PAÑÑĀSĀTRA UNIVERSITY Management a pacific rim focus 6e

ព្រះរាជាណាចព្ររម្ពជា
ុ
ជាតិ សាសនា ព្រះម្ហារ្សព្ត

សារលវិទ្ា
្ ល័យបញ្ញសា
្ ស្រសរ
ត ម្ពជា
ុ

PAÑÑĀSĀTRA UNIVERSITY OF CAMBODIA

Subject: Management a pacific rim focus 6e

Presentation:
Pepsi-Cola

Professor: Chheang Pheakdey

Group: 2

Ungkeodavuto 2224693
Sam ath Ritheary 2119432
Suon Davasona 2224152

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Contents

I. Preface
II. Background
III. Vision, Mission, Goal
3.1 Vision
3.2 Mission
3.3 Goal
IV. External Environment
4.1 Customer
4.2 Supplier
4.3 Competitors
4.4 Government Agency.
V. Cooperate and Social Responsibilities
5.1 Employee: How the company care and protect
about their employee.
5.2 Customer: How the company care and protect
the customer.
5.3 Society: How the company care and protect the
Society.
VI. Organizational structure/Chart
5.1 Chart
VII. SWOT Analysis

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7.1 Strenge
7.2 Weakness
7.3 Opportunity
7.4 Threat
VIII. Recommendations
IX. Conclusions
X. Final Project Reflection

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I. PREFACE

This major assignment was assigned by professor Chheng Pheakdey, Lecturer of

Management Principle, to improve students’ active knowledge. This major
assignment is the achievement by Ung Keodavuto, Sam ath Ritheary, and Soun
Davasona. It is also created in a very careful manner with a number of purposes. It
is remaining as a good example to students for the next generations. This research
assignment will play an important referent for other students or researchers who
want to know about The Management. It is also proving hardship in our studies so
far. We welcome all comments on the next, particularly if you feel this could be
better achieved. Therefore, all learners, students, every individual and who is
interested in learning and developing their studies and knowledge will find this
research assignment useful.

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II. Company Background

epsiCo, Inc., American food and

P beverage company that is one of the

largest in the world, with products
available in more than 200 countries. It
took its name in 1965 when the Pepsi-Cola
Company merged with Frito-Lay, Inc. The
company’s headquarters are in Purchase, New
York.
The first Pepsi-Cola was created by Caleb D.
Bradham (1866–1934), a pharmacist in New Bern, North
Carolina. Hoping to duplicate the recent success of Coca-
Cola, Bradham named his sweet cola-flavored
carbonated beverage Pepsi-Cola in 1898. The drink
proved so popular that in 1902 Bradham incorporated the
Pepsi-Cola Company. After many years of moderate
prosperity, the company fell on hard times after World War I and was reorganized
and reincorporated on several occasions in the 1920s.
In 1931 the company’s trademark and assets were
picked up by Charles G. Guth (1876–1948), founder of
the modern Pepsi-Cola. He established a new Pepsi-
Cola Company, had a chemist formulate a better drink,
set up new bottling operations, and began
merchandising a hugely successful 12-ounce bottle for
five cents. Guth was also president of Loft,
Incorporated, a candy manufacturer and soda-fountain chain (founded 1919), and

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in legal battles in 1936–39 he lost a controlling interest in the Pepsi-Cola Company

to the new management of Loft. When in 1941 the Pepsi-Cola Company was
merged into Loft, the name Loft, Inc., was changed to Pepsi-Cola Company.
In 1950 Alfred N. Steele (1901–59), a former vice president of Coca-Cola
Company, became chief executive officer. His emphasis on giant advertising
campaigns and sales promotions increased Pepsi-Cola’s net earnings 11-fold
during the 1950s and made it the chief competitor of Coca-Cola. (After Steele’s
death, his wife, actress Joan Crawford, became an active director of the company.)
In 1965 Pepsi-Cola merged with Frito-Lay, Inc., the maker of snack foods such as
Fritos, Doritos, Lay’s potato chips, and Rold Gold pretzels. The newly enlarged
company diversified further with the purchase of three restaurant chains—Pizza
Hut, Inc. (1977), Taco Bell Inc. (1978), and Kentucky Fried Chicken Corp. (1986;
now called KFC)—and Seven-Up International (1986), but in 1997 the restaurant
chains were spun off into a new, separate company called Tricon Global
Restaurants, Inc. Looking to add more products that were considered healthier,
PepsiCo acquired the Tropicana and Dole juice brands from the Seagram
Company in 1998, and in 2001 it merged with the Quaker Oats company to form a
new division, Quaker Foods and Beverages. With the merger, PepsiCo’s popular
brands included Pepsi cola, Frito-Lay snack products, Lipton Tea, Tropicana
juices, Gatorade sports drinks, Quaker Oats cereals, and Rold Gold pretzels.
In the early 21st century, PepsiCo focused on expanding its operations in
other countries, notably Russia, which was its second largest market. In 2008 it
bought a controlling interest in JSC Lebedyansky, Russia’s largest juice
manufacturer, and three years later it completed its acquisition of Wimm-Bill-Dann
Foods. Those investments helped make PepsiCo the largest food and beverage
company in Russia.

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III. Vision, Mission, Goal

3.1 Vision

The company's vision

statement is defined
through its important
goals, objectives, and
purpose in the long run.
PepsiCo formulates its
vision statement while
aiming to provide quality
financial performance
over a significantly vast range of time. It also targets to incorporate sustainability
into its business processes, policies, and strategies to solidify its mark in the
community and at the same time impart a positive contribution to the environment.
To advance this vision, the company plans on becoming FASTER, STRONGER,
and BETTER.

Become global leader in convenient foods and beverages

The organization believes that the food industry is an ever-going industry as long
as humans are alive. Hence, investments in the development of the industry keep
the organization at the forefront. A key to long term success.

Winning with purpose

The company believes that winning with purpose translates to giving the best
performance to execute your goal and purpose. PepsiCo believes that its past
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success is a mirror of its ambition, which has lead to the growth of the company.
The vision is to keep this ambition alive so that the company is propelled into new
heights of success internationally.

Faster

PepsiCo plans on becoming more faster in business by focusing on customers and

increasing investment for growth and market share.

Stronger

The company plans on becoming stronger by building on its capabilities and

enhancing its company culture. PepsiCo plans on developing its core capabilities
that will better facilitate customer needs, hence strengthening the brand.

Better

The organization plans on becoming better by integrating their vision into

their business strategy. Furthermore, PepsiCo plans to give back to society and the
people so that they can successfully create an everlasting impact of the company
on the Planet.

3.2 Mission
Pepsi’s mission statement is as
follows: “Creating more smiles with
every sip and every bite.” PepsiCo
has divided its mission statement into
five categories:

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For consumer

The company plans on creating smiles for its customers, which are estimated to be
about one billion a day by providing them with delicious and unique products.

For customers

PepsiCo tries to bring smiles for its customers by being the best business partner.
Delivering products of unique and premium quality, which not only benefits the
company but also benefits the business enterprise the customers who buy PepsiCo
products in bulks.

For acquaintances and society

The organization brings smiles for its acquaintances and society by creating job
opportunities. Also, giving people chances to learn valuable skills, which will help
them build successful careers.

PepsiCo all promotes diversity by making its workplace inclusive to everyone.

Through such steps, the organization tries to give back to society by making the
lives of the people living in it better.

For Shareholders

PepsiCo brings smiles for its shareholders by delivering suitable Total Shareholder
Return (TSR) and also running the business based on best corporate and ethical
governance.

For the world

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The Company brings smiles to the world by playing its part in protecting the non-
renewable resources and helping to conserve the eco-system so that it is more
sustainable for the generation to come.

3.3 Goal
Through our new Products goal,
we will continue to refine our
food and beverage choices to
meet changing consumer needs
by reducing added sugars,
saturated fat and salt, by developing a broader portfolio of product choices, and by
reaching more underserved communities and consumers.

PepsiCo’s values are the reflection of their stand on social and environmental
issues, and what the company wants to be known for. The statement that sheds
light on the values of the company is as follows “PepsiCo is committed to
delivering sustained growth through empowered people acting responsibly and
building trust.”

Sustained Growth

PepsiCo expects its employees to have a vision of sustained growth. It’s a skill
that harnesses other skills such as innovation, ambition, and determination.

PepsiCo believes that one of the critical keys to long term success is to have a
long-term plan. And the employees must have the vision and value of sustained
growth, not just for themselves but for the company as well.

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Responsibility and Trust

PepsiCo expects its employees to be responsible and trustworthy. The company

believes that these two core values are of the utmost importance leading to the
growth of the company.

All employees are expected to execute all activities responsibly, keeping in mind
the company policy and general rules and regulations. It builds the company’s trust
in them.

Empowered People

PepsiCo is an organization that believes in giving freedom and autonomy to its

employees, given that they work within the organization’s governance.

In order to survive at PepsiCo, employee empowerment is a critical skill. The

company values people who can get the job done correctly with minimum
guidance.

IV. External Environment

4.1 Customer

The target market Pepsi appeals to is teens, young adults and early middle-age adult
consumers in the US and worldwide.

4.2 Supplier

The principal ingredients we use in our food and beverage businesses are apple,
orange and pineapple juice and other juice concentrates, aspartame, corn, corn

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sweeteners, flavorings, flour, grapefruit and other fruits, oats, oranges, potatoes,
raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and
wheat. Our key packaging materials include plastic resins, including polyethylene
terephthalate (PET) and polypropylene resins used for plastic beverage bottles and
film packaging used for snack foods, aluminum used for cans, glass bottles,
closures, cardboard and paperboard cartons. Fuel and natural gas are also important
commodities for us due to their use in our facilities and in the trucks delivering our
products.

We employ specialists to secure adequate supplies of many of these items and have
not experienced any significant continuous shortages. Many of these ingredients,
raw materials and commodities are purchased in the open market. The prices we
pay for such items are subject to fluctuation, and we manage this risk through the
use of fixed-price contracts and purchase orders, pricing agreements and
derivatives. In addition, risk to our supply of certain raw materials is mitigated
through purchases from multiple geographies and suppliers. When prices increase,
we may or may not pass on such increases to our customers. See Note 10 to our
consolidated financial statements for additional information on how we manage
our exposure to commodity costs.

4.3 Competitors
PepsiCo's competitors and similar companies include
Britvic,
The Coca-Cola Company
Conagra Brands
Kellogg
Danone
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Red Bull
Mondelez International
Monster Beverage
Nestle and Keurig Dr Pepper

4.4 Government Agency

PepsiCo's tax department maintains regular communication with various
government tax agencies and is responsible for ensuring compliance with
applicable tax laws and regulations. This includes maintaining accurate and
complete tax records, filing tax returns and making tax payments on time,
responding to tax audits and inquiries from government tax agencies, and
keeping up to date with changes in tax laws and regulations that may impact
the company's tax profile. The tax department would also work to minimize
risks and assess opportunities for reducing tax liabilities within the framework
of legal and ethical standards.
5 Cooperate and Social Responsibilities

As part of our pep+ (PepsiCo Positive) ambition, one way we’re striving to
develop a Positive Value Chain is by building a better workplace. To meet
this ambition, we’re working to drive engagement amongst our employees —
improving how they feel about their jobs, team and company direction.

Embedding authentic and shared company values is an important tool in

establishing a positively engaged workforce. PepsiCo's Global Talent
Management team is responsible for our employee engagement strategy and
leads efforts to establish core cultural values and opportunities for employees
to share feedback on their experience with the company.

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5.1 Employee: How the company care and protect about their employee.
PepsiCo considers its employees
to be the cornerstone of its
success, and the company is
committed to providing a safe and
inclusive workplace that values
diversity, equity, and inclusion.
Here are some of the ways that
PepsiCo companies care for and protect their employees:
1 Health and Safety: PepsiCo companies are committed to providing a safe
and healthy working environment for their employees. The company invests in
programs and initiatives to promote workplace health and safety, including
training, personal protective equipment, and safety protocols.
2 Employee Benefits: PepsiCo offers comprehensive employee benefits that
include healthcare, retirement savings plans, and paid time off. The company
strives to offer competitive benefit packages to help attract and retain top
talent.
3 Diversity and Inclusion: PepsiCo values diversity and inclusion and is
committed to creating a workplace that is welcoming and inclusive for all
employees. The company invests in programs and initiatives to promote
diversity and inclusion, including employee resource groups and training
programs.
4 Professional Development: PepsiCo is invested in the professional
development of its employees and offers a variety of training and development
programs designed to help employees grow and advance in their careers.

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5 Work-Life Balance: PepsiCo recognizes the importance of work-life

balance and offers flexible work arrangements to help employees balance their
work obligations with their personal commitments.

5.2 Customer: How the company care and protect the customer

PepsiCo takes great care to ensure the

satisfaction and safety of its customers.
Here are some of the ways that Pepsi
companies care for and protect their
customers:

1 Product Quality: PepsiCo companies are committed to providing high-

quality products to their customers. The company invests in quality control
programs and testing procedures to ensure that its products meet or exceed
customer expectations
2 Food Safety: PepsiCo takes food safety very seriously. The company follows
strict protocols and standards for food safety and quality assurance. This
includes regular testing and monitoring of its products, as well as compliance
with government regulations.
3 Customer Service: PepsiCo companies are committed to providing excellent
customer service. The company offers online and offline channels for
customers to communicate feedback and concerns about its products.

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4 Marketing and Advertising: PepsiCo is committed to responsible marketing

and advertising practices. The company ensures that its advertising is truthful
and accurate, and that it complies with applicable laws and regulations.
5 Sustainability: PepsiCo is committed to sustainability and reducing its
environmental footprint. The company focuses on sustainable packaging,
energy conservation, and responsible sourcing, among other initiatives. These
efforts are intended to improve the long-term viability of the company and
protect the interests of its customers.

5.3 Society: How the company care and protect the Society.

PepsiCo, as a global company, has

various initiatives and programs in
place to demonstrate its commitment
to caring for and protecting society.

1 Environmental Sustainability: PepsiCo has set ambitious goals to reduce its

environmental impact. They aim to reduce greenhouse gas emissions, improve
water efficiency, and minimize waste through initiatives like sustainable sourcing,
energy conservation, and recycling programs.
2 Water Stewardship: PepsiCo recognizes the importance of water conservation
and has implemented measures to protect water resources. They work to replenish
water in communities where they operate, promote water conservation practices,
and invest in water-efficient technologies.
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3 Community Engagement: PepsiCo engages with local communities through

various programs. They support education initiatives, provide disaster relief, and
contribute to community development projects. For example, their PepsiCo
Foundation invests in programs that address nutrition, water, and economic
empowerment in underserved communities.
4 Responsible Marketing: PepsiCo is committed to responsible marketing
practices, especially when it comes to advertising to children. They have
established guidelines to ensure that their marketing efforts promote healthy
lifestyles and responsible consumption.
5. Diversity and Inclusion: PepsiCo values diversity and inclusion within its
workforce and aims to create an inclusive environment for all employees. They
have initiatives to promote diversity, equality, and inclusion, including employee
resource groups and mentoring programs.
6 Product Innovation: PepsiCo continues to invest in research and development
to create healthier and more sustainable products. They have expanded their
portfolio to include healthier snack options, reduced sugar beverages, and
sustainable packaging solutions.

6 Organizational structure/Chart

PepsiCo is an adaptive organization, as they are continuously seeking constant improvement

and keeping new ideas in the marketplace while its products progress along their life cycles.
PepsiCo has a decentralized organizational structure, with operational decisions made within
the separate business units while being governed by policies at the corporate level.
PepsiCo consists of three units: PepsiCo Americas Foods, PepsiCo Americas Beverages and
PepsiCo International. PepsiCo Americas Foods encompasses Frito-Lay North America,
Quaker and all Latin American food and snack businesses. PepsiCo Americas Beverages
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oversees Pepsi-Cola North America, Gatorade, Tropicana, and all Latin-American beverage
businesses. PepsiCo International is responsible for PepsiCo business in Europe, Asia, and
Africa.

PepsiCo organizational structure can be described as divisional and it

integrates the following divisions:

7. SWOT Analysis

PepsiCo’s Strengths

1/ Best Global Brand

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According to Statista, PepsiCo is ranked the second most valuable soft drinks
brand with a brand value of $21 Billion. In 2022, PepsiCo was ranked the 86th
largest company in the world in Forbes’ Global 2000.

2/ Power of One Strategy

Selling “Food & Snacks” (Frito Lays, Cheetos, Doritos, Kurkure) and
“Beverages” (Pepsi, Gatorade, Tropicana) under one umbrella makes PepsiCo a
more robust and diversified business. Its food business accounted for 58%, and
beverages accounted for 42% of its revenue in 2022.

3/ Strong Global Presence

PepsiCo has exploited the benefits of a solid global presence by partaking in more
than 200 countries worldwide. PepsiCo’s overwhelming presence in markets
across the globe has enhanced global awareness and recognition of the brand
among consumers. One of the strengths that have enabled PepsiCo to go head-to-
head with competitors, such as Coca Cola is its global presence.

North America is Pepsi’s largest market and represents 60% of total revenue,
Europe being the second largest representing 16% of the revenue, and Lat Am,
AMESA, and APAC representing 10%, 8%, and 6% of revenue, respectively.

4/ Direct-Store-Delivery

PepsiCo uses direct store delivery (DSD) for its supply chain and distribution
network, which ensures that independent bottlers and distributors deliver

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beverages, snacks, and foods directly to retail stores. DSD ensures faster
restocking better in-store promotion and maximum visibility.

6/ Market Dominance

The marketplace favors superior and dominant businesses giving them room to
dictate terms. According to Information Resources, in 2022, Pepsi accounted
for 46.3%, and Coca-Cola accounted for 25.6% of the U.S. liquid refreshment
beverage category. It exploits its dominance to nurture favorable relationships with
retailers gaining significant and easily accessible shelf space.

7/ Effective Marketing Strategy

Pepsi understands the importance of marketing, evidenced by the fact that it has
been sponsoring the Super Bowl halftime show for ten years, reaching an audience
of 96.7 million people in 2021. In 2022, Pepsi Super Bowl LIV Halftime Show
featured renowned performers and drew 103.4 million viewers.

8/Iconic Youthful Brand

Pepsi’s target audience has always been the younger generation. Pepsi has nurtured
its image as an iconic youth brand. Historically, many iconic ads targeted pre-
teens/ teens with the fun element of sports, music, etc.
9/ Marketing through Sports

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Partnerships with sports clubs and organizations provide an invaluable opportunity

to advertise directly to consumers in sporting arenas.

For example, Pepsi entered into a 7-year championship level partnership with
the Tampa Bay Lightning and AMALIE Arena.

10/ Strong Corporate Social Responsibility

PepsiCo Foundation (philanthropic division) works with hundreds of international,

national, and community-based organizations to enhance resource sustainability and
tackle challenges facing societies across the world.

For example, PepsiCo has partnered with the Inter- American Development Bank
(IDB) in projects providing clean drinking water and improved sanitation in Latin
America.

Also, the food and beverage giant announced that it would invest $35
million, collaborating with Closed Loop Partners. The investment is part of
an innovative recycling initiative, introducing small-scale, sustainable, and high-
tech recycling systems in various communities in the US.

The recycling fund, named “Closed Loop Recycling Fund,” will be used to help
different areas of the country gain access to recycling, minimizing waste, and
introducing a new line of rPET (recycled plastic) as well as various other
sustainable materials as part of PepsiCo’s sustainable initiative.

11/ Customer Loyalty

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PepsiCo has a highly loyal customer base, particularly among the younger
generation who love the iconic taste of the company’s soft drinks.

Recently, Pepsi has launched a first-ever cash-back loyalty program “PepCoin” to

reward their loyal customers with cash prizes for pairing their favorite soft drink and
snack.

PepsiCo’s Weaknesses

1/ Overdependence on Food and Beverages

Over-dependency on carbonated soft drinks and packaged foods undermine

companies’ flexibility and agility in case of turmoil in that segment. PepsiCo
decided against the wise men by putting its eggs in one basket – food and
beverages. The company should diversify to avoid the possibility of losing
everything.

2/ Products Perceived as Unhealthy

Perception is everything when it comes to consumer products such as soft drinks

and snacks. Most of PepsiCo’s carbonated soft drinks contain high
sugar concentrates while its snacks are excessively salted with chemical additives
and flavors. This is a significant weakness, particularly in the current health-
conscious consumer markets.

3/ Effects of Failed Products

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Failure in any venture is a weakness. PepsiCo’s failed products, such as Crystal

Pepsi (Colorless Cola), Pepsi Blue, etc., demoralized employees and portrayed
them as incompetent in the public sphere giving room for the competition to grow.

4/ Controversial Advertisements

Companies must use their elevated position to advance society’s common good.
Unfortunately, in 2017, PepsiCo’s advert featuring Kendall Jenner was criticized
for trivializing the Black Lives Matter movement. The ad was pulled after one day.

The company released this statement:

“Pepsi was trying to project a global message of unity, peace, and understanding.
Clearly, we missed the mark, and we apologize. We did not intend to make light of
any serious issue. We are removing the content and halting any further rollout. We
also apologize for putting Kendall Jenner in this position.”
This is a major weakness compared to the positive values of life, such as family
get-togethers consistently advocated for in most of Coca-Cola’s advertisements.

5/ Poor Environmental Record

PepsiCo was named one of the world’s top three plastic polluters by Break Free from
Plastic. The company has failed to adopt meaningful measures to increase the
recycling of its bottles.

Additionally, Pepsi Lipton International has come under fire by the ASA
(Advertising Standards Authority). It is alleged that Pepsi Lipton used false

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advertising on their drink bottles claiming the bottles are “100% recycled plastic”.
The company stated that it had printed an asterisk right next to the “100%
recycled” claim, indicating that the label and the cap are not made from recycled
plastic. Pepsi Lipton International also agreed that the size of the text was very
small indeed, which misled a lot of consumers into thinking their bottles are fully
recycled plastic.

6/ Racially-Insensitive Products

The national debate over racial inequality in the US brought attention to PepsiCo’s
racially-insensitive products. The company was forced to change the name and
brand image of its Aunt Jemima after it was singled out as racist by Black Lives
Matter protesters. PepsiCo is also considering changing other products like Uncle
Ben’s.

PepsiCo’s Opportunities

1/ Product Diversification

Diversification into different segments enables businesses to exploit benefits

beyond their traditional field of operation and attain stability. Even though PepsiCo
has 23 brands under its portfolio, all these are concentrated within the food and
beverage industry. PepsiCo can exploit benefits in other segments by diversifying
its products portfolio into different sectors beyond food and beverages, such as
sportswear, acquiring a small but established sportswear brand.

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PepsiCo can also diversify its product portfolio to include alcoholic beverages. The
company recently announced that it was considering expanding into the alcoholic
market after Coca-Cola Co announced they would be introducing an alcoholic
drink in the US market in 2021.

2/ Expand E-Commerce

More customers are using digital channels for online shopping. PepsiCo can
exploit the benefits of online shopping by expanding its e-commerce (mobile apps)
and growing sales through these channels.

3/ Enhance Alliances and Partnerships

Businesses that seek and nurture solid alliances and partnerships in a globalized
marketplace are more successful. For example, PepsiCo can extend the
current partnership with Starbucks into other areas to harness all benefits of their
partner’s numerous coffee outlets.

4/ Increase Consumer-Driven R&D

Adapting to marketplace changes is the key to success. PepsiCo has the resources
to increase investment in research and development, manufacturing, and go-to-
market capabilities and attain an edge over competitors in the changing consumer
and retail landscapes. In FY2022, PepsiCo spent over $770 million on research and
development, with its R&D expenses ranging between $665 million and $760
million in the past ten years.

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5/ Expanding Operations in Emerging Markets

The rapid growth and improved economic situation in emerging markets in Africa,
Asia, and South America provide PepsiCo with an invaluable opportunity to
expand its operations and grow its customer base.

6/ Efforts towards Health-Conscious customers’ needs

PepsiCo has increased its focus on reducing sugar, salt and fat in 75% of its food
products by 2025 to less than 100 calories of added sugar per 12 ounces, 1.3
milligrams of sodium per calorie and less than 1.1 grams of saturated fat per 100
calories.

Pepsi also announced that it would partner with Beyond Meat to work on vegan
jerky. The collaboration is named the “PLANeT Partnership.” Collaborating with
PepsiCo, one of the largest food and drinks conglomerates in the world, will give
Beyond Meat a chance to use Pepsi’s world-class marketing strategies and
production power. On the other hand, this opportunity will pave the way for Pepsi
to diversify its product portfolio, venturing into new and healthier food products.

7/ Increase Healthy Options

The fact that most of the soft drinks and snacks offered by PepsiCo are considered
unhealthy implies that there is room for improvement. Only 44% of PepsiCo’s
beverage portfolio has under 100 calories per serving, which are high and
unhealthy. The company can exploit the opportunities presented by an increasing

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number of health-conscious consumers by broadening product lines to include

healthy options such as milk or vegetable-based shakes.

8/ Introduce New Flavors

Companies need to adapt to changes in consumer preferences and tastes by

ensuring consistent top-line growth. PepsiCo can introduce new flavors in the soft
drinks and snacks offered to the market and expand its customer base. The
company recently introduced new flavors, including Pepsi Café which combines
the flavorful taste of coffee with Pepsi Cola.

9/ Enhance Corporate Social Responsibility

Sentimental and emotional values influence consumers’ decisions. PepsiCo can

enhance its corporate social responsibility activities to enhance the sustainable use
of renewable resources and tackle issues affecting consumers directly,
strengthening loyalty while attracting new customers. It joined consumers and
other companies in condemning Facebook’s inaction against hate speech and
racism. PepsiCo pulled millions of ad dollars from Facebook as part of its CSR to
its customers.

PepsiCo’s Threats

1/ Stiff Competition

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PepsiCo’s profitability and market share are threatened by stiff

competition from Coca-Cola, Nestle, Dr. Peppers, Unilever, and so on. The
competition also threatens long-term sustainability and profitability by increasing
the cost of protecting market share through adverts, promotions, and discounts to
retain customers.

2/ Economic Slowdown or Recession

Even though food and beverage consumer markets are going strong, the possibility
of a slowdown or recession soon cannot be ruled out. In case of a downturn,
PepsiCo can incur losses because its product portfolio is concentrated with
products, which are usually among the first expenses to be dropped by consumers
during economic hardship.

3/ Competitors Adopt Technology More Effectively

In the current technologically advanced and highly competitive business arena, the
success or failure of businesses depends on the adoption rate of emerging
technologies. PepsiCo can lose competitive advantage if they adopt game-changing
technologies more effectively.

4/ Changes in Demographics

Changes in demographics and economic situation transforms target markets, which

can impact businesses negatively. For example, the demographics of Nordic
nations such as Sweden (median age 41.1 years) have shifted with an increase in
older consumers and a decreased number of youths. These changes can threaten
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PepsiCo’s profitability and sustainability because a large portion of its customer

base consists of youth.

5/ Increase in Trade Tensions

Uncertainty and instability impede effective operations. In the past two years, US-
China trade tensions have increased uncertainty and instability in global markets.
PepsiCo’s international operations can be undermined if trade tensions escalate,
leading to a trade war, isolationism, and protectionism in the company’s overseas
markets.

Additionally, The UKG payroll company came under a ransomware attack earlier
this month. Ultimate Kronos Group is a top-tier workforce and HR resource
management company. Large organizations like PepsiCo and Tesla employ their
timekeeping and payroll services. The UKG ransomware attack resulted
in inaccurate and delayed employee paychecks, which led to an outrage. One
worker at PepsiCo filed a lawsuit against Pepsi.

6/ Government Laws and Regulations

In the recent past, governments have increasingly adopted pro-health regulations to

reduce lifestyle diseases and illnesses attributed to junk and unhealthy products.
Escalation of this trend in the future can undermine profitability, sustainability, and
even the existence of PepsiCo since its product portfolio consists mainly of
unhealthy soft drinks and snacks.

7/ Increasing Health Consciousness

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The fact that most of the soft drinks and snacks offered by PepsiCo are considered
as unhealthy implies that increasing health consciousness in consumer markets is a
threat (Cannibalism) to the company.

8. Recommendations

Despite the success that Pepsi has been able to attain, there are several challenges
faced in the talent management system which are developed and implemented
successfully. There is an evident effectiveness of PepsiCo leadership, a lack of
clarity on CEO succession plan can be specified as a noteworthy issue.
Specifically, a number of reputable members of senior management team and
rising starts have been leaving PepsiCo recently. In essence, the talent
management process has been based on the tools and outlined action
plans that clearly create pressure on the company's employees and thus in a way
failing to give their employees self-satisfaction and time. More so, the feedback
process and the talent acquisition process may leave out the most talented people
this is clear in the career growth model where Pepsi opts to retain a CEO instead of
looking for another equally potential person.
The other major challenge that Pepsi faces is the Human Resource need to be
consistent in accurately executing the career and talent. This is difficult given the
changing customer behaviors and the trends in the market. The pressure on the
company's HR department creates tension and may thus fail to meet all the
objectives of the organization.
There should have the democratic leadership in this organization. Senior post
people should take the suggestion from the lower-level people while taking the

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decision regarding the sales because the salesmen and the customer executives
know the exact situation about the market and they can better tell the senior people
that what would be good for increasing the sales of the products. Company should
also give some right to the lower-level people to make any decision because some
time salesman also has to make decision according to the situation.
9. Conclusions
To sum up, Pepsi company, in this organization there is a role culture, the
responsibilities are clearly delegated to the authorized personnel and there is no
confusion in the distribution of power. To manage the people effectively it uses the
autocratic leadership style in which all major decisions are taken from the top
management. All the ethical practice impact on the motivation level of the
employees because if the employees will come to know about the good ethical
practice used by the business, then they will be ensured about the safety of their
life and they can fully concentrate on their work. This will result for the good
performance of their employees. The PepsiCo Company also use ethical practices
and all the products delivered by the business are well packed and hygienic. The
company would have many benefits by having flexible working environment. To
sum up, PepsiCo’s organizational structure’s characteristics are based on the
company’s approach to maximize its control of the business while continuing to
grow internationally.

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10.Final Project Reflection

11.PepsiCo's initiatives and impact, it is evident that the company has taken
significant steps to care for and protect society. Through their environmental
sustainability efforts, PepsiCo is actively working to reduce their carbon
footprint, conserve water resources, and minimize waste. These initiatives
demonstrate their commitment to addressing pressing global issues such as
climate change and resource scarcity. PepsiCo's focus on water stewardship is
commendable, as they recognize the importance of preserving this vital
resource. By replenishing water in communities and promoting water
conservation practices, they are actively contributing to the well-being of local
populations and ecosystems. The company's community engagement initiatives,
including education support, disaster relief, and community development
projects, showcase their commitment to giving back and making a positive
impact on society. These efforts demonstrate a genuine concern for the well-
being and development of the communities in which PepsiCo operates.
PepsiCo's responsible marketing practices, particularly regarding advertising to
children, reflect their commitment to promoting healthy lifestyles and
responsible consumption. By adhering to guidelines that prioritize the well-
being of children, PepsiCo is taking a proactive approach to address public
health concerns and contribute to the overall well-being of society. The
company's emphasis on diversity and inclusion within its workforce is also
commendable. By fostering an inclusive environment and providing
opportunities for all employees, PepsiCo is promoting equality and creating a
workplace that values and respects diversity. Furthermore, PepsiCo's
commitment to product innovation, with a focus on healthier options and
sustainable packaging, demonstrates their responsiveness to changing consumer

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preferences and their dedication to reducing their environmental impact. In

conclusion, PepsiCo's initiatives and actions reflect a genuine commitment to
caring for and protecting society. Through their environmental sustainability
efforts, community engagement programs, responsible marketing practices,
diversity and inclusion initiatives, and product innovation, PepsiCo is actively
working to make a positive impact on society and contribute to a more
sustainable future.

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