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INTRODUCTION OF SOFT DRINK INDUSTRY

Soft drinks can trace their history back to the mineral water found in nature springs. Bathing in natural springs has long been considered a healthy thing to do, and mineral water was said to have curative powers. Scientists soon discovered that gas carbon ium or carbon dioxide was behind in natural mineral water. The first marketed soft drinks (non -carbonated) appeared in the 17th century. They were made from water and lemon juice sweetened with honey. In 1676, the campaigner de lemonades of Paris was gran ted a monopoly for the sale of lemonade soft drinks. Vendors would carry tanks of lemonade on their backs and dispensed cups of the soft drink to the thirsty Parisians. In 1767, an Englishman, Dr. Joseph Priestly, created the drinkable manmade glass of carbonated water. Three years later, the Swedish chemist Torbern Bergman invented a generating apparatus that made carbonated water from chalk by the use of sulfuric acid. Bergmans apparatus allowed imitation mineral water to be produced in large amounts. In 1810, the first US patent was issued for the Means of mass manufacture of imitation mineral water to Simons and Rundell of Charleston, South Carolina. Carbonated beverages did not achieve great popularity in America until 1832, when John Mathews mass manufactured his apparatus for sale to others.

The drinking of either natural or artificial mineral water was considered a healthy practice. American pharmacists, who were selling most of the mineral water started to add medicinal and other flavorful herbs t o the unflavored beverage example, birch bark, dandelion, sarsaparilla and fruit extracts. The early drugs stores with their soda fountains become a popular part of America culture. Customer wanted to take drinks with them and the soft drink bottling indu stry grew from the customer demand. Over 1500 US patents were filled either for a cork, cap or lid for the carbonated drink bottle tops. The bottle tops were under a lot of pressure from the gas. Inventors were trying to find the best way to prevent the carbon dioxide (bubbles) from escaping. In 1892, William Painter, a Baltimore machine stop operator, patented the crown cork bottle seal. It was the first very successful method of keeping the bubbles in the bottle .In 1899, the first patent was issued for a glass-bowing machine for the automatic production of glass bottles. Earlier glass bottles had all been hand blow. Four years later, the new bottle -blowing machine was in operation. The inventor, Michel J.Owens, an employee of Libby Glass Company, first operated it. Within a few years, glass bottle production increased from 1500 bottles a day to 57000 bottles a day. 2) ABOUT THE SOFT DRINK WHATS IN SOFT DRINK?

Soft drink has been part of American lifestyle for more than 100 years. Many of todays soft drinks are the same as the first ones enjoyed in the 1800s.soft drink production begins with the creation of flavored syrup using a closely guarded company recipe. The syrup is mixed with purified water and then carbonated by adding carbon dioxide gas under pressure. This carbonation creates the tingle fizz that gives soft drinks a refreshing taste. Now for a closer look at soft drink ingredients ----------Like other soft drinks, the ingredients that are used in making soft drink are approved and closely regulated by the US Soft drink and Drug Administration (FDA). All the ingredients used in soft drinks are found in a variety of other soft drinks. WATER Soft drink production starts with a pure source of water. Regular soft drink contains 90% water while diet sort drink contains up to 99% water. Drinking water contains trace amount of various elements that affect its taste. You have probably noticed that tap differ in various regions of the country. Bottler use sophisticated filtering and other treatment equipments to remove any residual impurities and to standardize the water used to make soft drinks. Thats why your favorite soft drink tastes the same in New York as it does in India. CARBON DIOXIDE

A colorless and odorless gas, carbon dioxide is the essen tial characterizing ingredient in all carbonated beverages. It is given off when we breathe and is used by the plants to produce oxygen. When dissolved in water, carbon dioxide imparts a unique taste. For that reason natural sources of carbonated, or eff ervescent, mineral water were once highly prized. These rare mineral water were once also believed to have beneficial medicinal properties. Efforts to make and sell artificial effervescent mineral water were underway in Europe and US by 1800. It was the innovative step of adding flavors to these popular soda water that gave birth to the soft drink beverages we enjoy today. In these days of soft drink manufacturing, carbon dioxide was made from sodium salts. This is why carbonated beverages were called sodas or soda water.

Today, bottlers buy pure carbon dioxide as a compressed gas in the high pressure cylinders. Carbon dioxide gas is absorbed into flavored soft drink in a carbonator machine just before the container is sealed. While under pressure a nd chilled, soft drink may absorb up to four times the beverage volume of carbon dioxide. FLAVORS

One of the most important ingredients in the soft drinks is flavoring. Most soft drink bottles mix many individual flavors to create distinctive tastes. Natural flavors in the soft drinks come from spices, natural extracts and oils. Fruit flavored soft drink such as orange and lemon -lime often contains natural fruit extracts. Other flavors such as root beer and ginger ale contain flavorings made from herbs and spices. There are also some artificial or man-made flavorings used in the soft drinks. Nature does not produce enough of some flavors to satisfy world demand. Also, some flavors are limited geographically and seasonally. COLORS Many people do not realize h ow important color is to taste perception. Color affects our psychological impression of soft drink. If you dont believe it, try eating a familiar soft drink in the dark. The colors used in the soft drink and beverages comes both from natural and syntheti c sources. CAFFEINE Caffeine is a substance that occurs naturally in more than 60 plants including coffee beans, tealeaves, kola nuts and cocoa beans. In some cases, small amounts of caffeine are added to soft drinks as a part of the flavor profile. The amount of caffeine in a soft drink is only a fraction of that found in an equal amount of coffee or tea.

Caffeine has a classic bitter taste that enhances other flavors. It has been part of almost every cola and pepper type beverage since they were first formulated more than 100 years ago and has been enjoyed in coffee, tea and chocolate beverages for centuries. Even though some people feel the effects of caffeine are harmful, scientific research has refused these claims. The long history of caffeines use confirms that it is safe when consumed in moderation. For people who wish to restrict their caffeine intake, many caffeine free soft drinks are available. ACIDULANTS Similar to fruit juices and many other soft drink products, most drinks are slightly acidic. Acidulants add a pleasant tartness to soft drinks and acts as a preservative. Some soft drinks contain a small amount of one or two common soft drink acidulants (phosphoric acid and citric acid). Occasionally, other acidulants such as malic acid or tar taric acid are also used. PRESERVATIVE Soft drinks do not normally get spoiled because of their acidity and carbonation. However, storage conditions and storage time can sometimes impact taste and flavor. For this reason some vs. contains small amounts of preservatives that are commonly used in many soft drinks. POTASSIUM

Potassium is another essential nutrients found in many natural and man made soft drink ingredients like sodium, potassium exists naturally in drinking water and, therefore, in soft drinks. Small amount of potassium are also found in some of the flavoring agents and other ingredients used in soft drinks. SODIUM Because the name soda pop and soda water were associated with early soft drinks, many people falsely believe that carbonated beverages contains significant amount of sodium. That is true. Sodium, in the form of various salts, is present in many natural and man -made compounds. It is an essential mineral nutrient responsible for regulating and transferring body fluids, as well as other important body functions. Although an adequate daily intake of sodium is necessary for good health, excessive consumption has been tied to high blood p ressure in some people. SWEETENERS Non-diet soft drinks Most regular (non-diet) soft drinks are sweetened with either sucrose or high fructose corn syrup, (HFCS). A mixture of these sweeteners may also be used. Sucrose, the familiar sweetener in your sugar bowl, comes from sugarcane or sugar beets. HFCS is a newer and more convenient liquid sweetener, similar to sucrose but made from corn. It is now used in many prepared soft drinks.

With either, the amount of sweetener in a soft drinks ranges from 7 to 14% , about the same amount as a glass of pineapple or orange juice. Both sucrose and HFCS are easily digested carbohydrates, and carbohydrates are an important part of the diet. They provide calories, which are the source of energy for the body. Diet soft drinks The popular class of beverages known as diet soft drinks is made possible by the intensely sweet substances we refer to as diet or low calorie sweeteners. Aspartame, saccharin, sucrose and acesulfame K are approved for use in soft drinks today and sweeteners remain an active area of soft drink research. By choosing from a variety of different sweeteners, manufacturers can blend sweeteners to match beverage formulations and better appeal to all c onsumer tastes and preferences. ASPARTAME Aspartame is a nutritive, sweetener, which is easily digested and provides calories. However, its sweetening power is so great that the tiny amount needed to sweeten a soft drink adds less tha n one calorie per 12-ounce can. SACCHARIN Saccharin has many desirable proper ties that make it a valuable soft drink ingredient. It is stable in soft drinks and is metabolically inert, which means that it goes through the body without changing. Finally , It is relatively inexpensive.

ACESULFAME K Acesulfame k, under the brand name of sunnett, is an example of a new diet sweetener approved for soft drinks by the FDA in 1998. it is a calorie free, heat stable sweetener that is 200 times than sugar.

SUCRALOSE The FDA approved sucralose in 1998 for use in a wide variety of soft drink products including Soft drinks. Sucralose is a low calorie, high -intensity sweetener and is about 600 times sweeter than sugar. It is sold under the brand name of splenda. Sucralose and sugar have been shown to have sim ilar taste and flavor profiles. 3) INVENTOR OF SODA WATER JOHN MATHEWS is the person referred to as the FATHER OF AMERICAN SODA WATER. 4) THE MAIN BRANDS IN THE INDIAN SOFT DRINK MARKET y Pepsi y Mountain dew y Miranda orange y Miranda lemon

y Slice

INTRODUCTION OF PEPSICO
HISTORY Pepsi was first made in 1898 by Caleb Braham and was originally called Brads drink. It was of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. It was renamed Pepsi cola after Pepsin and cola nuts in the recipe. The name was trademarks on June 16, 1903. Caleb Braham, a pharmacist, like many pharmacists at the turn of the century, had a soda fountain in his drug store, where he served his customers refreshing drinks that he created himself. This i s where Pepsi was first served. After seventeen years of success, Caleb Braham lost Pepsi cola after gambled on the stock market, he believed sugar prices would raise but they fell instead. Pepsi

cola was bankrupt in 1923. In 1931, Pepsi cola was brought by loft candy company loft president; Charles G. Guth reformulated the popular soft drink. In 1940, history made when the first advertising jingle was Nickle Nickle an advertisement for Pepsi cola that referred to as Pepsi price and the quantity for the price, Nickle Nickle became a h it record and was recorded into 55 languages. In first achieved success by selling its drinks in recycled bear bottles, which allowed it to sell large bottles for lower cost than coke. Pepsi thus became viewed as the soft drink of the lower classes. In the United States, Pepsi was viewed as the drink of blacks and in Canada it was viewe d as the drink for francophone. In the 1950s Pepsi poured great resources into trying to improve its image. It brought many televisions ads and began its long tradition of e mploying celebrities to sell its product. It grew and became a serious rival of the coco cola corporation, but it was still firmly in 2nd place. In 1960s, Pepsi originated the market strategy known as The Pepsi generation. This strategy was a constant repetitious advertisement of Pepsi aimed at young people. it worked under the assumption that there are new consumers coming at age every day and if one stops marketing to the newest consumers, one will have a shrinking base of established consumers of ones product. With the baby boomer generation, the advertising of Pepsi changes into t he drink that keeps your youth.

In 1964, Pepsi introduced, Diet Pepsi. The aim of launching diet Pepsi was attract market segment which was diet conscious. In 1980s, Pepsi began a series of advertisements called the Pepsi challenge, in which it directly compared, its product to that of coco -cola, showing that people preferred there product to the competitors coco -cola, at the time, was suffering reduce sales, and made mistake of its own in changing the formula for its product the new formula to be called New Coke possibly in response to the Pepsi challenge. This period fierce competition between the 2 compa nies became known as cola wars. 1998 became a year of introduction for the generation next campaign, which pitched a futuristic view of the company to youth. Racer Jeff Gordon was used as a symbol for fast, young and powerful. Pepsi is often the most common at sports events such as major league baseball, as well as large, arena size concerts. During the fall of 1998, Pepsi introduced Pepsi one, followed by an ambitious advertising campaign with the main slogan of just 1 calories. The cola introduced the use of Sunett and aspartame to attain 1 calorie. The company teamed up with George Lucass reintroduction so star war to the big screen during the summer of 1999. Twenty -four characters from the star war series were introduced a artwork of the cans our the summer, creating on emphasis for a collectable act set. This created huge market saturation for

awareness of the movie as momentum buildup. Its current (as of 2004) slogan is ask for more

VISION OF THE ORGANIZATION


The future description of something (an organization corporate cultur e, a business, a technology, an activity) in the future. Triply drinks define its vision statement as follows. Tripty drinks Pvt. Ltd enters the next few years with the confidence of a learning knowledge based and happy organization. We will establish our selves as a supplier of choice by delighting our customers with our service and our products. In the coming decade, we will become the most cost competitive Beverages Plant and so serve the community and the nation.

MISSION STATEMENT
Essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it in, and the customers it seeks to serve and satisfy. Tripty drinks Pvt. Ltd. derive their mission statements from a particular set of tasks. They are called upon to perform in the light of their individual, national or global priorities. Mission statement of Tripty Drinks Pvt. Ltd.

Consistent with the values of the Tripty drinks. Pvt. Ltd and strives to strengthen Indias industrial base t hrough the effective utilization of men and materials. The means envisaged to achieve this are high technology and productivity, consistent with modern management practices. Tripty drinks recognize that while honesty and integrity are the essential ingred ients of a strong and stable enterprise, profitability provides the main spark for economics activity. Overall, the company seeks to scale the heights of excellence in all that it does in all atmospheres free from fear and thereby reaffirms the faith in de mocratic values.

PHILOSOPHY
The Philosophy of Tripty drinks Pvt. Ltd. Establishes the value, believes & guidelines for the manner in which the Tripty drinks Pvt. Ltd. Is going to conduct its business. Usually the officers of the Tripty drinks Pvt. Ltd. La y down the corporate Philosophy, which an organization follows in its strategic and operational activities. Such a Philosophy may not be consciously and formally stated but may gradually evolve due to the officers actions. Generally an officer has a perception of the type of organization that he wants his company to be the executive committees of Tripty drinks Pvt. Ltd. Discuss and decide on a corporate philosophy to be followed for strategic management. Consultants may also be called upon to make an in depth analysis of the organization to suggest an appropriate Philosophy statement

Question 2 General environment:- general environment are differentiated into the following parts which are discussed as follow: III. EXTERNAL ENVIRONMENT A. Societal Environment: 1. Economic Factor:

The key elements taken into consideration are the principal market risks, which PepsiCo is exposed to interest rate, foreign exchange rate and commodity prices. These are specified as :

(a)Interest rate on PepsiCos debt as well as it short -term investment portfolio: PepsiCo can manage its overall financing strategies in term of balancing investment opportunities and risks. The company is using interest rate and currency swaps to effectively mod ify the interest rate in order to reduce the overall borrowing costs.

(b)Foreign exchange rate and other international economic conditions: Operating in international markets involve exposure to movements in currency exchange rates, which typically affec t the economic growth, inflation, interest rate, government actions and other factors. Once these changes occur, they will cause PepsiCo to adjust its financing and operating strategies. Changes in currency

exchange rates that would have the largest impact on translating PepsiCos international operating profit include Mexican peso, British pound, Canadian dollar and Brazilian real. Through years, macro -economic conditions in Brazil, Mexico, Russia and across Asia Pacific have adversely impacted on PepsiCo s operations. Especially, the economic turmoil in Russia which accordingly resulted in the devaluation of the ruble in 1998 caused the significant drop in the soft -drink demand.

(c)Commodity prices that affect the cost of raw materials: PepsiCo is subjec t to market risk with respect to commodities because its ability to recover increased costs through higher pricing will be limited by the competitive environment in which it is operating.

2. Technological Factor:

Development of additives such as sugar less sweeteners, caffeine free products, and new flavorings enables PepsiCo to provide products that meet changing customer tastes and preferences. In addition, computerized manufacturing technologies are great contributions to higher efficiency and qualit y in bottling operations. For Pepsi, a critical business challenge is ensuring that the

distribution processes can deliver the right products to the right place at the right time. According to Jerry Gregoire, Vice President, Information Services, The competitive advantage will go to the company that can apply technology to areas such as logistics, getting costs out of the distribution pipeline and getting products into the stores less expensively while increasing the availability of sales information. Pepsi NAs data communication network is an important element in the companys efforts to address sales and distribution challenges with technology. Connecting nearly 330 manufacturing, distribution, and sale sites around the U.S. and Canada, the Pepsi NA net work transports data help management in controlling inventory. For instance, sales data helps managers identify regions where certain products are not selling well, and move any excess inventory to areas where those products are in demand. Sales data also helps Pepsis managers make decisions about products before they reach the freshness date and must be pulled from the shelf and discarded.

3. Political/Legal Factors:

(a)The Human Right Issue: Few years ago, PepsiCo did business in Burma (Myanmar) under the brutal SLORC regime, the State Law and Order Restoration Council. As the SLORC moved to attract international investment, two millions people have been forced to work for no pay under brutal conditions to rebuild Burmas long neglected infrastructure . What PepsiCo did at the time was

patronizing the SLORC regime in what they called rebuild the countrys infrastructure. PepsiCo also said it helps the economy by buying "products such as mung beans, sesame seeds and rattan from small, local farmers." T he issue addressed is whether these products were made by forced labors. In fact, PepsiCo must export their products for hard currency because it cannot use Burma's nearly worthless currency to buy imports of supplies for its bottling plants. As the result, PepsiCo had lost contracts at Harvard, Stanford, Colgate and other universities because it refuses to name the sources of these farm products.

(b)FDA Regulation: As a soft drink product manufacturer, PepsiCo is under the control of the Soft drink and Drug Administration. For example, the FDA tests and certifies new ingredients such as high -intensity sweeteners before they are allowed to be used in soft drink production.

(c)Waste Management and Public Concerns: Growing environmental awareness is leading to increasing legislation. The companys operation is affected by federal legislative proposals that address the four objectives:

-Minimize the quantity of packaging material entering the nations solid waste system

-Minimize the consumption of scarc e natural resources

-Maximize the recycling and reuse of packaging materials

-Protect human health and the natural environment from adverse effects associated with the disposal of packaging materials. For example, Connecticut has already passed a law t hat regulates packaging to increase its recyclability.

4. Socio-cultural Factor:

Consumers today are not as much joyous to cola products as they were before. Age and ethnicity are two main characteristics that affect consumer preference for soft drinks and alternative beverages. With age, health concerns become more of a factor when choosing a beverage. To illustrate, some studies show that cola products or soft drink in general may cause kidney stones and other related diseases. In contrast to older consumers, younger consumers particularly teens and those in their twenties have less attention spans for products and are more likely to prefer products that seems to be fun and different . Although PepsiCo is the number one seller in carbonated beverages, it lost is market share in 2000 as consumers seek for alternative beverages. As the m atter of fact, PepsiCo switches to non-cola products such as bottle -water, ready-to-drink tea and sports drinks. In turn, bottled water gained the market share up to 12.8% in unit sales.

B. Task Environment:

1. New Entrants:

It is important when PepsiCo can identify what costs potential entrants to enter the soft drink industry. The production technologies required for manufacturing soft drinks is widely available for the potential entrants. However, competing on a national or global scale requires t he ability to manufacture and distribute a well recognized brand. Therefore, not only PepsiCo is the one who have to spend a tremendous fund on advertising campaigns, other companies such as Coca -Cola and Cadbury Schweppes have to go on the same path. Acco rding to the Beverage Industry, PepsiCo had a great number of commercials during the super -bowl. Coca-Cola Co., PepsiCo, and Cadbury Schweppes spent a total of $469.1 million on media advertising in the U.S. market between January and September 1996. Will new entrants be able to spend a tremendous amount to advertise themselves, or in other words, to create their big names in order to deprive the market shares from PepsiCo or Coca-Cola.

Another aspect is the distribution challenging in some Asian countr ies such as

China, Indonesia and India, where poor road conditions and other infrastructure problems may prevent the effective delivery by trucks. The question is whether PepsiCo can have a competitive advantage to overcome these difficulties, then it will be difficult for the new companies who want to distribute their products.

2. Existing Companies:

The U.S. and global soft drink industries are quite concentrated. Long dominated by two companies, Coca-Cola Co. and PepsiCo, the industry saw the emergen ce of a third significant player when Cadbury Schweppes acquired the Dr. Pepper and 7UP brands in 1995. Table below shows that the top three firms accounted for 90% of the U.S. soft drink market in 1998 vs. 2000. The top one is still Coca -Cola with market share of 44% in 2000, next would be PepsiCo with 30.9% share. Dr.Pepper & 7UP goes down slightly in 2000 at 14.4%. There are some changes on market shares to other companies but the changes are not significant. U.S Soft Drink Market Share in 1998 vs 2000 Gallons Market Volume Company Rank Millions(1998) Millions(2000) 1998 Share 2000 Share Coca-Cola Co. 1 6,223.90 4,491.5 43.80% 44.0% PepsiCo Inc. 2 4,370.20 3,157.4 30.80% 30.9% Dr.Pepper&7UP 3 2,060.40 1,473.1 14.50% 14.4% Cott 4 357 300 2.50% 2.9%

National Beverage 5 270 214.0 1.90% 2.1% Royal Crown 6 254.6 106.3 1.80% 1.0% Monarch 7 138.5 11.8 1.00% 0.1% Big Red 9 32 26.7 0.20% 0.3% As discussed in Social -cultural Factor part, consumers tastes change over the time. Instead of drinking cola pr oducts, consumers switch to water or fruit juices. Competitors may take this advantage to market their products. One example is the agreement between Ocean Spray Cranberries Inc. and Beijing Huiyuan Beverage Group, which is the largest juice company in Chi na. Ocean Spray grants a ten -year license to Huiyuan manufacture, market and distribute its products.

3.Trends:

The market for soft drink is expected to grow at a slower rate in the next four years, according to a series of new global soft drink reports published by Beverage Marketing Corporation. The industry had a five -year compound annual growth rate (CAGR) of 5.0% between 1993 and 1998. But for the five -year period from 1998-2003, the CAGR is estimated to drop to about 4%. Although colas are the most important soda flavor on the market, the strongest growth in the industry is in the non-cola segment.

IV. INTERNAL ENVIRONMENT A. Corporate Structure PepsiCo owns its corporate headquarters buildings in Purchase, New York. The company is engaged in the snack soft drink, soft drink and juice businesses. Each product category is further divided into North America se gmentUS and Canadaand international segment. (PepsiCo 2000 Annual Report) Frito-Lay North America (FLNA) Frito-Lay North America manufactures, markets, sells and distributes salty and sweet snacks. Products manufactured and sold in North America inclu de Lays and Ruffles brand potato chips, Doritos and Tostitos brand tortilla chips, Cheetos brand cheese-flavored snacks, Fritos brand corn chips, a variety of branded dips and salsas and Rold Gold brand pretzels. Low -fat and no-fat versions of several brands are also manufactured and sold in North America.

Frito-Lay International (FLI) Frito-Lay International manufactures, markets, sells and distributes salty and sweet snacks. Products include Walkers brand snack soft drinks in the United Kingdom, Smiths brand snack soft drinks in Australia, Sabritas brand snack soft drinks and Alegro and Gamesa brand sweet snacks in Mexico. Many of our U.S. brands have been introduced internationally such as Lays and Ruffles brand potato chips, Doritos and Tostitos b rand tortilla chips, Fritos brand corn chips and Cheetos brand cheese -flavored snacks.

Principal international snack markets include Mexico, the United Kingdom, Brazil, Spain, the Netherlands, Australia and South Africa. Pepsi-Cola North America (PCNA) Pepsi-Cola North America manufactures concentrates of brand Pepsi, Mountain Dew, Mug, Slice, Fruitworks, Sierra Mist and other brands for sale to franchised bottlers. PCNA also sells syrups to national fountain accounts. PCNA markets and promotes its brands. PCNA also manufactures, markets and distributes ready -todrink tea and coffee products through joint ventures with Lipton and Starbucks and licenses the processing, distribution and sale of Aquafina bottled water. In addition, PCNA manufactures and sel ls Dole juice drinks for distribution and sale by Pepsi-Cola bottlers.

Pepsi-Cola International (PCI) Pepsi-Cola International manufactures concentrates of brand Pepsi, 7UP, Mirinda, KAS, Mountain Dew and other brands internationally for sale to franch ised bottlers and company -owned bottlers. PCI operates bottling plants and distribution facilities in various international markets for the production, distribution and sale of company -owned and licensed brands. PCI markets and promotes its brands internat ionally. Principal international markets include Mexico, China, Saudi Arabia, India, Argentina, Thailand, the United Kingdom, Spain, the Philippines and Brazil. Tropicana

Tropicana produces, markets, sells and distributes its juices in the United State s and internationally. Products primarily sold in the United States include Tropicana Pure Premium, Seasons Best, Tropicana Twister and Dole brand juices. Many of these products are distributed and sold in Canada and brands such as Fruvita, Looza and Copella are also available in Europe. Principal international markets include Canada, the United Kingdom and France. B. Corporate Culture PepsiCo, Inc. has been systematically changed over the past two decades from passivity to aggressiveness in order to avoid stagnation and to adapt to changing competitive threats and the changing economic or social environments. Once the company was content in its number two spot, offering Pepsi as a cheaper alternative to Coca -Cola. But today, a new employee at PepsiC o quickly learns that beating the competition, whether outside or inside the company, is the surest path to success. In its soft -drink operation, for example, Pepsi's marketers now take on Coke directly, asking consumers to compare the taste of the two colas. The culture of the company now is based on the goal of becoming the number one of soft drinks. Managers are pitted against each other to grab more market share, to work harder and to wring more profits out of their businesses. Because winning is the key value at Pepsi, losing has its penalties. Severe pressure was put on managers to show continual improvement in market share, product volume, and profits. All Employees know they must win merely to stay in place and must devastate the

competition to get ahead. To keep everyone on their toes, "creative tension" is continually encouraged among departments at Pepsi. The staff is kept lean and managers are moved to new jobs constantly, which results in people working longs hours and engaging in political maneuvering just to keep their jobs from being reorganized out from under them. C. Corporate Resources

1. Marketing: Pepsi has now beaten Coke in the domestic take -home market, and it is mounting a challenge to Coca Cola overseas. Pepsi has been maki ng inroads: Besides monopolizing the Soviet market, it has dominated the Arab Middle East ever since Coke was ousted in 1967, when it granted a bottling franchise in Israel. The companys products are transported from manufacturing plants to its major distribution centers, principally by company -owned trucks. The company utilizes a direct store delivery system, whereby its sales force delivers the products directly from distribution centers to the store shelf. This system permits the company to work closely with retail trade locations and to be responsive to their needs. The company believes this form of distribution allows it to have a marketing advantage and is essential for the proper distribution of products with a short shelf life. PepsiCo has developed the national marketing, promotion and advertising programs that support the its many brands and brand image, oversee the quality

of the products; develop new products and packaging, and coordinates selling efforts. (PepsiCo 2000 Annual Report)

2. Finance: PepsiCo, Inc. manufactures, markets and sells soft drinks and concentrates (Pepsi-Cola, Mountain Dew, Slice, etc.), snack soft drinks (Frito-Lay) and Tropicana branded juices. For the 12 weeks ended 3/24/01, net sales increased 8% to $4.54 billion. Net income increased 18% ($498 million). Revenues benefited from volume gains across all divisions. Net income also reflects an increased gross profit due to higher effective net pricing. Even though sales of PepsiCo were going down slightly on the last three years but they still have very high profits on that years. On the Ratio PepsiCo just only 33% on debt/equity ratio and profit margin is 10.9 compare with industry just only 8.10%. On the first quarter of this year net sales advance 8% to over $4.5 b illion with earnings per share increasing 17% to $.34. PepsiCo is very strong revenue growth. EPS grows 15% in the 16-week quarter to 38 cents, and 17% for the 52 -week year to $1.45 Each division boosts Q4 volume, and gains market share for the year Net sales advance 8% to over $6 billion for the quarter, annual sales grow 8% and exceed $20 billion Every division posts double -digit operating profit growth in the quarter, annual

operating profits advance 13% to $3.5 billion Operating cash flow grows 33% to $2.7 billion Return on invested capital (ROIC) improves to 23% -- a 250 basis point increase 2001 outlook for continued double -digit earnings growth 3. Operations: Most of the sales are through the companys own direct store distribution (DSD) systems, where they actually take the products to stores and put them on the shelf. These systems reach hundreds of thousands of outlets, from the tiniest liquor stores to the mightiest club store. The DSD systems give the company the ability to merchandise its products for maximum appeal to consumers. PepsiCo has been adding new platforms for growth, which strengthen the companys portfolio and enhance its vitally important innovation capabilities. For example, in January 2001 the com pany acquired a majority of the South Beach Beverage Company, whose SoBe line of drinks adds to the Pepsi -Cola portfolio some of the fastest-growing brands in the fastest -growing segment of the industry, non-carbonated beverages. Another example is the planned merger with the Quaker Oats Company, which is expect to complete in the second quarter of 2001. This is without question the biggest step to ensure a bright future of growth for PepsiCo. The merger will make PepsiCo an even more effective competito r in the expanding market for convenient soft drinks and beverages. It will add two very powerful brands to its portfolio, Gatorade and Quaker, and create new opportunities for every PepsiCo

division. The combined enterprise will rank among the world's fiv e 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 "5 0 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 f acilities 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 cus tomers 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 outstand ing 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 bask etball.

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 Question 3 There are many things that may affect a business but Porter divides these things into 5 force model 1. Threat of new entrant:-As a porters view that in a soft drink, the competition is very high. It also have threat of new entrants. If people know how m uch profit is gain by soft drink than they want to open a new soft drink in world. When the new soft drink will come in the industry than soft drink may lose their customers and its attractiveness. 2. Threat of substitutes:- there are many substitutes of cold drinks like coca-cola, appy fizz etc. If the prices of substitutes are low and quality of product is same than it is a common thing that customers are willing for other substitutes. If the substitutes provide a soft drink in high price than it is a ve ry good opportunity for our business.. 3. Bargaining power of supplier: - Suppliers plays very vital role in order to make profit in a business. If your cost of purchase is low one can bear a good range of profit as well as can sell its product even in hig h competition with a good margin. Supplier provide raw material into a business. The cost of the items which are provided by the suppliers can have a major impact on the organizations

profitability. When a industry is less attractive than bargaining power of the suppliers very high. In two fat Indians soft drink will have a threat of bargaining power of suppliers if there will be many buyers and few suppliers in the market. But now there is no threat of bargaining power of suppliers because they have many suppliers. 4. Bargaining power of buyers:- buyers are the people who make demand in the industry. Two Indian soft drinks have a threat of bargaining power of buyer because there are many sellers in the industry who provides a plenty of drinks to the people. It is not a one supplying group for the people. 5. Rivalry among existing firms: - there is more competition in the soft drink industry. The owners of the soft drink always determine in his mind that he gives a good quality of soft drink for his customers. He knows the capability of his competitors. If competitors give attractive products and services to the customers than he will likely have a little power in this situation. The suppliers and buyers will go another soft drink. If they dont get a good dea l from one they will be move from there. If other competitors cant do what two fat Indians do it has very tremendous strength in the market.

Question no 4 SWOT ANALYSIS

Organizations often structure their situation analysis according to the acronym SWOT, which stands for strengths, weaknesses, opportunities, and threats. An organizational strength is an internal capability that the organization can exploit, to achieve objectives, whereas an organizational weakness is an internal characteristic that may undermine your performance. An opportunity is an external market situation that offers potential for helping the organization meets its objectives. In contrast, a threat is an external element that can develop into a problem and potentially prevent the organ ization from achieving a goal or their objective .Organizations can use SWOT analysis to see how their strengths, weaknesses, opportunities, and threats compare with those of their competition .

SWOT ANALYSIS OF PEPSI COLA


SWOT analysis is a situation analysis tool that helps the managers to identify internal strengths and weaknesses, external opportunities, and threats and the potential impact of these factors on the organizational performance.

Strengths
The biggest strength of the organization is th e brand name of Pepsi, which is known throughout the world for its excellence. Maintaining excellent quality by using latest equipment in order to produce best hygienic product also strengthens the position of Pepsi in the marke t The easy availability of the product throughout the franchised area also acts as strength for the organization. This is due to the

excellent distribution network that the organization has. It mostly follows Indirect Distribution i.e. Manufacture-------------- Wholesaler---------------Retailer However in some places it also follows the direct distribution i.e., Manufacturer-------- Company Warehouse-------------- Retailer. The organization has a team of highly skilled professionals as their sales force. These people are dedicated and motivated enough to meet any level of demand and to fulfill the requirements of the organization. The company enjoys Brand Loyalty, which is a plus point of the organization.The market share captured by the organization also is a great strength for it. In order to keep in touch with its target market, the organization uses heavy advertisements. These advertisements not only entertain the viewers but also are very effective in delivering the actual message of the advertisement , The frequency of announcing and introducing different and attractive packages is also very efficient and effective. The company has been able to maintain a well developed and highly equipped distribution network, which is the basic factor behind the success of Pepsi especially in this particular region. The marketing department of the organization is highly skilled and Quality is the main issue. This approach used by the organization has been effective in producing the best results ever. The organization also has a strong sponsorship. Pepsi has the biggest production capacity in Pakistan. Only Islamabad alone can produce more

than 80,000 crates a day, while the plants in Lahore, Gujranwala and Karachi can produce up to 110,000 crates per day.

Weaknesses
A weakness is an internal characteristic that may undermine performance. Haidri Beverages do not have a lot of weaknesses but there are some areas that have been ignored by the organization. These include the following weaknesses: The availability of packa ges is sometimes difficult for the organization to maintain. So far the company has not been able to access the rural areas and this provides opportunity for the competitors. Advertisement is another aspect in which the company lacks behind in the rura l One perception that really hurts Pepsi is its image as a Jewish organization. It affects it sales whenever there is an international incident that involves Muslims In one aspect in which PCI really needs to work on is the lack of innovation in advertising. Pepsi for long holds the reputation of making attractive and innovative advertising. However in recent years it has not been coming up to the reputation it has set for itself. Not many new concepts are coming that could really attract the consumers towards its products. The failure of its Quetta plant due to the differences among the owners has also affected the production, distribution and sales of Pepsi in a huge province. an

Opportunities

Following are the opportunities available to the organ ization. The company has the opportunity to improve its services in the rural areas. Post mix operations can be expanded from 160 machines to 500 machines in order to make the product available at all times. New and innovative products have always acted as an opportunity for the organization. Pepsi is bringing up one of its very famous brand Mountain Dew in Pakistan. It is expecting it to do well in Pakistani market thus helping it to increase its market share and image. International Cricket is coming to Pakistan after a long time. The Post 9/11 events blocked international teams to visit Pakistan for security reasons. Now that the threats are over, the cricket hungry people of Pakistan are desperate to watch quality cricket. Pepsi is hoping to avail thi s opportunity of advertising through cricket, as it is the major sponsor of Pakistan Cricket Team .

Threat
The threats faced by the organization that may hinder its performance are as follows: The biggest threat for the organization is its competitor Coca -Cola. The franchisers of Coca-Cola arc reorganizing themselves at the moment. So Pepsi need to develop a strategy keeping in mind their reorganization. The government

policies and the changing requirements of the customers can effect the operations of the company. The major threat coming to Pepsi in coming years is the regrouping and re organizing of Coca Cola International. Coca Cola has given the Pakistani Franchise to Coca Cola Bottlers Pak istan Ltd, which is a subsidiary company of a Singaporean Group. This group brings an excellent reputation with it. Coca Cola is investing a lot of money in its Production capacity and Distribution networks. They have targeted 2004 as come back year hopin g to give tough time to all times rival Pepsi. After 9/11 and Post Iraq events, it has induced local consumers to turn over to domestic products in order to ban foreign made products in Pakistan. Mecca Cola, Amrat Cola and Pakola are prospective competitors who wish to take away market share from Pepsi through their quality, variety and price.

www.pepsico.com www.jaibeverages.com www.hindubusinessline.com www.just-drinks.com www.scribd.com/doc/15434619/Pepsi -Project

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