Final Report of Pipse

7/31/2019 Final Report of Pipse

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SEMINAR SERIES FINAL PROJECT

Pepsi Overview

PepsiCo, Inc. is one of the most successful consumer products company all over the world which

annual income more than $30 billion and has more than 480,000 employees. Pepsi Company

incorporated in 1931 , known as Loft Inc. After expanding the business company changed its name

as PepsiCo, after a merger with Frito-Lay in 1965 . This merger set the foundation for the

company's tremendous growth.

PepsiCo's products soon got goodwill all over the world. Currently, PepsiCo divisions operate in

three major US and international businesses: beverages, snack foods, and restaurants. In each of

these businesses, PepsiCo has attained respect being the world leader in serving soft drink bottling,

the world largest snack chip producer, and the world largest franchised and company operated

restaurant system. All the increasing success of Pepsi depends on high quality, performance, strong

marketing strategies, competitive advantage, human capital products and business practices.

PepsiCo's overall mission is not only to increase the share value of their shareholders' invested

capital through sales growth, investments and financial activities but also to improve the quality

and value of their products by providing a powerful, safe, economically efficient and a healthy

environment for their customers; and by providing a reasonable profit to their shareholders while

maintaining the highest standards of integrity.

When Pakistan came into existence Pepsi Cola International was already in Pakistani areas. Now

Pepsi Cola International has 9 plants working in Pakistan at different locations Lahore, Karachi,

Hyderabad, Gujranwala, Faisalabad, Rawalpindi, Meer-pur, Sakhar, Peshawar, and Multan.

HistoryPepsi Co international

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PepsiCo traces its origins to 1898 when Caleb Bradham , a pharmacist in New Bern, North

Carolina, created a curative drink for Dyspepsia called Pepsi-Cola. Pepsi-Cola, later referred to

simply as Pepsi, was a Mixture of Carbonated Wate r, cane-sugar syrup, and an extract from

tropical kola nuts.

Pepsi has have enriched history . From its beginnings the people make the story what it is -

including its inventor, customers, competitors, corporate managers, salesmen, distributors, cartoon

spokes-persons and including some of the biggest names in entertainment history. There was good

times and bad times including lots and lots of changes with the passage of time.

To sell his product, Bradham established the Pepsi-Cola Company in 1903 . At this time, bottling

was a new innovation in food packaging.

In 1931, from the holding company Charles G. Guth of the Loft Candy Company in New York

City purchased Pepsi-Cola . Guth had difficulty getting the business going again, but he increased

sales by selling larger bottles at an unchanged price.

By 1933 Pepsi-Cola was sold by 313 franchised U.S. dealers; bottled in the United States, Cuba,

and England; and sold in 83 countries .

PepsiCos snack-food business dates from 1932 when ice-cream seller Elmer Doolin of San

Antonio, Texas, developed a business idea after eating a package of Mexican-made fried corn

chips. He purchased a recipe for the chips and established the Frito Company in 1932 .

Originally, Doolin produced Fritos corn chips in his mothers kitchen. He later mechanized

production and moved operations to Dallas, Texas, in 1933 . Around the same time, Herman Lay of

Nashville, Tennessee, developed a business distributing potato chips made by an Atlanta

manufacturer.

In 1938 Lay bought the manufacturing company, Renaming it H. W. Lay & Company . The

company prospered, becoming one of the largest producers and distributors of snack foods in the

southeastern United States. The company made and sold many snack foods, but its best seller was

its brand of potato chips, known as Lays.

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In 1945 the Frito Company gave H. W. Lay & Company exclusive Southeast distribution rights for

Fritos corn chips, a market both companies hoped to expand nationwide. After continuing their

close business association for over 15 years, the two companies merged in 1961 to become Frito-

Lay, Inc., with headquarters in Texas.

Caleb Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi-Cola, founded

PepsiCos beverage business at the turn of the century. Pepsi-Cola also offers a variety of non-

carbonated beverages, including Aquafina bottled water .

In 1992 Pepsi-Cola formed a partnership with Thomas J. Lipton Co . Today Lipton is the

biggest selling ready-to-drink tea brand in the United States.

In 2001 SoBe became a part of Pepsi-Cola . SoBe manufactures and markets an innovative line of

beverages including fruit blends, energy drinks, dairy-based drinks, exotic teas and other beverages

with herbal ingredients. , Pepsi-Cola soft drink operations include the business of Seven-Up

International. Pepsi-Cola beverages are available in about 200 countries and territories.

Pepsi-Cola provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers

and food service customers. This includes some of the world's best-loved and most-recognized

advertising. New advertising and exciting promotions keep Pepsi-Cola brands young. The

company manufactures and sells soft drink concentrate to Pepsi-Cola bottlers. The company also

provides fountain beverage products.

Pepsi Naubahar

The owner of the company Naubahar is Mr. Muhammad Shamim Khan. Address: S.I.E, Model

Town, Gujranwala, Pakistan Pepsi is working in Gujranwala since 1981.Pepsi is working in

Gujranwala as a franchise with name of Naubahar Bottling Company Gujranwala (NBC) is a

regional based company as a certain areas has been allocated to it under an agreement for its

operations. Pepsi has yet introduced 9 brands in Pakistan. Pepsi is working under ISO 9002

standards till for 1998. Naubahar is a largest franchise of Pepsi cola International in Pakistan.

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Mission & Vision

Pepsi Co Mission & Vision

Vision Statement

Mission statement

4

PepsiCos

responsibility

is

to

continuallyimproveallaspectsofthe

world

in

which

we

operate

environment,

social,

economic

creating

a

bettertomorrow

than

today

Tomorrow >

Today.

We

believeSustainability livesat

theintersectionofpublicand

corporate

interest.

It

encompasses

citizenship

and

corporatesocialresponsibility,

whichareaboutdoingtheright

thingsforsocietyand forthe

business.Itencom

passesthe

healthoftheCompany,whichis

aboutfulfilling ourmissionof

creating financialrewardsand

growth.

Tobetheworld'spremier

consumerProductsCompany

focused onconvenientfoods

andbeverages.Weseekto

produce

healthy financial

rewards toinvestorsaswe

provide

opportunities

for

growthandenrichmenttoour

employees,

our

business

partners andthe

communities

inwhichweoperate,andin

everythingwedo,

westrivefor

honesty,

fairness

and

integrity.


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Major Brands

Pepsi

Team

Miranda

7Cup

Mountain Dew

Pepsi Max

7Cup Free

Pepsi Twist

Organization Structure

Organizational Hierarchy

Departments

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Shipping

Production

Sales

Marketing & Services

Quality Control

Finance

HR

Human Resource Management

Overview

Human resource is the main power of every company. In NBC employees are working on

permanent basis, because of seasonal demand in the market they need more man power thats

why they might hire people on daily wages. Here is not very formal system for HRM.

Asif Khan is Assistant Manager at NBC HR Department. He looks after the matter of HRM.

Human Resource Management Process:

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Job Analysis

The systematic process of determining the skill, duties and knowledge required for performing

specific jobs in an organization. Job analysis is review after one or two years. They review job

analysis after 2 or 3 years. Job analysis help in following matters.

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It may be either written or verbal. Example format is given

below

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9

Naubahar Bottling Company Gujranwala

Position Title:

Salary:

Reporting:

Subordinates:

Specifications:

Key Tasks:

Summery

Prepared By Date Expiry Date


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Job Analysis MethodsJob Analysis Methods

Employees record their duties

Boss observe their subordinates duties and activities

Strategic and HR Planning

StrategicStrategic PlanningPlanning

The determining of overall organizational purposes and goals and how they are to be achieved.

HR PlanningHR PlanningThe process of systematically reviewing human resource requirement to ensure that the requirednumber of employees, with the required skills, are available when and where they are needed.

HR Manager every year plan for balance employee demand and supply of employees due toseasonal variation in production and other factors. The following diagram help inrecruitment/decruitment.

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EXTERNALENVIRONMENT INTERNAL

ENVIRONMENT


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Recruitment Methods Internally & Externally

Internal Recruitment Methods:

Following method used:

Employees Referrals through employees of NBC

Managers Recommendations,

Previous record of CVs.

Job posting through notes board.

External Recruitment Sources:

These sources used Pepsi

Competitors in the labor market

The unemployed

External Recruitment Methods:

Following methods used:

Advertising

New paper ads

Organizational Website

Online recruiters

Selection

Selection is method of selecting those applicants who are fulfilling job specifications from number of applicants.Set by the organizationSelection is not managed by only one authority but it is approved by the different authorities.Setting criteria for selection is better for company and also candidates for selection.

11Selection TestsEmployment

Interviews


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After receiving application and resumes, they review these documents sort out who are bestfor us.

Then we conduct aptitude test Next is to take interview that is better in testAn interview can be one or more than one time by different authorities Pepsi use to take theinterview firstly

Head of DepartmentHuman ResourcesDirector of Company

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Reference &Background Checks

SelectionDecision

New Employee

RecruitedCandidate

Review ofResumes

Selection

Tests

EmploymentInterviews

Reference &Background Checks

SelectionDecision

New Employee


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All authorities have different criteria set in their mindPersonalityConfidenceBackgroundEducationExperiencedDecision makingJob and working interest

These are the qualities must have the candidate for selectionSelection is also based on the nature of job offering to candidate have.They prefer those persons who have qualification and experience but neglected and reject thosewho are high qualifies but not such experienced persons.

Problem that effect in selection processReferenceCulture differenceUnder specifications

Before selection of any candidates some other factors must be noticed are,Before selection of any candidates some other factors must be noticed are,

Selection testReferences checksBack ground investigationAchievement cause of last employment leaveWhy applicant chose usWhat is his aimAnd how he accomplished it etc

These are all the things that any interviewer of examiner can test through different steps f interview

and testing psychologyThese steps include in evaluation about the candidates and management has to take quick decisionon it. So far they make a committee that actually always focused on this process

Selection processTest

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InterviewEvaluationResultsFeedback

For selection there company needs to develop image in the mind of customers. But somemultinational that have already matured and treated their image does not need for this.This is happened in NBC. People will prefer it because of their image without any heavyadvertisement. They just made an advertisement through media or new people and collectthousands of copies of job applicant that make the selection easy for them.The company name priorities in choosing applicant contain one is attitude of the candidate.If the attitude and other requirements are good then he will be recognized for the selectionIn record if company the company is settle criteria is best and more beneficial whenever they usefor selecting the applicant for Job.

Training and DevelopmentDetermining training and development need

Within 3 months after promotion or newly hired employee observed that whether he needs of training program or not. If there is need training then established it.

Establishing training and development objectives?

To provide the different supervisor:

Knowledge and value of human resources.The skills to apply them.To improve the attitudes

Training and development methods:

Following methods used in Pepsi:

Traditional Training MethodsTraditional Training Methods

On-The-JobMentoring And CoachingClassroom LecturesInternships

Technology-Based Training MethodsTechnology-Based Training Methods

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VideotapesAudiotapes

Implementing Training and Development:Implementing Training and Development:

It is not enough to prepare good plans, but NBC has to implement properly to make employeemore professional.

Evaluating Training and Development:Evaluating Training and Development:

Training and development can be evaluated by the following means.

Participants opinionsExtent of learningBehavioral ChangeAccomplishment of T & D objectives

Compensation

The total of all rewards provided employees in return for their services. NBCs executivecompensation programs are designed to enable it to recruit, retain and motivate a large group of talented and diverse domestic and international executives. This is essential for NBC to achieve its

challenging performance objective. NBC's executive compensation mix includes a base salary,annual cash bonus awards, and long-term incentive compensation in the form of performanceunits. Bonus awards for NBC's CEO and executive officers are paid based on NBC's overall

performance.

Various forms of compensation

Direct financial compensationDirect financial compensation

In NBC direct financial compensation method is followed that is pay that a person receives in the

form of wages, salary, bonuses, and commissions.

Indirect financial compensationIndirect financial compensation

In NBC this way is also followed that consists of financial rewards that are not included infinancial rewards, like social securitys, family and medical leave.

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Nonfinancial compensationNonfinancial compensation

Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or physical environment in which person works.

Factors Determining Compensation

In NBC compensation is determined on the following basis.

Merit PayMerit Pay

Pay increase given to employees based on their level of performance as indicated in the appraisal.The increase is added to the employees base pay.

Variable pay (BonusVariable pay (Bonus )

The most common type of variable pay for performance is the bonus that is one time reward that isnot added to employees base pay.

Skill based paySkill based pay

A system that compensates employees on the basis of job-related skills and the knowledge thatthey possess.SenioritySeniority

The length of time that an employee has worked in various capacities with the firm.

Safety and Health of Employees

HazardsHazards :

Health Hazards

1. Noise of plant may reduce listening power of employees.

2. Bad smell was coming from store due to leakage of bottles can affect smelling power of

employees.

3. Dirty washroom system may be harmful for health.

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4. Temperature is not maintained. It means in winter temperature is very cool and in summer

very hot temperature for workers.

5. Water leakage from roof during rain and stand on floor may cause for disease

Safety Hazards

1. A bottle may burst during filling gas and pieces of glass fly in environment that cause to

injure operators.

2. During process of filling bottle operator may injure.

3. During handling bottles worker may suffer injury.

4. There is possibility during washing bottle, water may harmful for hands.

MeasuresMeasures :There are following measures taken by NBC for safety and health hazards

1. Recently they have purchased latest plant that is noise free.

2. They are training employees how to operate machines and equipments

3. They have provided mask and long shoes to employees for safety purpose

4. They do not force employee to work over his health condition.

5. Annual 28 leaves are allowed to employees.

6. They have provided cafeteria facility.7. They hired the doctor for first aid, treatment of employees and medical allowance also give

to employees.

8. The management also observes necessary precautions for the safety and health hazards.

Recommendations:Recommendations:

1. Install latest and improve the quantity of machines noise free

2. Make sure that bottle should not be leaked so that bad smell will not come

3. Keep clean washroom system

4. Maintain the temperature of working environment

5. Repair the building

6. Use plastic glass around the plant to protect the operator from burst bottle

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HRM Hierarchy

Shipping Department

NBC Company has a separate shipping department which consists of very experienced employees.

This department ensures the availability of its goods to every place where it is needed. Any

irresponsibility done by this department may cause serious damage for company sales. Thats why

NBC has made its separate shipping department to ensure its speedy and on time delivery.

Shipping is also responsible for proper management of empties and liquid vehicles loading

and off-loading i.e. time management is very important in this case.

Shipping department is also responsible for delivery of its products to distributors E.g. shop

retailers, restaurants and different occasions.

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Shipping department is also responsible for managing the empties that are

required to be used in production.

Sales and marketing department NBC is too much focusing on the development of its sales and marketing department which is

playing a vital role in increasing its growth, market share and distribution channels. Minimum

degree for marketing department is required that is MBA. Through this department, NBC is

gaining too much good will in Pakistan. Its employees are very cooperative with others and

communicate freely, if any ideas exist to share then they are motivated to share it with top level

management. NBC sales and marketing department performs following functions.

This department plans, develops and makes targets for sales.

For achieving those targets they make strategies and develop market.

They gather data about customers, distributors and other parties needs that help in

satisfying their customers.

Collection of all the data about each and every distributors/ outlets, about its sale, volume

and growth

They find the competitors weaknesses to convert them into their strength. They find the new markets where there is great potential.

They always keep an eye on competitors functions to prevent them to prevail on them.

Sales people keep eye on competitors promotional schemes.

After getting information about competitors, sales force share it to marketing manager and

marketing share it to HOD and then HOD shares it to Coo who takes final decision that

what to do against that specific activity.

Checking all the equipment time by time any removing their complaints.

Publicity that performs a major in creating image about products of company is also

management by this department.

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This activity is based on research and marketing people usually perform this activity. It is

basically checking the each and every shop and gets information that what the shopkeeper

is selling and keeping in the shop regarding beverages. This activity is performed in the

form of teams. Structure of the teams is as follows:

This department verifies about the publicity operation that includes:

Counters Wall Chalking Cabins Carbonated Board Plastic Sign Board Road Boards Simple Boards Pan flex

Finance Department

Finance Department is working with almost 90 employees. Whenever any department needs

money for anything then HOD of that specific department gets permission from COO and he after

satisfaction signs it and deliver it to finance department to issue money.

Cash department and accounts department that comes under the finance department of NBC. Cash

department does cash handling (collection and payment). The major part of cash collection is fromdealers and salesman based on their settlement sheet and daily sales report. Cash payment is done

on the vouchers issued by accounts department. Payments include employee's pay, bills,

allowances, procurement expenditures and day to day general expenses

Accounts department performs functions like Issuance of purchase vouchers for raw material, plant

and machinery and general store items and Check payment of payroll to employees including

wages, overtime, bonuses etc.

Computerized general ledger system is working and shows the result of each transaction

up to balance sheet and income/profit and loss statement.

Whenever any department needs money for anything then HOD of that specific department gets

permission from COO and he after satisfaction signs it and deliver it to finance department to issue

money.

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Production department

NBC has set its norms to not to bear any irresponsibility in production process for the sake of

quality. When sales force receive any complain about the quality of product then they never ignore

it, instead they convey that complains to Production manager Mr. Amir who transfers that

complain to HOD who takes any action while being within department. Production has almost

1200 employees who have been well trained. All the raw material which is used in the production

process is approved by the Pepsi cola international. These materials are according to the standards

of the PCI. If in any case the material does not match with the standards NBC does return it to the

supplier. In this case the entire cost of the material is beard by the supplier. This strong check on

the material is because of maintaining the high quality in the products which is the credentials of

the Pepsi cola products.

QQ UALITY UALITY CONTROLCONTROL

The main focus of NBC is on quality control. NBC doesnt compromise about the quality of its

products. Because this is their norm to serve healthy and quality product to its customers. Thatswhy NBC is getting great reputation in market. Quality check is made from zero level to final

products. For this purpose samples are taken from the production to check the quality. This

sampling is done after each an hour or half an hour. These samples are tested according to the PCI

standards.

For the purpose of quality control NBC has well constructed and equipped laboratories which

ensure the quality of syrups that best fits the health of customers. When NBC decides to launch a

new brand in the market then they get permission from PCI which checks the quality of certain

brand and after satisfaction PCI allows it to launch its brand in market.

The bottle washer cleans and sanitizes returnable bottles that have been brought back to the bottler.Bottles received from market are dirty and full dust and other things. Washing process makes themclean.

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No More Flavor

No Advertisement

No diversification

SWOT Analysis

Strengths

Strong Brand Image

New Taste provider

Market Leader

High Market Share

More Production Capacity

Well structure Departments

Strong Distribution Network

Financial Strengths

Huge Storage Capacity

Less Turnover Ratio

Weekly Meeting With Employees

Weakness

Higher Prices

Substitute Products

Limited Production (Tin Pack)

Bad Infrastructure

Bad Internal Environment

Not Parking Facilities

To Avoid Private Institutes applicant

No Comprehensive Training System

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production. Then lower level management and upper level will sit face to face to share ideas and

owner Coo will select the best one option. It is very helpful for our company because it eliminates

the communication gap.

Communication Style

NBCs communication system is very strong. They are free to talk with their seniors and can share

their views with them. Everyone has the right to give their opinion but these opinions are given in

flow from low level management to high level. We can give our suggestions through mail or

telephone, which is conveniently available, to top management as well as to any other employee of

the company.

Department interaction process

NBCs employees have good relations with other departments employees so that they can share

each mater directly but there is a proper way through which they share or resolve the problems.

The way is that we will go to our head of department and describe the problem. After that he will

communicate to head of the other department and he will communicate to lower employees to

resolve the problem. Departments high level management were fully interacted with each others

but not the low level management. When production department needs information about the

customers needs then they cant directly contact with sales force but they contact with the HOD of

marketing department who after getting information from the sales force convey situation to the

HOD of production department.

Organization as mechanistic/machine:

Pepsi NBC has a formal, bureaucratic style structure. The authority and information flow in NBC

was based on department vise division. Each department has an HOD to manage the conflicts,

assigning tasks and power and politics among people of related department. The flow of information is through mail as well as telephone.

NBCs employees have good relations with other departments employees so that they can share

each mater directly but there is a proper way through which they share or resolve the problems.

The way is that we will go to our head of department and describe the problem. After that he will

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communicate to head of the other department and he will communicate to lower employees to

resolve the problem. Departments high level management were fully interacted with each others

but not the low level management. When production department needs information about the

customers needs then they cant directly contact with sales force but they contact with the HOD of

marketing department who after getting information from the sales force convey situation to the

HOD of production department.

Organization as organisms:

There is a norm in NBC that weekly meetings are arranged from top level to lower level managers

who present their problems and the valid solutions are selected after the decision. Information

comes from the sales force which is at lower level, they can give information E.g. competitors policies, and that information comes first to Manager then HOD and then COO who has the final

authority to take any decision but they mutually communicate their ideas and Coo choose the best

one idea. If the production department sets the target that they will fill ten thousand crates and

sales people say that there is not as much sale as production department has targeted their

production. Then lower level management and upper level will sit face to face to share ideas and

owner Coo will select the best one option. It is very helpful for our company because it eliminates

the communication gap.

Power and Politic

In NBC HR, Production and marketing Manager has greater power than other employees.

HR Manager has power because he has formal authority of hiring, performance appraisal,

promotion and firing employees.

Production Manager has power because he has control over whole in time supply

especially in summer season.

Marketing Manager has power because he can give approval of dealership/agency.

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Above mentioned managers can influence the decision of top management. In NBC employeeswho have less power, use politic for personal interest by personal relationships.

Comparison

Conclusion

We have concluded that from above discussion, NBC is mostly related to machine metaphor and

less to organic. There are several reasons of it;

NBC is only responsible for production and distribution of products of PepsiCo

They have freedom of advertisement up to some extent

They are responsible to establish network of distribution within assigned territory

No need of need of innovation

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Variables Low Moderate High ExplanationEnvironmentStability

Relatively stable because technologicaland market conditions are wellunderstood

Standardization Efficient Production

Clarity of JobsRough division of job responsibilitiesaccording of specialization so that meetcontingencies

Centralization Top management is important

FormalCommunication

Flow of communication: Downward,Horizontal, Upward, or sometime little bitvariant rules

Commitment of Employees

Commitment to own job but recognizingthe need for flexibility in copingcontingencies.

OrganicMechanistic


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ProblemsHigher positions are filled from outside, people within the department should be promoted

to the chief technician and sales supervisor level.

Bad internal environment

There is not parking facilities for the loading cars as well as no transport facility for the

employees.

Noise of plant may reduce listening power of employees

There is no comprehensive training system foe the new employees. Due to these new

employees feel difficulties in their work at starting.

There is the low salary for the employees.

Daily allowance has been eliminated

Substitute products

Limited production (tin pack)

Recommendations

There should be proper training system for the employees to get the better results from employees.

There should be proper salary system.

Allowances should be given to the employees.

There is a large market share of big apple so co should also be focus on Miranda apple to

capture the market share.

Production of tin pack should be increase.

There should be promoted from internal employees instead of hiring from outside the

organization.

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Internal environment should be improved, try to eliminate the bad fragments.

As Pepsi has a huge are for production and storage of stock but there is no proper parking

system for the loading cars as well as visitors or employees.

Try to reduce the noise of the machines for the welfare of the employees.

Appendix

Hierarchy of Departments

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HRM

Marketing Derpatment

Finance Derpartment

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Production Department

Quality Control

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Shipping Derpartment

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Sales Derpartment

It Department

Final Report of Pipse

Documents

Transcript of Final Report of Pipse