Professional Practices

I.1.1

II.

PROJECT REPORT

PRESENTED BY
Areeba Amin

Hadiqua Nisar

Touqeer Khan

Umair Kasmani PRESENTED TO

Mr. Azmat Hafeez

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 ACKNOWLDEGEMENT

We would like to offer our humble gratitude to Allah Almighty, the most Gracious and the most
Merciful, who gave us strength and enabled us to achieve our goals.

The main purpose of the project is to know about the Practical implementation of all the
concepts we studied in the Professional Practices course.

All the material that has been included in this report is based on data/information gathered from
various sources and is based on certain assumptions. Although, due care and caution has been
taken to compile this report but the contained information may vary due to any change in any of
the concerned factors, and the actual results may differ substantially from the presented
information.

We are heartily thankful to our Professional Practices teacher; Mr. Azmat Hafeez whose
constant guidance and support enabled us to develop an understanding of the subject which
ultimately helped us in making of this project.

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 TABLE OF CONTENTS

I. Introduction .......................................................................................................................................... 6
i. About The CEO .................................................................................................................................. 7
ii. Products ............................................................................................................................................ 7
iii. Competitors ...................................................................................................................................... 8
COMPETITIVE PROFILE MATRIX (CPM) ......................................................................................................... 8
II. SWOT ANALYSIS OF PBL ........................................................................................................................ 9
i. STRENGTHS: ...................................................................................................................................... 9
ii. WEAKNESS: ....................................................................................................................................... 9
iii. OPPORTUNITY: ................................................................................................................................ 10
iv. THREATS: ..................................................................................................................................... 10
INTERNAL FACTOR ANALYSIS .............................................................................................................. 10
EXTERNAL FACTOR ANALYSIS.............................................................................................................. 11
III. SWOT KEYS POINTS: ........................................................................................................................ 12
i. STRENGTHS: .................................................................................................................................... 12
ii. WEAKNESS: ..................................................................................................................................... 12
iii. OPPORTUNITY: ................................................................................................................................ 13
iv. THREATS: ..................................................................................................................................... 13
IV. Globalization ................................................................................................................................... 13
V. Ethics & CSR ........................................................................................................................................ 13
VI. Mission, Vision, Values and Goals................................................................................................... 14
VII. Planning And Strategy ..................................................................................................................... 14
VIII. Supply Chain Strategy and Design .................................................................................................. 15
i. Supply Chain Planning ..................................................................................................................... 15
ii. Supply Chain Operation .................................................................................................................. 16
iii. Process views of a supply chain ...................................................................................................... 16
iv. Cycle View of Supply Chain ............................................................................................................. 16
v. Four supply chain process cycles .................................................................................................... 16

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 vi. Push/Pull View of Supply Chain .................................................................................................. 16
vii. Supply Chain Strategy ................................................................................................................. 17
Step 1 ...................................................................................................................................................... 17
The Customer and Supply Chain Uncertainty ......................................................................................... 17
Identifying customer needs .................................................................................................................... 17
Demand uncertainty and Implied Demand Uncertainty ........................................................................ 17
Uncertainty for the capability of the supply chain ................................................................................. 17
Step 2 ...................................................................................................................................................... 18
Understanding the Supply Chain Capabilities ......................................................................................... 18
Step 3 ...................................................................................................................................................... 18
Achieving the Strategic Fit ...................................................................................................................... 18
IX. Structure ......................................................................................................................................... 18
X. Control ................................................................................................................................................ 19
XI. Culture............................................................................................................................................. 20
XII. Employees ....................................................................................................................................... 20
XIII. Change ............................................................................................................................................ 20
XIV. Supporting Employees and Performance Goals ............................................................................. 21
XV. Achievements and Workplace ........................................................................................................ 22
XVI. Power and Politics ........................................................................................................................... 22
XVII. Communication and Resources ...................................................................................................... 23
XVIII. Conclusion ................................................................................................................................... 23
XIX. References ...................................................................................................................................... 24

Executive Summary

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The scope of the project is to discuss the strategies adopted and applied by “Pakistan
Beverages Ltd (PBL)”, Pakistan and also decide which alternative strategy will benefit the firm
most. Moreover the project also discusses the analysis of competition, market growth and trend,
opportunity analysis and strategies for creating competitive advantage adopted by ‘Pepsi Cola’
Pakistan. Purpose of this project is to study the strategies which PBL is doing in Pakistan
market for its products. Pepsi International is a world renowned brand. It is a very well organized
multinational company, which operates almost all over the world. In Pakistan It also has proved
itself to be the No.1 soft drink.

Now a days Pepsi is recognized as Pakistanis National drink Pepsi's greatest rival is Coca Cola.
Coca Cola has an international recognized brand. Coke's basic strength is its brand name. But
Pepsi with its aggressive marketing planning and quick diversification in creating and promoting
new ideas and product packaging, is successfully maintaining at No.1 position in Pakistan.
Pepsi is operating in Pakistan, through its 12 bottlers all over Pakistan. These bottlers are
Pepsi's strength. Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and
help in promoting the brand. Pepsi also launched its fast food chain KFC i.e. "Kentucky Fried
Chicken."

We also did analysis of the soft dink industry in Pakistan and worldwide. The soft drinks set to
become world's leading beverage sector. Global consumption of soft drinks is rising by 5% a
year.

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 INTRODUCTION TO THE COMPANY

I. Introduction

In the 1950’s one of the most potent business community of Pakistan, brimming with the spirit of
Independence from the late 1940’s, decided to launch a local brand of beverages. Pakistan
Beverage Limited created the brand Pakola which is still holding on its unique equity with the
Pakistanis within and outside the country. The Plant was situated in a 1,000 square yard area in
the hub of Karachi industrial area.

With the booming success of their brand and their well known reputation of enterprising

marketing and trade penetration, Pakistan Beverage Limited easily became the target of many a
multinational companies who were interested in seeding their beverage businesses in this new
land of tremendous opportunity driven by its demographics. In 1979 PBL International offered
the Pepsi Franchise to Pakistan Beverage Limited, the then Bottlers of Pakola Brands of
Beverage in different flavors.

Within five years of acquiring the Pepsi Franchise, Pakistan Beverage Limited succeeded in
replicating its previous business successes in the beverage market by becoming the market
leader in Soft Drinks in Karachi and then later in Hyderabad. The dynamic partnership which
was created in 1979 between Pakistan Beverage Limited and PBL International, indeed, is a
force to reckon with in the market which stands true till this day.

This great success gradually trickled down to other cities of Pakistan in the south and the North,
over a period of time, making Pepsi and its brands the most popular drink in the country.

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Today, with almost 60 acres of
accumulative area under manufacturing
and warehousing, Pakistan Beverage
Limited is one of the most well
equipped and well managed PBL
Bottling Plant among all Pepsi
franchises across the country. Pakistan
Beverage Limited currently consists of
5 manufacturing sites which includes
the Karachi Site, Yasir Fruit Juice,
Hyderabad Plant, Quetta Plant and the
Aquafina site.

i. About The CEO

The Company has made tremendous

progress under the dynamic leadership
of its Chief Executive/Managing Director Mr. Yasin Kassam Teli, his younger brother Mr. Siraj
Kassam Teli and his son Mr. Zaid Yasin. Not only did they make advancements in leaps and
bounds with respect to latest equipment installation, but also got gelled together a blend of
diverse group of highly qualified professionals to run and manage the ever so growing business.
Mr. Yasin Kassam Teli is the CEO of PBL, he believes in empowering people and leading and
enabling them to take on additional responsibilities. His leadership style uses a blend of
participative and transformational styles of leadership. He believes in engaging people valuing
their input as well as depends largely on communication and motivation of employees. The
leadership style he has adopted suit the organizational requirements of PBL.
Its revenue in Pakistan is largely dependent on local requirements. Food and Beverage industry
has a seasonal nature and it requires a lot of insight about the consumer behavior and supply
chain. Participative style of Mr. Teli allows him to consider inputs from all the different
organizational functions and transformational style allows him to understand and communicate
expectations and strategies. There are around 350-400 employees overall.

ii. Products

Pakistan Beverage Limited’s Karachi plant has four (4) state of the art bottling lines and one (1)
canning line which are all producing various brands and flavors of Carbonated Soft Drinks,
namely Pepsi, Mirinda, Mountain Dew, Diet Pepsi, 7up and 7up Free. The company also has
another renowned PBL brand of drinking bottled water under the brand name of Aquafina which
is produced at a plant located on super highway and is PSQCA certified. Through its subsidiary
company, M/s Yassir juice Limited, it is manufacturing juice under brand name Slice in
PET,GLASS and Tetra packs.

With the vision of becoming the largest branded beverage manufacturing and selling company,
Pakistan Beverage Limited is marching ahead and continues to provide superior quality
beverages to the consumers with a quality backup service to the customers in the market place.

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 Pakistan Beverage Limited, through another Group Company, M/s Pakola Products Limited,
also produces plain & flavored milk in Tetra Pack at its plant on Super Highway. It is market
leader in flavored milk with a wide range of different flavored.

iii. Competitors

The market in Pakistan is surely dominated by Pepsi. It has proven itself to be the No.1 soft
drink in Pakistan. Now days Pepsi is recognized as Pakistanis National drink. In 1971, first plant
of Pepsi was constructed in Multan, and from their after Pepsi is going higher and higher. Pepsi
is the choice soft drink of every one. It is consumed by all age groups because of its distinctive
taste. Compared with other Cola in the market, it is a bit sweeter and it contributes greatly to its
liking by all. Consumer's survey results explain the same outcome and Pepsi has been declared
as the most wanted soft drink of Pakistan.

Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke's
basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product packaging, is successfully
maintaining is No.1 position in Pakistan. In coming future Pepsi is also planning to enter into the
field of fruit drinks. For this purpose it has test marketed its mango juice in Karachi for the first
time.

When Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime
drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime,
"Teem" to compete with 7up. It successfully, after some years, took over 7up, and this
enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 70% of the
market share where as the coke just has 20% markets share.

COMPETITIVE PROFILE MATRIX (CPM)

Competitive Profile Matrix (CPM)

PEPSI COLA COCA COLA
Weighted Weighted
Critical Success Factors Weight Rating Rating
Score Score
Plant Location 0.07 3 0.21 3 0.21
Strong Brand Name 0.11 4 0.44 4 0.44
Large Marketing Resource Budget 0.09 4 0.36 3 0.27
Market Share 0.12 5 0.6 2 0.24
Product Share 0.09 4 0.36 4 0.36

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 Production Capacity 0.07 4 0.28 3 0.21
Innovation 0.11 4 0.44 4 0.44
Control Over Supply Chain 0.06 5 0.3 3 0.18
Availability 0.11 5 0.55 4 0.44
Advertising 0.1 5 0.5 3 0.3
Bottling Investment & Empty Management 0.03 4 0.12 4 0.12
Personels 0.04 3 0.12 4 0.16
TOTAL 1 4.28 3.37

Result:
 Pepsi is more Aggressive and have competitive edge as compare to Coca Cola.

II. SWOT ANALYSIS OF PBL

i. STRENGTHS:
PBL has a brand name that holds its own prestige in the world market. The multinational entity
of the PBL Pakistan gives it an edge upon other competitors. The management of this beverage
company comprises of one of the most professional people and the strong financial firmness
guarantees it a solid backing to sell its products. It is rated as the Pakistan’s number one cold
drink and is famed for its internationally well-known brand name “Pepsi Cola”. The product
quality has improved due to upgraded quality of packaging and the ameliorated liquid in
comparison to its competitors. Our personal experience is that the product is far better than any
product of its kind and also the improvement in packaging and the commencement of plastic
shells has received a favorable Response from the dealers and the loaders. The regular supply
of the products is strength of the company. The products are regularly supplied to the dealers
through proficient means of delivering and distribution has given PBL Pakistan an added
Advantage. PBL trucks supply the products regularly and always have the desired products for
the dealers. Its marketing strategy is very aggressive which aids it in further and incessant
production and distribution of its products. It gives trade offers to its dealers for storing more and
more PBLproducts and the signage strategies and agglomeration of all the marketing strategies
proves that it has a very aggressive marketing Strategy.

ii. WEAKNESS:
PBL does not enjoy the number because its far away from his Rival (Coke) in the market. Pepsi
target only young customers in their promotions not focusing different age groups social
classes.

One of the major weaknesses as in majority of companies is the lack of co-ordination between
the management and the worker. In short there is a weak point in their Human Resource
management. Workers feel that they are being exploited and are not given the remuneration
that they deserve .The decision making process in the company is highly centralized and the

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 workers feel that there exists no proper authority existing in the firm. The salesmen feel
Dissatisfied for they are totally powerless to make any decisions themselves In dealing with their
buyers they have not the slightest authority to allow them any credit or discount.

iii. OPPORTUNITY:

Company has brand equity in the eyes of customers, so its new Products can easily penetrate
in the market. The company may also diversify its business in some other potential business.
PBL may tie up or liaison with major showrooms, computer centers &Restaurant.

Noncarbonated drinks (Often a substitute for water) are the fastest-growing part of the industry
catering to Health Consciousness of People. There are Lower entry barriers due to presence of
highly distribution system for other Pepsi products.

PBL may focus on technological advancement & utilization of Internet promotion such as
banner, ads and keywords can increase their sales, and more computerized Manufacturing and
ordering processes can increase their efficiency.

iv. THREATS:

Fake beverages by the name of Pepsi are being supplied by unknown people. Such activities
really hamper the company’s name and its brand originality. Above all the fake beverages
supplied are almost similar to the taste of the original Pepsi Cola. brand and not everyone can
decipher the difference between the original and the fake product. This is in fact a great threat to
Pepsi Cola. for unworthy people is taking advantage of its brand name and spoiling its good
name in the market

The greatest affect is on the revenue from the rural areas where mango drinks take over.
However this is one factor that PBLcannot do anything about for it is not in their hands. If the
mango season is to come then it will and nothing can be done about it.

The main competitor of the company is the Coca Cola. At the international level, Pepsi Cola.
has a very strong competition with Coke. Coke has started its advertisements more effectively
to increase their demand and it is a very strong threat for Pepsi. Cola drinks are not good for the
health so the awareness level of the people is increasing which is a big threat to the company.

INTERNAL FACTOR ANALYSIS

INTERNAL FACTOR ANALYSIS SUMMARY (IFE)
Strength: WEIGHT RATE WEIGHTED SCORE

Strong Multinational (Brand Equity) 0.11 4 0.44

Strong & Vast Distribution Channels 0.12 5 0.6
Lack Of Capital Constraints 0.05 4 0.2
Record Market Share 0.12 5 0.6
Strong Brand Portfolio 0.07 4 0.28

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 Aggressiveness In The Market (Market Leader) 0.08 4 0.32
Brand Promotion & Sponsorship 0.12 5 0.6

WEAKNESS:
Targeting Only Young Customers 0.07 3 0.21
Political Franchises 0.05 3 0.15
Centralized Decision Making 0.05 3 0.15
Decline In Taste 0.06 2 0.12
Motivational Factor 0.05 3 0.15
Not All Products Bear The Company Name 0.05 2 0.1
TOTAL 1 3.92

Firm’s current strategies response to the factor: How well firm’s response to these factors
(Effectiveness of the firm).
 Poor Response 1
 Good Response 2
 Average Response 3
 Above Average Response 4
 Outstanding Response 5

Result:
 Above Average Response 3.92 (Aggressive)

EXTERNAL FACTOR ANALYSIS

EXTERNAL FACTOR ANALYSIS SUMMARY (EFE)
WEIGHTED
OPPORTUNITY: WEIGHT RATE
SCORE
PBLNew Products Can Easily Penetrate In The Market. 0.09 5 0.45
Noncarbonated Drinks Are The Fastest-Growing Industry 0.11 3 0.33
Demand Of Pepsi Is More Than Of Competitor 0.1 5 0.5
Changing Social Trends (Fast Foods) 0.09 4 0.36
Internet Promotion And Ordering Processes 0.05 2 0.1
May Tie Up or Liaison With Major Showrooms, Computer Centers &Restaurant 0.06 2 0.12

THREATS:
Non-Carbonated Substitutes (The Mango Season) 0.11 4 0.44

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Beverage Industry Is Mature 0.1 5 0.5
Fake Products (Imitators) 0.09 3 0.27
Competitor’s Schemes 0.06 3 0.18
Strong Competition With Coca-Cola Company 0.14 4 0.56
TOTAL 1 3.81

Firm’s current strategies response to the factor: How well firms response to these factors
(Effectiveness of the firm).
 Poor Response 1
 Good Response 2
 Average Response 3
 Above Average Response 4
 Outstanding Response 5

Result:
 Above Average Response 3.81 (Aggressive)

III. SWOT KEYS POINTS:

i. STRENGTHS:
 Strong Multinational (Brand Equity)
 Strong & Vast Distribution Channels
 Lack Of Capital Constraints
 Record Market Share
 Strong Brand Portfolio
 Aggressiveness In The Market (Market Leader)
 Brand Promotion & Sponsorship

ii. WEAKNESS:
 Targeting Only Young Customers
 Political Franchises
 Centralized Decision Making
 Decline In Taste
 Not All Products Bear The Company Name

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iii. OPPORTUNITY:
 PBL New Products Can Easily Penetrate In The Market.
 Noncarbonated Drinks Are The Fastest-Growing Industry
 Demand Of Pepsi Is More Than Of Competitor
 Changing Social Trends (Fast Foods)
 Internet Promotion And Ordering Processes
 May Tie Up or Liaison With Major Showrooms, Computer Centers &Restaurant

iv. THREATS:
 Non-Carbonated Substitutes (The Mango Season)
 Beverage Industry Is Mature
 Fake Products (Imitators)
 Competitor’s Schemes
 Strong Competition With Coca-Cola Company

IV. Globalization

Since Pepsi is an international brand, it is spread throughout the world, the formula and
ingredients and the making of the drink is same, it cannot be changed, it’s followed the same
everywhere to maintain the standard of this beverage. Pepsi has a lot of awareness, the reason
why no one who owns the manufacturing of Pepsi in their country can change the formula. And
this globalization of Pepsi does not affect the sales in our country. If we look at how Pepsi has
been marketed in foreign countries we can learn a way or two and implement on it, we take
advantage of their marketing strategy and act it on our local business. Awareness is the only
way our firm benefited from going global, people around the world are aware of it.

V. Ethics & CSR

The stakeholders of the company are satisfied with how the company is working. Considering
customers, they’re satisfied with the availability of the product and the taste, employees are
satisfied with their salary and how they are treated in the firm, general public is satisfied
because this firm has never done anything to disturb the general people. Although we have
faced a few ethical issues internally in the firm and sometimes externally by the government too,
but we mostly manage to take care of them so it doesn’t affect the firm.

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 VI. Mission, Vision, Values and Goals

The company’s slogan is ‘It’s time to chill again’

Mission Statement: "To be the world's premier consumer Products Company focused on
convenient foods and beverages. We seek to produce healthy financial rewards to investors as
we provide opportunities for growth and enrichment to our employees, our business partners
and the communities in which we operate. And in everything we do, we strive for honesty,
fairness and integrity."

Vision Statement: "To be the world's best beverage company". Being the best means providing
outstanding quality, service, cleanliness and value, so that their every customer is contented
and happy with their products."

"To increase the value of their shareholder's investment through sales growth, cost control and
wise investment of resources."

Values:

 Integrity
 Leadership to Sustain
 Honesty & Candor
 Passion To Win
 Ownership
 Trust

Goals:

The goals of the company is to help the company position for long term sustainable growth.
They aim to deliver top tier financial performance. And to have our people have a healthy
relationship between people and food. And to achieve the targets they set for every month using
bold new strategies.

VII. Planning And Strategy

Long term strategy for any business is obviously that we are in cash form. For that we
have marketing equations like before Pepsi was in 1 litre now it’s in 2.5 litre. See, cocacola
has in 1.75 litre from the beginning, if we talk about bulk bottles. So, the point of selling 1
liters and 350 ml was that on the same price we were selling more bottles. So, you and I
are in an environment where we are price conscious, we can compromise on price. So, we
adopted this psychic of people that we will sell more water in terms of financials.

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Then when slowly our targets were being met, we crossed our break even, we hit profit
sharing, and then we brought our product again to 1 liters and 350 ml. So, now we are
competing with the market.

Pepsi was working on the optimal portfolio in its starting year, as it provided a 2.5 litre
bottle to have the competitive edge over its competitor. It got there because it started its
operations late, and Coca cola was already the Market leader at that time.

Pepsi being a venture of a very successful brand of Soft drink namely PBL, targeted the
people belonging to 20-30 years, moreover it created additional value by creating an eco-
friendly advertisement during the time of its launch. To acquire the Market Share it had to
lower its profitability.

As for the conclusion, research says that at the time of its initial production it had to face a
lot of legal problems upon the bottle design an all, plus Coca cola was the market leader
as well, to acquire the market share they had to reduce their profitability for a short period
of time to survive in the long-term period.

The objective of every supply chain should be to maximize the overall value generated. The
value of a supply chain generates is the difference between what the final product is worth to
the customer and the costs the supply chain incurs in filling the customer’s request.

VIII. Supply Chain Strategy and Design

During this phase a company decides how to structure the supply chain over the next several
years. The company makes long term decisions in regards to location and capacities
of production and warehousing facilities, the products to be manufactured or stored at various
locations, the modes of transportation to be made, and information systems and so on. The
supply chain design is very expensive to alter on short notice and supports the company’s
strategic objectives. In order to ensure a good supply chain strategy Pepsi Co plans two years
in advance. It has several contracts with manufacturers, and receives raw material on a
convenient basis. The company also decides where production plants are to be placed. The
company has to provide and manage transport for the delivery of products as well as the
arrangement of third party services for the procurement of products..Material planning and
sourcing is carried out as well. Sources of supply of raw material both local and foreign are
identified and terms and conditions are negotiated. The supplier is audited by the most cost
efficient quality control department. Distributors are also decided by the company, Keeping in
mind past performance. The company has increased its distribution capacity from one to six
filling lines during the last few years lending its competitive edge over Coca Cola.

i. Supply Chain Planning

The goal of planning is to maximize the supply chain surplus. Planning establishes parameters
within which a supply chain will function over a period of time. Companies start the planning

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phase with a forecast for the coming year of demand. Pepsi carries out sales forecasting for
local demand as well as for export purposes to countries such as Afghanistan. The annual sales
target is conveyed to the supply chain department. Planning is carried out on a monthly, weekly
and daily basis

ii. Supply Chain Operation

Company makes decision regarding individual customer orders. The goal of supply chainoperati
ons is to handle incoming customer orders in the best possible manner. During this phase, firms
allocate inventory or production to individual orders, set a date that an order is to be filled,
generate pick lists at a warehouse, allocate to shipping, set delivery and so on. There is less
uncertainty about demand. In Pepsi the production, sales and supply chain departments get-
together to decide the inventory usually on a monthly, Weekly and daily basis.

iii. Process views of a supply chain

The processes in a supply chain are divided into a series of cycles each performed at the
interface between two successive stages of a supply chain.

iv. Cycle View of Supply Chain

There are five stages in a supply chain

 Supplier
 Manufacturer
 Distributor
 Retailer
 Customer

v. Four supply chain process cycles

 Customer order
 Replenishment
 Manufacturing,
 Procurement cycle

vi. Push/Pull View of Supply Chain

With push process execution is initiated in anticipation to a customer order. Pepsi has a
seasonal demand. Just in time concept is applicable in non-seasonal period and not applicable
in seasonal period. All processes that are part of the procurement cycle, manufacturing cycle,
replenishment cycle, and customer order cycle are push processes. Pepsi Sales order and

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processing: The Shipping Manager receives sales order from Sales Team, distributors through
telephone, fax & email one day before dispatch. The sales are made to base distributors on
advance payment against orders then shipping manager plans according to the
demand of distributors on daily basis.

vii. Supply Chain Strategy

Step 1
The Customer and Supply Chain Uncertainty

Identifying customer needs

Pepsi co needs to understand the customer needs for each targeted segment and the
uncertainty the supply chain faces in satisfying these needs. Pepsi is considered as a
drink which is refreshing during summer, and taken regularly during winter, with
demand hiking around festivals such as Eid and occasions such as weddings. As
demand for beverages is seasonal, the quantity of product needed for each lot is taken
care of with past demand in mind. Consumer’s generally require a small response time,
high service level, reasonable price and some variety (for example health conscious people
favor diet versions of sodas).

Demand uncertainty and Implied Demand Uncertainty

Demand for Pepsi varies by product. For example there is a greater demand for “Pepsi” as
compared to “Mirinda ” Hence, Pepsi has a low demand uncertainty as compared to “Mirinda ”
The product “Pepsi” is approaching its maturity stage in the PLC .Pepsi’s implied demand
uncertainty varies with the product type as well as the customer needs. Due to decreased
lead time (the customer may purchase its competitor’s product if Pepsi is not available at that
time), need for greater variety and higher level of service, implied demand uncertainty
increases. This is true for cities where unmet demand by Pepsi is met by Coca Cola, Amrat
Cola and other such competitors. Supply uncertainty is also affected by new products New
products have higher supply uncertainty.

Uncertainty for the capability of the supply chain

After determining the demand uncertainty it is important to take a look at the uncertainty
resulting from the supply chain. “Pepsi” is not a new product and its market is going towards
maturation. The company does not have many difficulties in delivering a product and has affixed
delivery schedule (on daily basis).
“Pepsi” hence has a predictable supply and some what uncertain demand depending on market
conditions.

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Step 2

Understanding the Supply Chain Capabilities

The efficiency and responsiveness varies according to the consumer needs, implied demand
uncertainty, product type and market segments. In remote areas company focuses on the
company being somewhat efficient as other modes of transportation could turn the product
to be highly expensive.
According to the company it does not deal with distributors who do not have 20 to 25vehicles,
therefore as the company has focus on cost reduction, uses slow and inexpensive modes of
transportation, the demand is certain, and uses economies of scale in production, the product
Pepsi is more inclined towards being somewhat efficient. In cities, the company focuses its
attention on being highly responsive as Pepsi has to meet short lead time, meet a high service
level, handle a large variety of products and respond to wide ranges of quantity demanded
especially at the retail stage.

Step 3

Achieving the Strategic Fit

Making one stage more responsive allows the other stage to focus on being more efficient. The
Pepsi supply chain assign different roles to its different stages, the company has to decide
either to transfer the responsiveness to the manufacture stage or to the retailer stage. While
discussing the Pepsi’s supply capability it is seen that Pepsi tends to be more responsive in the
cities and a bit less in towns.
Therefore, transferring the responsiveness to the retailer and distributor,allowing
them to face the higher implied demand uncertainty.This in return allows the manufacturer and
supplier to be more efficient. At the same time, multiple beverage types contribute to a broader
product portfolio causing Haidri to adjust its strategies accordingly; tailoring the supply chain to
best meet the needs of each beverage demand.

IX. Structure

Pepsi focuses upon four things in its organizational Structure namely:

 Functional
 Divisional
 Matrix
 Project Organization

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The structure matches the strategy of the enterprise for instance divisional structure keeps the
production of soft drink away from the production of bottled water, functional focuses upon how
is it functioning is it working as per the requirement and demand or not.
As per the decision-making ability the rights are given to the managers of the respective
departments as well, the span is just right as the CEO does not interfere in day to day matters.
All of the decisions related to the Production are taken place in the Production Unit itself,
whereas the corporate planning and rest of the decisions are taken place in the head office.

X. Control

The top administrators utilize similar strategies to control an association which all supervisors
utilize; they have a set objectives and an arrangement to accomplish them, they sort out and
deal with their assets, including individuals. They abstain from going for broke and if such an
open door shows up, they look for endorsement from higher ups. Issues are taken to divisions
that are straightforwardly identified with it. They know and speak with their workers and
comprehend what is going on in their specialization.

The company uses the proper planning and control strategy for efficient production of the
product. These control methods make sense keeping in mind the competitor, target market and
profitability and as per their flat hierarchy it is an essential part of their organization.

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 XI. Culture

Pepsi company values high productivity and treats their employees with full respect and dignity
from bottom level because they consider everyone is equal in the company and equally import
in bringing the company at the top level. Other than that the company values its customs and
traditions which are inherited from its fellow organization the Aquafina which implements its
rules and regulation in form of the product that is available to its customer should be similar
throughout the world and Pepsi in Karachi also values this and try to live up to the standards
and consider this as their cultural values in the company with state of the art technology and
work environment.

The HR department of the Karachi based Pepsi company reports that people this area do
complaint about the taste of Pepsi to be a little sweeter as compared to its competitor Coca cola
bottled drink but because the company values its tradition they cannot amend the formula for
the soft drink they produce because it is the standard and cannot be changed and thus it can be
said that the company Pepsi does value its espoused culture that it portrays.

XII. Employees

The organizational structure of Pepsi is based on a vertically integrated hierarchy which is

functional and matrix based where the CEO of the company have 70% of the power of decision
making. This system of structure is working very purposefully for the organization but there is
always a room for improvement according to the HR manager of the organization. But the CEO
of the Pepsi is very approachable and humble with every employee that sets an example and
leads everyone working under the CEO by example which in return helps to organize people
into cohesive and trustworthy teams.

XIII. Change

The employees are treated with respect and dignity in Pepsi organization by the CEO who leads
by example and treat everyone similarly even if it’s a low level worker or some manager so
employees are loyal to this organization. Similarly and because in this region the demand for
cold bottle drink is ever high because of the weather conditions so it is safe to say that in the
next five years the company will have a sufficient supply of staff in all the various job groups
over the next five years.

At Pepsi the workforce is very diverse in a sense that it has every kind of employees starting
from the suppliers who work majorly at a mechanical level for example loading the bottles to
supply truck and delivering the product around the city but as you move further up the hierarchy
you can see the diversity of the employees as they become more technical for example the HR
manager sits in his cabin with a laptop and there are many departments like IT department and
Sales department and HR department etc.

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Pepsi is affiliated with Aquafina as its fellow company and because Aquafina itself is a huge
brand and its employer brand is very strong so Pepsi gets this from Aquafina and it can be said
that the employer brand is as strong as Aquafina so if I was hired in this company there would
be no need for recommendation for strengthening this companies image as an employer.

Pepsi has its own standards and the production staff has a recognized training standards they
have to complete every year for example ISO training standard which employees have to take
every year but the remaining staff for example HR, IT and admin etc are left out and they get
trained twice or thrice a year.

XIV. Supporting Employees and Performance Goals

The Pepsi organization puts a lot of efforts from the ground up to make their employees feel like
they belong and own the organization because they believe that it is utterly important that
employee and employer relation should be based on trust and trust only from the ground level
so that the organization can prosper. An example of this could be seen when the CEO of the
company was seen meeting with the peons and the higher staff in the same friendly way after
the Zuhr prayer out the mosque and no discrimination was visible which in our opinion sends a
message to every employee to treat everyone with respect and dignity and humbleness so that
a healthy and productive environment can be forced on the workforce for maximum productivity.

Performance goals for the production or service jobs are assigned in a way that the production
is not compromised and the standard with the fellow company of Pepsi the Aquafina sets for the
global level are met at the highest level other than that the production performance goals are to
produce enough supply in time with minimum cost and 100 percent efficiency of energy and
budget. On the other size the sales and support staff also are assigned performance goals
which include but limit to ensuring the availability of the product throughout the region and that
the product Pepsi bottles are chilled and visibly available to its customers and its not hard to
reach because there are many water bottle brands and the once which is available will be
successful.

In the Pepsi organization the most emphases are placed on performance and competencies
with the other competing soft drink provider and also competencies internally so that everyone
thrive to be better than their counter parts. Also to some extend seniority is also emphasized in
the company of Pepsi where senior members of the staff have more say in the decision making.
On the contrary job status is very least emphasized in this organization because it was visible
clear that every employee was treated with the same dignity and respect regardless of their
position.

The company Pepsi of the region Karachi and its surroundings which has the fellow company
Aquafina has an empowered workforce that can make their own decisions if required but a lot of
emphases is placed on the decision of their seniors which makes them empowered. This was
visibly clear when we visited the organization and some of this culture came inherited from the
fellow company of Pepsi the Aquafina because how it sets its rules and regulations. So in
conclusion yes this organization has a empowered workforce because what the company
values the most is productivity and recognize that by empowering the workforce and to
encourage employees will help the organization grow even further.

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 XV. Achievements and Workplace

Pepsi in Karachi won several world recognized awards in the recent years and some of them
were so that no other company in Pakistan has ever been achieved such awards. The awards
include the Global award, Tetra pack award and many other awards.

The company can build more loyal workforce by making sure that the employee feels that they
belongs to the company and own the work he does and indeed it was visible when we visited
the organization that the employee were working hard and from the top level of CEO an
example was set that everyone was treated with the same respect and dignity so that the
employee feel that he is working for a better cause and works hard.

The organization of Pepsi is generally low level work place but it depends on the conditions and
the kind of job the person is doing. For example if the employees job is to make sure that the
product is ready for departure and it’s his responsibility and the product is not yet ready the
person will naturally be stressed and so is true for every other organization but in the company
of Pepsi the employees are highly encouraged to not panic and everyone is provided with
breaks for prayer and lunch and also the employees are giving leaves to lower their stress level.

XVI. Power and Politics

In this organization of Pepsi and every other organization for that matter the power of the chief
executed as stated by the HR manager of Pepsi comes from the trust of the CEO on his
employees. If his employees are giving him the right information on the right time and the
employee trust his CEO and the relationship is based on trust then the CEO is indeed powerful.

Pepsi company the has a fellow organization which has his own CEO and many other positions
higher than the CEO of Pepsi and that does limit his power when it comes to a decision making
which involves the higher people.

The organization of Pepsi has regular promotions and every department has its regular
promotions and hardworking employees are regularly promoted to make decisions for their own
departments which indeed accumulate power and influence and impact the goals and strategies
and actions and operations of the organization.

In the organization of Pepsi there used to be a lot of influence of politics in the hiring process
and people affiliated to political parties or other group of government organization used to
inforce the organization to hire their relatives or people they know. This matter was resolved by
giving advertising in the newspaper without the name of the company but something like ‘a big
company’ rather than ‘Pakistan beverages’ so that no one knows that Pepsi is hiring.

Pepsi Company has a lot of CSR activities which involves negotiation with the government or
the area authorities for example Pepsi has a solar street light deal with the with the area
authorities of Garden and the certain amount of money goes to the authorities from the side of
Pepsi.

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XVII. Communication and Resources

The strategy of a company such as Pepsi is communicated while developing it by buying in from
different functional manager and involving them into the strategy making process this is very
effective way of communicating a strategy is most of the strategy is based on inputs from the
functional managers and therefore they own the responsibility of working on it. The CEO and
the people within the company and with the shareholders use email as the main media of
communication. Company uses SAP for its resource and functional management and planning.
given the cost, complexity and the dynamics of SAP I would place it in upper middle part of S
curve. Demographics of employees, ability to learn and adapt and willingness to change are
major inertia forces for Pepsi it should be relatively easier to change and adapt to the paradigm
shifts as the organization is driven by participative and transformational leadership styles. This
means all that would be required is to bring the people responsible for the shift together for
multiple sessions to discuss the paradigm shifts. Varying inputs from different people would help
understand the business model and to undo the paradigm shift.

XVIII. Conclusion

Pepsi is a well renowned company and it has maintained its position well by
understanding the client psychology, by ensuring quality, by introducing ingenuity in
products, by enlarging its product base, by keeping economic factors in view and by
intense and jazzy advertisements.

Whenever and where ever there is a spotlight event, Pepsi must figure in, like the one
day international cricket matches between India and Pakistan many other such
occasions. The key word for success in the Marketing World is to "remain in the
spotlight" and that is what Pepsi is doing.

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XIX. References

http://pakbev.com/ Pakistan Beverage Ltd Official Website

http://www.pepsico.com/ Pepsi Official Website

http://suntorypepsico.vn/en Sunstory Pepsi

https://en.wikipedia.org/wiki/PepsiCo Wikipedia Pepsi

https://propakistani.pk/2009/12/17/pakistan-beverages-limited-inks-technology-agreement-with-sap/
Article on technology agreement with sap

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