Case Study: Pepsi Company

Author:
Group 2
(Arnie, Myladie, Jinky, Elvin,
MelJohn,Ma.Angela,Yvonne & Dexter)

CASE STUDY PROBLEM

IT Challenge
1. Failed to hit stated profit target.
2. Companys market value drops to 15%.
3. What else??

Retrieved from website (http://fortune.com/2012/02/13/pepsis-ceo-faces-her-biggest-challenge/ )

VIEW POINT
On the viewpoint of the Management:
Indra Nooyi, CEO of Pepsi
there are no limits to what you can do it isnt about the money, prestige, or
power [which constitute success] because net worth can never define self worth.
Rather people should work out what fulfils them personally devoting your time,
your life, to doing what you love most.

Retrieved from World of CEO (2013) (http://www.worldofceos.com/dossiers/indra-nooyi)

TIME FRAME

The case study is being conducted in 2015.

OBJECTIVES
MUST OBJECTIVE (s)
To revisit and re-engineer companys strategy and give
emphasize nutritious products.
To develop marketing and advertising strategy to attract more
customers in buying their products.

WANT OBJECTIVE (s)

To implement cost optimization.

AREAS OF CONSIDERATION
Strengths
1.) Product diversity
2.) Extensive distribution channel
3.) Corporate Social Responsibility (CSR) projects
4.) Competency in mergers and acquisitions
5.) Successful marketing and advertising campaigns
6.) Complementary product sales
7.) Proactive and progressive
Weaknesses
1.) Over-dependence on Wal-Mart
2.) Low pricing
3.) Questionable practices (using tap water but labeling it as mountain spring
water)
4.) Much weaker brand awareness and market share in the world beverage
market compared to Coca-Cola
5.) Too low net profit margin

AREAS OF CONSIDERATION

Opportunity
1.) Growing beverages and snacks consumption in emerging markets
(especially BRIC)
2.) Increasing demand for healthy food and beverages
3.) Further expansion through acquisitions
4.) Bottled water consumption growth
5.) Savory snacks consumption growth

Threats
1.)Changes in consumer tastes
2.) Water scarcity
3.) Decreasing gross profit margin
4.) Legal requirements to disclose negative information on product labels
5.) Strong dollar
6.) Increased competition from Snyders

SWOT ANALYSIS
Strengths

Weaknesses

1.) Product diversity

2.) Extensive distribution channel
3.) Corporate Social Responsibility (CSR) projects
4.) Competency in mergers and acquisitions
5.) Successful marketing and advertising campaigns
6.) Complementary product sales
7.) Proactive and progressive

1.) Over-dependence on Wal-Mart

2.) Low pricing
3.) Questionable practices (using tap water but
labelling it as mountain spring water)
4.) Much weaker brand awareness and market
share in the world beverage market compared
to Coca-Cola
5.) Too low net profit margin

Opportunity
1.) Growing beverages and snacks
consumption in merging markets
(especially BRIC)
2.) Increasing demand for healthy food
and beverages
3.) Further expansion through
acquisitions
4.) Bottled water consumption growth
5.) Savory snacks consumption growth

1.) Increase M&A through vertical integration

with other countries with low labor cost with
high ROI (S1O1).
2.) Group discussion
1.) Group discussion

)Threats
1.)Changes in consumer tastes
2.) Water scarcity
3.) Decreasing gross profit margin
4.) Legal requirements to disclose negative
information
on product labels
5.) Strong dollar
6.) Increased competition from Snyders

1.) Group discussion

1.) Group discussion

ALTERNATIVE COURSE OF ACTION (ACA)

ACA 1: Diversification of products and through forward and vertical

integration.
ACA 2: To survey other countries for cheap labor market.
ACA 3: To Strengthen R/D, Marketing strategies and explore networking
opportunities

PLAN OF ACTION

Key Resource Area

Human Resource

Objectives

To reduce labor
redundancy.

Action to be Taken

Increase awareness on cost

optimization

Persons Involved

Time Table

Expected Output

Top to bottom

3 6 Months

1st Yr- 50%

2nd Yr- 50%

Sales & Marketing

Service Staffs

3 6 Months

Same

Sales & Marketing

Service Staffs

3 6 Months

Same

To acquire specialization

Maintain Global Image

Creation of additional
revenue streams

Develop a massive
advertising and marketing
campaign

Enhance Customer
Experience

1.) Production (Null)

2.) Service Sustainability
and Reliability with cost
effectiveness.
3.) Develop a nutritionally
products

Information
Technology

IT Consultants

1.) Continuous upgrading

Maintenance of whole-wide
infrastructure

Finance/ Accounting

Optimize Cost

Identify areas of cost

optimization

Marketing

Production/ Service

CIO
IT Consultant
IT Engineer

From top to bottom

3 6 Months

3 6 Months

Same

Same

FALLBACK POSITION
CONCLUSION:

Group discussion

FALLBACK POSITION
RECOMMENDATION:

Group discussion

THANK YOU