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... er, and create new opportunities for every PepsiCo division. The combined enterprise will rank among the world's five largest consumer product companies. PepsiCo bought $ 383 million worth of goods and services from minority-owned and women-owned suppliers in the year of 2000. The Women's Business Enterprise National Council named the company among America's Top Corporations for Women's Business Enterprise. PepsiCo minority and women business development programs were rated among the top- 10 nationally by the National Minority Supplier Development Council.
We were named by Fortune magazine to its list of America's " 50 Best Companies for Minorities, " by Hispanic magazine to its list of "The Hundred Companies Providing the Most Opportunities to Hispanics, " by Latina Style magazine to its list of "The 50 Best Companies for Latinas, " and by Minority MBA magazine to its list of "Ten Top Companies for Minority MBAs. " The company encourages conservation, recycling and energy use programs that promote clean air and water and reduce landfill. Last year, the Occupational Health and Safety Administration named two more PepsiCo facilities to its top "STAR" status as part of the agency's Voluntary Protection Program. 4. Human Resources: The company has a wealth of talent across the corporation. It starts with its exceptional frontline team, the people out there serving the customers 365 days a year, and it extends to our corporate staff.
The company not only has great opportunities, but the skills, experience, dedication and intellectual horsepower to make the most of them. The companys continued growth has created outstanding career opportunities for talented professionals in a variety of specialized fields, such as information technology, treasury, tax, human resources, law, accounting, public affairs, audit. All successful applicants share a commitment to PepsiCo's goals and an ability to thrive in a fast-paced, results-oriented environment. In exchange, the company offers a highly competitive compensation and benefits package. Pepsi executives are expected to be physically fit as well as mentally alert: Pepsi employees four physical-fitness instructors at its headquarters. It is an unwritten rule that to get ahead in the company a manager must stay in shape.
The company encourages one-on-one sports as well as interdepartmental competition in such games a soccer and basketball. 5. Information Systems: In responding to market demands for efficient 24 -hour "order-to-delivery" process for customer orders, PepsiCo has installed a computer system that links an effective wide area network that allows immediate transmission of customer orders. The outcome has been to integrate with a wide area network, transmit accurate, complete customer order data, allowing the company to more efficiently load trucks, schedule deliveries and save man-hours. V.
ANALYSIS OF STRATEGIC FACTORS A. Key strategic factors are: 1. Recyclability of Containers Due to the liquid nature of Pepsi's product, it is necessary that a solid and non-porous container be used to store the product. This fact leads to the use of plastics, aluminum, and glass as materials for the containers that Pepsi is stored in. These materials work very well for the purpose of their use, however these materials do not biodegrade easily. Every day, 93 million empty soft drink bottles and cans are thrown away, rather than recycled.
In November 2000, the boards of Pepsi and Coke passed resolutions for future container recycling targets. The resolutions call upon management to establish recycling targets and prepare a plan to achieve them by January 1, 2005. There are two goals: (1) achieving an 80 percent national recycling rate for bottles and cans; and (2) making plastic bottles with an average of 25 percent recycled plastic. The implementation of these resolutions will have a future effect on the cost basis of Pepsi's product, and a positive environmental impact if the recycling targets are met. 2. Continued growth to other segments, decline of cola interest The beverage industry is moving towards the alternative drinks sector. Although in recent times, mainstream beverages have been making a revival, it is obvious that alternative drinks will continue to grow.
Pepsi can utilize its excellent brand recognition and reputation to invest in and capitalize on growth in this area, and increase it market share against Coca-Cola at the same time. 3. Increased use of exclusivity agreements with restaurant chains and college campuses Coca-Cola has a majority of exclusivity with restaurant chains including McDonalds and other major fast food chains. The benefits of exclusivity agreements give Coca-Cola a major advantage in channel distribution. The major reason Taco Bell was purchased by Pepsi was to create a new channel for Pepsi to be sold in restaurants. In addition to restaurants, soft drink manufacturers are willing to engage in "cola wars" to win the rights to supply all the machines in a given school in return for a commission. The funds go to support financially starved school programs that could range from buying new library books to beefing up the computer lab. 4.
Coca-Colas market dominance The dominance of Coca Cola in the soft drink market has always been considered a major factor for Pepsi management. As long as Coca Cola continues to retain a dominant market share, Pepsi should continue to aggressively acquire Coca Cola market share. 5. Excessive work pressure resulting in exodus of Pepsi management The creative tension which is constantly being placed on Pepsi management has resulted in a number of management leaving the company for Coca Cola. Coca Cola has consistently been able to acquire the Pepsi Tigers, or very good managers, away from Pepsi. B. Evaluation of the current mission and objectives 1.
Mission The overall mission of PepsiCo is to increase the value of shareholder's investments. This is achieved through sales growth, cost controls and wise investment of resources. PepsiCo believes that their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity. 2. Objectives a. Concentration of resources on growth of businesses through internal growth and carefully selected acquisitions PepsiCo has adopted a plan for growth by continually addressing the opportunities and risks associated with the global marketplace.
The corporation's success reflects their continuing commitment to growth and a focus on those businesses where they can drive their own growth and create opportunities. b. Contribute to the quality of life in communities PepsiCo believes that as a corporate citizen, it is responsible to contribute to the quality of life in the communities it serves. This policy is implemented through support of social agencies, projects, and programs.
The company also supports employee volunteer activities through contributions of time, talent, and funds. Each PepsiCo division is responsible for its own giving program with corporate giving focused on supporting employee volunteer activities. VI. STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY Out of the many strategic alternatives that PepsiCo could choose to follow, we have chosen to endorse one that fosters continued growth and diversification.
Although their over-diversified portfolio has hindered their International Growth, these strategies strengthen their overall corporate worth and market presence domestically. As consultants for PepsiCo, we are making the following recommendations: Pepsi should focus on increasing sales globally to compete effectively with Coke. They have been beaten badly in some markets, and need to focus more on "un-tapped" areas. Continue to diversify their beverage selection through acquisitions. This will enable PepsiCo to combat the decreased interest in cola. Going along with this, PepsiCo needs to ensure that they can properly manage all of these acquired companies and should divest those that show limited potential.
Increase the use of exclusivity agreements to boost their sales in key markets. This may make it harder to keep costs low but will ensure added revenues. Another reason why Coke has continued to beat Pepsi is through its exclusivity agreements with restaurant chains, sports and entertainment complexes, and college campuses. More attention in this area will help to battle Coke's dominance. Capitalize on their aggressive corporate culture in overseas dealings. This can help to combat the weakness of their current international strategies.
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