The Leader as a Strategist Report
Perspectives in Change Leadership
The company I will be doing an analysis of is the Pepsi Co. Leaders are competent enough to create and execute strategies that will guarantee the organization’s goals are met. Successful companies always have management that are mindful of their goals, mission, and values. Generally, a company does an assessment of their organization’s structure to determine if their goals are being achieved on a yearly basis. This assessment will realign the organization’s goals with their mission and vision statement. In addition, those in leadership positions will be able to successfully transfer the updated strategic plan to staff ensuring goal are met and aligned with the organization’s mission.
According to Pepsi Co’s official website:
At PepsiCo, we aim to deliver top-tier financial performance over the long term by integrating sustainability into our business strategy, leaving a positive imprint on society and the environment. We call this Performance with Purpose.
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It starts with what we make— a wide range of food and beverages from the indulgent to the more nutritious; extends to how we make our products— conserving precious natural resources and fostering environmental responsibility in and beyond our operations; and considers those who make them— striving to support communities where we work and the careers of generations of talented PepsiCo employees. (pepsico.com, 2019)
As one of the largest food and beverage companies in the world, our mission is to provide consumers around the world with delicious, affordable, convenient and complementary food and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term, sustainable growth. (pepsico.com, 2019)
Pepsi-Cola was initially created in North Carolina by a pharmacist in 1898. The company grew for years then in 1965 the company merged with Frito Lays company creating what we know today as PepsiCo. PepsiCo is one of the leading beverage companies in the world along with Coca-Cola and Dr. Pepper. PepsiCo is not afraid to take chances for growth and that has paid off. The brand Pepsi co has transformed from just soda to soda, snacks, juice, and more. The global brand currently includes: Pepsi, Quaker, Gatorade, Tropicana, and Frito-Lay. Although Pepsi has many competitors the number one is Coca-Cola and unfortunately Pepsi remains in second place. In the last decade Pepsi’s market share has dropped while Coke has risen. The Beverage digest shows that both companies have dropped in the diet arena, but still Coke is in the lead.
Today more than 50 years after the merge PepsiCo products in sold in more than 200 countries and territories worldwide. Pepsi is made up of many different divisions spanning across the globe. Each division has its own way of doing business and history. “Pepsi’s traditional target market is teenagers and young adults, according to Forbes magazine. Forbes reports that to reach younger consumers, Pepsi has tapped many celebrities over the years, ranging from pop stars to rap and hip-hop artists.”
Pepsi understand the need for diversity and inclusiveness and committed to executing these advancements on a daily. From having the first all-black sales force in the 1940’s to supporting veterans, military, and their families, to developing long term sustainable relationships with women owned enterprises. “In 2017, PepsiCo invested USD 1.5MM to launch “Women with Purpose,” a program to support at least 10,000 women in Latin America by providing education, entrepreneurship and employment opportunities.” (pepsico.com, 2019)
- Worldwide branding: “Comprehensive product portfolio with 100 brands serving nearly every niche in the beverage, food and snack industries.” (Jurevicius, 2018)
- Strong Leadership: With Indra Nooyi leading PepsiCo it has succeeded greatly. “It has managed to stay at number two position in the complete food and beverage sector only behind Nestle in that field.”(Bhasin, 2018)
- Customer Loyalty: Loyalty is what has made PepsiCo the company it has grown to be. Between their iconic taste and the fun and eye-catching labeling customers do not stray.
- Coca-Cola is a strong competitor: Coke is considered the largest beverage industry in the world.
- Limited healthy options: PepsiCo has weak marketing when it comes to healthy options, so the sales do not do well.
- Reduced Net revenue in Middle East: “The brand’s net revenue in the Middle East has fallen in the years past. The fall was due to weakening Egyptian currency. Fluctuations in the international currency exchange rates have a negative effect on the revenue of Pepsi from time to time.” (Pratap, 2018)
- Partnerships with related businesses: The brand can expand faster by entering into partnerships with related businesses like they did with Starbucks.
- Growth through acquisitions: The brand can also find faster growth through acquisitions and by acquiring smaller and related brands
- Technology advances: PepsiCo should follow the tech train that Coke has set. Using advance technology by producing touch soda fountains with different flavors for consumers to choose.
- Competitors: “PepsiCo’s main competitors are Coca-Cola, Kraft foods, Nestle, and Dr Pepper.” (Bhasin, 2018)
- Health Factor: The unhealthy factor associated with its products can take a toll on the health-conscious customers and might lose them. This can be seen by the fall of soft drinks sale
- Legal and regulatory threats: Legal and regulatory threats pose a major risk to big businesses like Pepsi. Compliance risks can sometimes result in major fines and lead to losses. (Pratap, 2018)
Pepsi is a strong global soda beverages brand. The SWOT analysis is the best way for PepsiCo to determine their strength, weakness, opportunities, and threats. Although, threats will always be present and can hurt a company the opportunities are what is best for the company’s growth. Realizing those opportunities and deciding on which strategies will best offset the weaknesses of the company and help overcome the threats while strengthening the current strengths and creating more opportunities for growth.
PepsiCo’s internal environment consist of the structure, systems, and culture. The organizational structure of PepsiCo is divided into various components. Within the company there is a headquarters making all the decisions. Purchase, Harrison, NY is where PepsiCo’s corporate headquarters is located. From the headquarter the company is then divided over 6 continents: North America Beverages; Frito-Lay North America; Quaker Foods North America; Latin America; Europe Sub-Saharan Africa; and Asia, Middle East and North Africa. Each division has its own chain of command however, all divisions are still under the control of the main headquarters.
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Pepsi use the open style of communication where the management and staff are free to communicate with each other. According to Statistic portal PepsiCo’s global workforce has grown from 19,000 people in 1965 to 263,000 people fifty years later. PepsiCo is committed to their philanthropic goals. According to Pepsico.com, their belief is thriving communities can change the world. That’s why they invest in the essential elements of a sustainable food system – helping to alleviate hunger, manage water and waste responsibly, and support women as champions of nutrition from farm to family. By doing this, they feed potential – one community at a time.
PepsiCo has been around for over 100 years and has made many critical changes with its brand but has managed to remain at the top of their industry. Pepsi has a high standard the customers hold the company to and they take that very standard very serious. Through everything Pepsi has figured out how to keep employees happy and give back to the community on a continuous basis. This organization has demonstrated that they operate in integrity which allowed them to maintain brand constancy.
- Britannica, The Editors of Encyclopedia. “PepsiCo, Inc.” Encyclopedia Britannica, Encyclopedia Britannica, Inc., 3 Jan. 2019, www.britannica.com/topic/PepsiCo-Inc.
- “About the Company.” PepsiCo, 2019, www.pepsico.com/about/about-the-company.
- Wiener-Bronner, Danielle. “Coke vs. Pepsi: Why Coke Is Winning the Cola Wars.” CNNMoney, Cable News Network, 21 Feb. 2018, www.money.cnn.com/2018/02/20/news/companies/cola-wars-coke-pepsi/index.html.
- “Who Is Pepsi’s Target Market?” Reference, IAC Publishing, 2019, www.reference.com/business-finance/pepsi-s-target-market-5e782eec7f91bfed.
- Bhasin, Hitesh. “SWOT Analysis of PepsiCo – Pepsi SWOT Analysis.” Marketing91, 27 Sept. 2018, www.marketing91.com/swot-analysis-pepsico/.
- Pratap, Abhijeet. “Pepsi SWOT Analysis.” Cheshnotes, 16 Nov. 2018, www.cheshnotes.com/pepsi-swot-analysis/.