to the 'Best Companies for Multi Cultural Women' list by Working Mothermagazine

PepsiCo is recognized at two events for its dedication to Talent Sustainability and dedication toAsian American employees2009 Best Companies for Asian Pacific Americans from AsianEntrepreneur, Top 10 Companies for Asian Americans from AMBA

PepsiCo has won the 'Workplace Excellence' Award at Out & Equal Workplace NationalSummit

PepsiCo is listed in the top 20 'Ideal Employer MBA Ranking' in Fortune magazine


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Pysicial Evidence

PepsiCos website provides a wealth of information about the company including the firms richhistory and manufacturing process.

PepsiCo is an industry leader in packaging - helping to promote and implement standards forsustainable packaging.

PepsiCo has a packaging philosophy: reduce, reuse, recycle, remove and renew.

Process

PepsiCo is in the process of removing high fructose corn syrup (HFCS) from both the traditional.

The Frito-Lay department will soon produce Lay's Kettle with natural flavors, and to boost thewhole grain and fiber content, respectively, of its Tostitos and Sun Chips brands.

Flavor concentrates are shipped from special Pepsi-Cola manufacturing plants, The bottles andcans that will eventually be filled with Pepsi are manufactured elsewhere, and shipped to Pepsi plantswrapped and sealed for protection, Labels, cartons, caps, the carbon dioxide used to carbonate softdrinks and other supplies are also produced for Pepsi by other companies, Once on the belt, cans are partof an enclosed, controlled environment that keeps them sanitary and helps ensure quality throughout thefilling process, Pepsi-Cola takes special care to purify the water it uses a procedure that involvescareful treatment, filtration and purification, Pepsi-Cola flavor concentrate is carefully combined withsweeteners and other ingredients in large stainless steel mixing tanks. Quality control audits performedby specially trained technicians are a critical part of the manufacturing sequence, In the last step of themanufacturing process, as the now-rinsed cans reach the filler, they're reinverted, immediately filled and

the lid is appliedat an average speed of 1,200 cans per minute.

SWOT Analysis PepsiCo

SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmentalOpportunities and Threats facing that firm. SWOT analysis is a widely used technique through whichmanagers create a quick overview of a companys strategic situation. The technique is based on theassumption that an effective strategy derives from a sound fit between a firms internal resources(strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a

firms strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, thissimple assumption has powerful implications for the design of a successful strategy.


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Strengths, Weaknesses, Opportunities and Threats (SWOT)

Strengths

Branding - One of PepsiCos top brands is of course Pepsi, one of the most recognized brands ofthe world, ranked according to Interbrand. As of 2008 it ranked 26th amongst top 100 global brands.Pepsi generates more than $15,000 million of annual sales. Pepsi is joined in broad recognition by suchPepsiCo brands as Diet Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lays Potato Chips, LiptonTeas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos Tortilla Chips, DoritosTortilla Chips, Aquafina Bottled Water, Cheetos Cheese Flavored Snacks, Quaker Foods and Snacks,Ruffles Potato Chips, Mirinda, Tostitos Tortilla Chips, and Sierra Mist.

The strength of these brands is evident in PepsiCos presence in over 200 countries. Thecompany has the largest market share in the US beverage at 39%, and snack food market at 25%. Such

brand dominance insures loyalty and repetitive sales which contributes to over $15 million in annualsales for the company

Diversification - PepsiCos diversification is obvious in that the fact that each of its top 18brands generates annual sales of over $1,000 million. PepsiCos arsenal also includes ready-to-drinkteas, juice drinks, bottled water, as well as breakfast cereals, cakes and cake mixes.This broad productbase plus a multi-channel distribution system serve to help insulate PepsiCo from shifting businessclimates.

Distribution - The company delivers its products directly from manufacturing plants andwarehouses to customer warehouses and retail stores. This is part of a three pronged approach which

also includes employees making direct store deliveries of snacks and beverages and the use of thirdparty distribution services.

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Weaknesses

Overdependence on Wal-Mart - Sales to Wal-Mart represent approximately 12% of PepsiCostotal net revenue. Wal-Mart is PepsiCos largest customer. As a result PepsiCos fortunes are influencedby the business strategy of Wal-Mart specifically its emphasis on private-label sales which produce a


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higher profit margin than national brands. Wal-Marts low price themes put pressure on PepsiCo to holddown prices.

Overdependence on US Markets - Despite its international presence, 52% of its revenuesoriginate in the US. This concentration does leave PepsiCo somewhat vulnerable to the impact of

changing economic conditions, and labor strikes. Large US customers could exploit PepsiCos lack ofbargaining power and negatively impact its revenues.

Low Productivity - In 2008 PepsiCo had approximately 198,000 employees. Its revenue peremployee was $219,439, which was lower that its competitors. This may indicate comparatively lowproductivity on the part of PepsiCo employees.

Image Damage Due to Product Recall - Recently (2008) salmonella contamination forcedPepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This followed incidents ofexploding Diet Pepsi cans in 2007. Such occurrences damage company image and reduce consumerconfidence in PepsiCo products.

Opportunities

Broadening of Product Base - PepsiCo is seeking to address one of its potential weaknesses;dependency on US markets by acquiring Russias leading Juice Company, Lebedyansky, and V Wwaterin the United Kingdom. It continues to broaden its product base by introducing TrueNorth Nut Snacksand increasing its Lipton Tea venture with Unilever. These recent initiatives will enable PepsiCo toadjust to the changing lifestyles of its consumers.

International Expansion - PepsiCo is in the midst of making a $1, 000 million investment inChina, and a $500 million investment in India. Both initiatives are part of its expansion into international

markets and a lessening of its dependence on US sales. In addition the company plans on major capitalinitiatives in Brazil and Mexico.

Growing Savory Snack and Bottled Water market in US - PepsiCo is positioned well tocapitalize on the growing bottle water market which is projected to be worth over $24 million by 2012.Products such as Aquafina, and Propel are well established products and in a position to ride the upwardcrest.PepsiCo products such as, Doritos tortilla chips, Cheetos cheese flavored snacks, Tostitos tortillachips, Fritos corn chips, Ruffles potato chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitasare also benefiting from a growing savory snack market which is projected to grow as much as 27% by2013, representing an increase of $28 million.

Threats

Decline in Carbonated Drink Sales - Soft drink sales are projected to decline by as much as 2.7%by 2012, down $ 63,459 million in value. PepsiCo is in the process of diversification, but is likely to feelthe impact of the projected decline.


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Potential Negative Impact of Government Regulations - It is anticipated that governmentinitiatives related to environmental, health and safety may have the potential to negatively impactPepsiCo. For example, manufacturing, marketing, and distribution of food products may be altered as aresult of state, federal or local dictates. Preliminary studies on acrylamide seem to suggest that it maycause cancer in laboratory animals when consumed in significant amounts. If the company has to

comply with a related regulation and add warning labels or place warnings in certain locations where itsproducts are sold, a negative impact may result for PepsiCo.

Intense Competition - The Coca-Cola Company is PepsiCos primary competitors. But othersinclude Nestl, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising,sales promotion initiatives undertaken by PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.

Potential Disruption Due to Labor Unrest - Based upon recent history, PepsiCo may bevulnerable to strikes and other labor disputes. In 2008 a strike in India shut down production for nearlyan entire month. This disrupted both manufacturing and distribution.

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43billion and over 198,000 employees. Take a journey through our past and see the key milestones thatdefine PepsiCo.

Brand Portfolio

Our products can be found in nearly 200 countries around the globe. PepsiCo is a global food andbeverage leader with a diverse product portfolio that includes 22 brands that each generate more than $1billion each in annual retail sales. Take a closer look at the brands and products that make up the

PepsiCo portfolio.


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Management Functions of Pepsi

Planning

GOAL: to beat competitors and to improve quality Centralized decisions Traditional goal setting technique Formal Planning Handle unusual situations by conducting special meetings with employees

Organizing

Organizing is defined as:

Determining what needs to be done How it will be done Who is to do it

Leading

Leading involves:

Motivating Working with and through other people to accomplish organizational goals High level of motivation Bonus and salary packages 5Kg sugar on Eidain Profit Allowance Travelling allowance and daily allowance.

Controlling

Controlling is defined as:

Monitoring


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Comparing Correcting work performance

Current International Scenario of Pepsi

Headquarters: Purchase, N.Y., USA

2011 revenues: $66 billion

International slogan: "Change the game"

(2011present for India, Bangladesh & Pakistan for the 2011 Cricket World Cup)

In 2008, PepsiCo (PEP, Fortune 500) launched its "One Simple Thing" program, which gives staffers

the option to add a personal goal -- like exercising more often or eating healthier foods -- to theirperformance review process. Employees are asked to deliver against this goal, just as they would with

any work-related goal.

Agreements with Food Giants
http://money.cnn.com/quote/quote.html?symb=PEP&source=story_quote_linkhttp://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/321.htmlhttp://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/321.htmlhttp://money.cnn.com/quote/quote.html?symb=PEP&source=story_quote_link


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PepsiCo has an exclusive agreement with the fast food giants Taco Bell, KFC and Pizza Hut to only sell

Pepsi products. PepsiCo is exploiting its unique relationship with these restaurants to gain more

recognition and popularity for its various products. Another important aspect of surviving in the food

and beverage industry is the requirement to adequately advertise products. By doing this, companies

attract the attention of their prospective consumers and maximize brand awareness. The more the

consumers visually see the product, the more likely they are to buy and use that specific product. Brand

loyalty is vital to surviving in this industry. The companies' goal is to ultimately reach the point where

their customers are consistently and faithfully using their products.

Encouraging the YouthPepsi brand concept is "infinite longing" encouraging young people to positive attitude towards life, theimplication is for young people, opportunities and ideal space has infinitely many, they can enjoy toreverie and pursuit. To promote this concept, Pepsi brand choices based on football and music andculture as a carrier, in advertising and public welfare activities, with Jackson, "Britney" Spears, AaronKwok, Faye Wong, Kelly Chen, Sammi Cheng, Jay Chou Beckham, Rivaldo, Roberto Carlos, FanZhiyi, Li Weifeng, Qi Hong and so a large number of stars as brand ambassador, advocated stronglyadvocate the spirit of enterprise culture, so that Pepsi's "new generation of choices" and praised "happyfreedom" Style widely, especially young people's understanding and acceptance.

Ranbir Kapoor, Pepsis brand ambassador (currently in India), said, The Game by Pepsi is a rockingconcept and we were confident from the beginning that it would connect instantly with theYoungistaanis. I am delighted with the response and am already looking forward to whats next for meand the rest of the Youngistaan from Pepsi.


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Pepsi brings cricket & football together in new campaign

After "changing the game" recently with its first football campaign in the country featuring actor Ranbir

kapoor, cola giant Pepsi is back in Pepsi's new campaign features not just its usual cricket faces

Mahendra Singh Dhoni, Virat Kohli, Suresh Raina and Harbhajan Singh; but also global football stars

Didier Drogba, Frank Lampard and Fernando Torres, all of whom represent Barclays Premier Leagueside Chelsea.

In the campaign, the Indian cricketers challenge the footballers to a game of cricket to win Pepsi, while

the footballers show them how to play cricket - football style. PepsiCo India said, Being a true

soulmate of the youth, Pepsi continues to bring to life Youngistaans passions in newer and refreshing

formats. We celebrated the unorthodox face of cricket last year and gave the T20 twist to football this

year; now we are bringing together both these sports on one common platform. Featuring the biggest

names from the world of cricket and football, the campaign reflects our commitment to both the sports

in our signature, Change the Game way. The campaign is supported by a 360-degree approachincluding on-air, outdoor & on-ground initiatives; special edition packaging featuring and digital

engagement programmers.

Acquisition in Book Value or belowAnother favorable scenario for PepsiCo would involve the acquisition of a beverage or processed foodmanufacturer for book value or below. This scenario is somewhat realistic due to the fact that manysmaller snack companies incurred sizeable debt obligations in the mid 90s when the U.S. economy wasthriving. These same companies are experiencing smaller profit margins due to higher commodities

prices and increasing competition from giants such as Frito-Lay. All these factors combine to make thesmaller companies prime targets for acquisition for PepsiCo. Pepsi also favors partnerships as a methodof controlling risk when entering new markets.


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Adulteration of productsPepsi and Diet Pepsi had a scare in 1993 when consumers in more than 20 states found syringes in thebrand's soda cans. The reports, which quickly hit national news, created a panic among consumers. Butit wasn't Pepsi's fault. Authorities eventually found video of a woman in Colorado who had been

inserting syringes into cans.

Another equally dismal scenario for PepsiCo would be product contamination

or product tampering. This very scenario occurred to Tylenol and it never

recovered from the bad press. It also occurred to both PepsiCo and Coca-Cola in

India. Their respective products were even banned in some Indian states for a short while. The culprit in

this instance was pesticide contamination. On a related note, Frito-Lay, sensing the public's mistrust of

genetically modified produce, instructed its suppliers to refrain from using genetically modified corn. If

it had not done so it is highly probable that the snack food giant would have suffered a public relations

nightmare.

PepsiCo CEO Indra Nooyi took the wheel in 2006

Nooyi set a goal to expand its "good-for-you" food divisions. , shewas aware of this trend and decided to grow the company's healthyfood business. In 2010, those products -- Quaker Oats, Tropicana,and the Frito Lay Natural line -- contributed $10 billion to annual

revenue, according to CNN Money. Her goal was to have theseproducts account for $30 billion in revenue by 2020. Butas investors said the CEO is too focused on this goal, when itshould have been focused on battling Coke. Despite the recenthealth trend, none of the brand's products are as high-profile asPepsi itself.

March 2011 -- Pepsi fell from the No.2 spot

Ever since, Coca-Cola has reigned supreme with Classic in the No.1 sales spot and Diet Coke as No.2.

According to MSNBC, Diet Coke sold 927 million cases in 2010, compared to Pepsi's 892 million. Ofcourse, this pales in comparison to the 1.6 billion cases of regular Coke that were sold int he same year.
http://money.cnn.com/2010/04/27/news/companies/indra_nooyi_pepsico.fortune/index.htmhttp://money.cnn.com/2010/04/27/news/companies/indra_nooyi_pepsico.fortune/index.htm


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Diet Coke's rise reflects the growing trend toward diet drinks. Today there are four diet drinks amongthe top 10 drinks (versions of Coke, Pepsi, Mountain Dew, and Dr. Pepper) whereas there were only twoon the list 10 years ago.

PepsiCos Global Strategy

Pepsi Co's competitive model has evolved from being a beverage company such as Coca-Cola and into aprocessed food manufacturer more similar to Kraft. This means that PepsiCo is less susceptible to themarket pressures that would normally affect the revenues of a soft drink company. It also means thatPepsiCo must devote significant funds to advertising expenditures to ensure that its products gain highvisibility.

PepsiCo currently dominates the snack food sector and it enjoys a 34% share of the carbonated softdrink market in the U.S. Frito-Lay North America has remained perched in the number one position in

snack foods for many years now. PepsiCo acquired Quaker Oats in 2005 and this acquisition in turnstrengthened its position in the energy drink and health food sector. Gatorade is the top-selling sportsdrink and Quaker Oats markets a large variety of snacks, cereals and energy bars. Aquafina, the bottledwater, is also the top-selling bottled water brand in the U.S. The Aquafina brand has proven to be highlysuccessful and PepsiCo has recently begun marketing some variations such as: Aquafina Sparkling,Aquafina Alive and Aquafina plus+.

Pepsi's revenue, adjusted for foreign exchange, increased more than 8% in the fourth quarter from thesame period a year ago, as the Frito-Lay North America and PepsiCo International segments deliveredstrong growth. However, adjusted operating profit fell to around 11% from 14% in the year-ago quarter,and the solid performances overseas and from Frito-Lay were partially mitigated by weakness in

PepsiCo Americas beverages. Pepsi underperformed rival Coca-Cola KO in North America, as the firm'syear-over-year rate of volume decline accelerated to 6% in the fourth quarter, from around 3% in theprevious quarter.

PepsiCo has been pursuing a differentiation strategy but it would do well to focus instead on a low-coststrategy. Consumers are focusing more on value in the current recessionary environment. For example,consumers will continue to buy more multiservice products from grocery stores at the expense of more-profitable single-serve items, and this is likely to damage PepsiCo's operating margins in the near term.While growth in the snack business has held up well so far, partly due to the diversification to revenuethat the segment offers, the economic downturn will eventually take its toll on snack results as well.

Despite the short-term challenges that the company is likely to face, PepsiCo's broad portfolio ofproducts will stand the firm in good stead in the face of a challenging short-term environment. With its

direct store delivery distribution network and strong portfolio of brands, PepsiCo is still one the

strongest of the consumer staples companies.
http://www.msnbc.msn.com/id/42132603/ns/business-us_business/t/diet-coke-passes-pepsi-no-soda-us/http://www.msnbc.msn.com/id/42132603/ns/business-us_business/t/diet-coke-passes-pepsi-no-soda-us/http://www.msnbc.msn.com/id/42132603/ns/business-us_business/t/diet-coke-passes-pepsi-no-soda-us/http://www.msnbc.msn.com/id/42132603/ns/business-us_business/t/diet-coke-passes-pepsi-no-soda-us/


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Pepsi Cos activities in Bangladesh

Save the ChildrenIn 2009, PepsiCo Foundation provided a three-year, $5 million grant to help promote the survival

and well-being of children living in rural India and Bangladesh. With PepsiCo Foundation's funding,Save the Children can build on its local and international expertise to design and implement

community-based programs that improve the health and nutrition of children under age five.

In Bangladesh, Save the Children led a successful pilot study using ready-to-use food that is

specially formulated to help treat children's acute malnutrition. Findings showed a community-based

approach (nonclinical or hospital setting) carried out by community health workers is an effective

method for addressing severe acute malnutrition in children under five years old. The results of this

study are influencing policy and practice across the country. Additionally, the organization is

introducing market-led, income-generation activities with women, so families can create and sustain

improvements to food security and increase their livelihoods. Save the Children is also building thecapacity of local communities and other nongovernmental organizations in India and Bangladesh so

the benefits delivered can be sustained over the long term.

The combined global resources of Save the Children and PepsiCo Foundation are helping to make a

profound difference in the lives of 545,000 children under age five, mothers, and pregnant and

lactating women in India and Bangladesh.

The Foundations strong partnership with Save the Children has reached approximately 850,000

people in India and Bangladesh to help improve health and nutrition. And the Foundations

partnership with the World Food Program (WFP), which leverages PepsiCos supply chain expertiseto improve the WFPs logistics efficiency, will indirectly benefit approximately 90 million people

served by the program.

Safe Water Network GrantThe initiative led by the Safe Water Network (SWN) and supported by the PepsiCo Foundation involves

bringing safe water to households and villages in India, Ghana and Bangladesh. Working with non-

governmental and community organizations and the private sector, SWN will address the critical water

needs of nearly a quarter million people by supporting the development and implementation of water

systems that will reliably provide neglected populations with safe, affordable water. The methods

include rainwater harvesting, village-level water systems and water kiosks. Safe Water Networkprograms also work to mobilize and educate communities to raise awareness and provisions to create

and maintain permanent clean water supplies. SWN will receive $3.5 million during a three-year period

based on annual progress.


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Pepsi change the game third activation event61 cricket fans won tickets to world cup matches, where one supreme winner went to Mumbai for the

Final of ICC Cricket World Cup 2011. Pepsi have changed the game of the cricket enthusiasts by

creating an opportunity to win tickets to ICC Cricket World Cup Matches. In the midst of this cricketing

mayhem, where Bangladeshi cricket lovers are going crazy trying to obtain match tickets. Among the60, 8 lucky winners will have the chance to go to the field on the drinks trolley during the drinks break.

Apart from match tickets everyone received consolation prizes for participation in the engagement

session.

Unique photograph opportunity with the ICC World Cup 2011 trophy

The ICC Cricket World Cup 2011 frenzy was building up across the world. To add to the World Cup

excitement in Bangladesh, Pepsi brought the ICC World Cup 2011 trophy to Bangladesh; so that

thousands of cricket lovers could fulfill their dreams by getting a closer look at the trophy and take

pictures with it. Pepsi, being the official global partner of the ICC World Cup 2011 has brought exciting

new campaigns for its consumers. This trophy activation was brought by Pepsi to the cricket fans of the

nation as part of the hugely popular campaign Pepsi Change the Game. On the 9th of February, amassive crowd lined up at the atrium of Star Cineplex at Bashundhara City. Cricket lovers stood in line

since early morning to catch a glimpse of the coveted trophy. Countless Pepsi consumers got a chance to

take pictures with the trophy. Later on the trophy was taken to other major youth hang outs across the

city through tight security. Mr. Khurshid Irfan Chowdhury, Executive Director, Mr. Arif Hossain,


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Market Development Manager of Transcom Beverages Limited and Mr. Prateek Sabharwal, Country

Manager of PepsiCo Bangladesh were present when the trophy was unveiled in Star Cineplex of

Bashundhara City. The trophy was taken to Plaza A.R, Abahani field and then to the BCB office.

Everyone was delighted to participate in this incredible game changing moment and to have fulfilled

their dreams.

Challenges

By 2050, the world's population is expected to number nine billion. This population growth presentscomplex challenges and trade-offs for both the health of people and the planet. Even by 2030, it's

predicted that energy and food demand will be 45 percent and 50 percent higher, respectively, and two-

third of the earth's population will live in water-stressed countries.

As a food and beverage company that both depends on food production for their raw materialsand seeks to deliver nutritious, delicious foods and beverages to their consumers, they need to

integrate and balance their goals in human and environmental sustainability in order to manage

future resource risk.

It is clear that the health of the planet and the health of people are becoming increasinglyintertwined. Progress in achieving some of our environmental and health goals requires complex

trade-offs to ensure that one set of goals doesn't advance at the cost of others.


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All of us know that Pepsi-Cola and Coca-Cola have had the competition for about 80 years.Although Pepsi-Cola have won several times during this competition, the market share of Pepsi-

cola is a little bit smaller than Coca-Cola. There is another threat nowadays. Some local cola

such as FeiChang and FenHuang cola have taken their feet in the market. Their advertisement

says "Chinese people drink our own cola". It is well known that China is a united and patriotic

nation. So these words can really catch Chinese people's heart. And these local cola's flavor is

more suitable for Chinese. So it cannot be ignored.

But we cannot consider things just on one side. Still there are some disadvantages existing inPepsi-Cola The pipe-chat 3 showed that most of the people like the package of Coca-Cola

best.48% people like it. It has only 32% people prefer the package of Pepsi-Cola. So the design

of Pepsi-Cola's package is not as attractive as Coca--cola. It still needs to be improved. We

suggest that the package needs to be designed more colorful to attract people's attention.

Opportunities:

Pepsi has stayed in this market for almost one century. So they are so experienced and stationedin people's mind deeply. Now no one doesn't know the brand Pepsi-Cola Whenever the namePepsi is heard, people will conjure up the image of fresh and cool drink.

Pepsi still has the opportunity to enlarge its market share because the cola in the market is quitemonotonic. Most of the end user is young people. There are still some people who do not like the

taste of the cola. So we can try to provide some other taste of cola such as adding some lemon

juice. We can change the flavor in order to meet different taste of different people.

Pepsi also comparing with the competitors and find their disadvantages to update its own quality,flavor and also package promptly in order to satisfy the consumers' need. This is the biggestadvantage of Pepsi Company.


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Pepsi is such an experienced powerful global company, which has a basic of a great fund. So ithas the ability to place an idle sum of money to the promotion. We can see that the advertisementof Pepsi-Cola is so attractive. It also invited the top famous people to advertise for it. Theadvertisement is so elaborate and attractive so that Pepsi gained the special prize of theadvertisement Granny.

Recommendation:

Being in such a tense competition (just like the brand Coca-Cola), Pepsi-Cola should not take the directand tough attack upon it. There is no good to either side. The best wad is to keep a peaceful relationshipwith it and always compare with others; we should find their disadvantages and show our advantages onthis aspect. Then by and by, the people would think ours is betted Of course the most important rule is toimprove ourselves to meet the consumers.

Pepsi-Cola should improve the design of the package first. As it is advertised as" the choice ofnew generation", the design must be looked young and fresh. So the color should be more sharpand attractive.

As the flavor and ingredients of cola in the market are similar and the most active consumer isthe young people, we can diversify the Pepsi production to meet the different need of theconsumers. That is customer-orientated.

Besides the Diet cola for the ladies, we can have many other new choices. For example, we cancreate a new kind of cola more suitable for children. Maybe we can add the Vitamins or somenutritious element that are necessary to children. Or we can create a new flavor like mint-colaand the cola with very light alcoholic which is more suitable for the adults.

Corporations have a particular responsibility to utilize resources efficiently. And large companieslike PepsiCo must balance this responsibility with delivering profitable growth to shareholders,while also considering the integrated impacts on nutrition, the environment and agriculture in allbusiness activities.


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Conclusion

We have worked as a management team of Pepsi cola. We have learnt and understood about the

importance of a good management. An effective management is one which actually guides the employeeonto a path of efficient and productive work. In true sense, effective management involves directing andorganizing people or resources under ones influence, to ensure better co-ordination, productivity andbest possible positive output in any field.

In a sentence, we can say that management is important for achieving company targets, reduction inwastage, simplifies the organizational structure, increases stability, and ensures the goals.

All credit goes to: Santus Kumar Deb

Assistant Professor, THM

An overview of managerial operations of PEPSI-CO

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