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 lemonade·s 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. Bergman·s 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 waterµ 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 sealµ. 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 WHAT·S IN SOFT DRINK?

Soft drink has been part of American lifestyle for more than 100 years. Many of today·s soft drinks are the same as the first ones enjoyed in the 1800·s.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 fizzµ 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. That·s why your favorite soft drink tastes the same in New York as it does in India. CARBON DIOXIDE

carbon dioxide is the essen tial characterizing ingredient in all ´carbonated ´beverages. carbon dioxide was made from sodium salts.A colorless and odorless gas. When dissolved in water. Today. It was the innovative step of adding flavors to these popular ´soda waterµ that gave birth to the soft drink beverages we enjoy today. FLAVORS . In these days of soft drink manufacturing. mineral water were once highly prized. Carbon dioxide gas is absorbed into flavored soft drink in a carbonator machine just before the container is sealed. soft drink may absorb up to four times the beverage volume of carbon dioxide. carbon dioxide imparts a unique taste. For that reason natural sources of carbonated. These rare mineral water were once also believed to have beneficial medicinal properties. While under pressure a nd chilled. It is given off when we breathe and is used by the plants to produce oxygen. or eff ervescent. Efforts to make and sell ´artificial effervescent mineral waterµ were underway in Europe and US by 1800. This is why carbonated beverages were called ´ sodasµ or ´soda waterµ. bottlers buy pure carbon dioxide as a compressed gas in the high pressure cylinders.

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

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

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

Aspartame.With either. Finally . 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. which is easily digested and provides calories. SACCHARIN Saccharin has many desirable proper ties that make it a valuable soft drink ingredient. about the same amount as a glass of pineapple or orange juice. and carbohydrates are an important part of the diet. It is relatively inexpensive. manufacturers can blend sweeteners to match beverage formulations and better appeal to all c onsumer tastes and preferences. sweetener. saccharin. Both sucrose and HFCS are easily digested carbohydrates. 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 ´dietµ or ´low calorieµ sweeteners. which means that it goes through the body without changing. sucrose and acesulfame K are approved for use in soft drinks today and sweeteners remain an active area of soft drink research. However. By choosing from a variety of different sweeteners. the amount of sweetener in a soft drinks ranges from 7 to 14% . They provide calories. which are the source of energy for the body. . It is stable in soft drinks and is metabolically inert. ASPARTAME Aspartame is a nutritive.

3) INVENTOR OF SODA WATER ´JOHN MATHEWSµ is the person referred to as the ´FATHER OF AMERICAN SODA WATERµ. it is a calorie free. 4) THE MAIN BRANDS IN THE INDIAN SOFT DRINK MARKET y Pepsi y Mountain dew y Miranda orange y Miranda lemon .ACESULFAME K Acesulfame k. Sucralose is a low calorie. It is sold under the brand name of ´splendaµ. under the brand name of ´sunnettµ. heat stable sweetener that is 200 times than sugar. is an example of a new diet sweetener approved for soft drinks by the FDA in 1998. high -intensity sweetener and is about 600 times sweeter than sugar. SUCRALOSE The FDA approved sucralose in 1998 for use in a wide variety of soft drink products including Soft drinks. Sucralose and sugar have been shown to have sim ilar taste and flavor profiles.

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

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

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

and the customers it seeks to serve and satisfy. we will become the most cost competitive Beverages Plant and so serve the community and the nation. Tripty drinks Pvt. the nature of the business it in.awareness of the movie as momentum buildup. a business. Triply drinks define its vision statement as follows. Mission statement of Tripty Drinks Pvt. an activity) in the future. Ltd. In the coming decade. a technology. concerning particularly why it is in existence. Its current (as of 2004) slogan is ´ask for moreµ VISION OF THE ORGANIZATION The future description of something (an organization corporate cultur e. MISSION STATEMENT Essential purpose of the organization. They are called upon to perform in the light of their individual. ´Tripty drinks Pvt. Ltd. We will establish our selves as a supplier of choice by delighting our customers with our service and our products. national or global priorities. Ltd enters the next few years with the confidence of a learning knowledge based and happy organizationµ. derive their mission statements from a particular set of tasks. .

Ltd. which an organization follows in its strategic and operational activities. Overall. Is going to conduct its business. Pvt. Consultants may also be called upon to make an in depth analysis of the organization to suggest an appropriate Philosophy statement . La y down the corporate Philosophy. Ltd and strives to strengthen India·s industrial base t hrough the effective utilization of men and materials. PHILOSOPHY The Philosophy of Tripty drinks Pvt. Discuss and decide on a corporate philosophy to be followed for strategic management. 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. profitability provides the main spark for economics activity. Ltd. 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. Tripty drinks recognize that while honesty and integrity are the essential ingred ients of a strong and stable enterprise.µ The means envisaged to achieve this are high technology and productivity. Ltd.´Consistent with the values of the Tripty drinks. Ltd. Establishes the value. believes & guidelines for the manner in which the Tripty drinks Pvt. Usually the officers of the Tripty drinks Pvt. consistent with modern management practices. Such a Philosophy may not be consciously and formally stated but may gradually evolve due to the officer·s actions.

Societal Environment: 1. EXTERNAL ENVIRONMENT A. government actions and other factors. These are specified as : (a)Interest rate on PepsiCo·s debt as well as it short -term investment portfolio: PepsiCo can manage its overall financing strategies in term of balancing investment opportunities and risks. which PepsiCo is exposed to interest rate.general environment are differentiated into the following parts which are discussed as follow: III.Question 2 General environment:. (b)Foreign exchange rate and other international economic conditions: Operating in international markets involve exposure to movements in currency exchange rates. they will cause PepsiCo to adjust its financing and operating strategies. inflation. which typically affec t the economic growth. interest rate. Economic Factor: The key elements taken into consideration are the principal market risks. Once these changes occur. Changes in currency . The company is using interest rate and currency swaps to effectively mod ify the interest rate in order to reduce the overall borrowing costs. foreign exchange rate and commodity prices.

For Pepsi. computerized manufacturing technologies are great contributions to higher efficiency and qualit y in bottling operations. British pound. macro -economic conditions in Brazil.exchange rates that would have the largest impact on translating PepsiCo·s international operating profit include Mexican peso. Mexico. Especially. Technological Factor: Development of additives such as sugar less sweeteners. 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. Canadian dollar and Brazilian real. In addition. Russia and across Asia Pacific have adversely impacted on PepsiCo· s operations. (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. and new flavorings enables PepsiCo to provide products that meet changing customer tastes and preferences. 2. a critical business challenge is ensuring that the . Through years. caffeine free products.

For instance. and move any excess inventory to areas where those products are in demand.µ Pepsi NA·s data communication network is an important element in the company·s efforts to address sales and distribution challenges with technology. What PepsiCo did at the time was . According to Jerry Gregoire. and sale sites around the U. Information Services. getting costs out of the distribution pipeline and getting products into the stores less expensively while increasing the availability of sales information. PepsiCo did business in Burma (Myanmar) under the brutal SLORC regime. 3. distribution. the State Law and Order Restoration Council. As the SLORC moved to attract international investment. Vice President. sales data helps managers identify regions where certain products are not selling well.S. and Canada. the Pepsi NA net work transports data help management in controlling inventory. Connecting nearly 330 manufacturing. ´The competitive advantage will go to the company that can apply technology to areas such as logistics. two millions people have been forced to work for no pay under brutal conditions to rebuild Burma·s long neglected infrastructure .distribution processes can deliver the right products to the right place at the right time. Political/Legal Factors: (a)The Human Right Issue: Few years ago. Sales data also helps Pepsi·s managers make decisions about products before they reach the freshness date and must be pulled from the shelf and discarded.

(c)Waste Management and Public Concerns: Growing environmental awareness is leading to increasing legislation. PepsiCo also said it helps the economy by buying "products such as mung beans. As the result. local farmers. The company·s operation is affected by federal legislative proposals that address the four objectives: -Minimize the quantity of packaging material entering the nation·s solid waste system -Minimize the consumption of scarc e natural resources . In fact. the FDA tests and certifies new ingredients such as high -intensity sweeteners before they are allowed to be used in soft drink production." T he issue addressed is whether these products were made by forced labors. (b)FDA Regulation: As a soft drink product manufacturer. 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. For example. sesame seeds and rattan from small. PepsiCo is under the control of the Soft drink and Drug Administration. Colgate and other universities because it refuses to name the sources of these farm products.patronizing the SLORC regime in what they called ´rebuild the country·s infrastructureµ. Stanford. PepsiCo had lost contracts at Harvard.

Connecticut has already passed a law t hat regulates packaging to increase its recyclability. To illustrate.8% in unit sales. In contrast to older consumers. PepsiCo switches to non-cola products such as bottle -water. With age. ready-to-drink tea and sports drinks. Age and ethnicity are two main characteristics that affect consumer preference for soft drinks and alternative beverages.-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. bottled water gained the market share up to 12. In turn. Socio-cultural Factor: Consumers today are not as much joyous to cola products as they were before. younger consumers ³particularly teens and those in their twenties ³have less attention spans for products and are more likely to prefer products that seems to be fun and different . health concerns become more of a factor when choosing a beverage. some studies show that cola products or soft drink in general may cause kidney stones and other related diseases. . As the m atter of fact. it lost is market share in 2000 as consumers seek for alternative beverages. 4. For example. Although PepsiCo is the number one seller in carbonated beverages.

Acco rding to the Beverage Industry. Will new entrants be able to spend a tremendous amount to advertise themselves. Another aspect is the distribution challenging in some Asian countr ies such as .B. other companies such as Coca -Cola and Cadbury Schweppes have to go on the same path.1 million on media advertising in the U. Therefore. Coca-Cola Co.S.. to create their ´big namesµ in order to deprive the market shares from PepsiCo or Coca-Cola. not only PepsiCo is the one who have to spend a tremendous fund on advertising campaigns. 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. or in other words. market between January and September 1996. competing on a national or global scale requires t he ability to manufacture and distribute a well recognized brand. and Cadbury Schweppes spent a total of $469. However. Task Environment: 1. PepsiCo. PepsiCo had a great number of commercials during the super -bowl.

Pepper and 7UP brands in 1995.Pepper&7UP 3 2. soft drink market in 1998 vs.4%.491.S.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.40 1.157.4 30.Pepper & 7UP goes down slightly in 2000 at 14.9% . 2000.50% 14.50% 2.5 43.S.060.1 14. Table below shows that the top three firms accounted for 90% of the U. the industry saw the emergen ce of a third significant player when Cadbury Schweppes acquired the Dr.20 3. Coca-Cola Co.4% Cott 4 357 300 2.370. There are some changes on market shares to other companies but the changes are not significant. The top one is still Coca -Cola with market share of 44% in 2000. and global soft drink industries are quite concentrated. 2 4. where poor road conditions and other infrastructure problems may prevent the effective delivery by trucks.80% 30.473.China.223. and PepsiCo.0% PepsiCo Inc. 1 6.9% Dr. Existing Companies: The U. U.9% share. next would be PepsiCo with 30. 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.90 4. Indonesia and India. Dr. 2. Long dominated by two companies.80% 44.

Although colas are the most important soda flavor on the market.5 11. Instead of drinking cola pr oducts. consumers· tastes change over the time.0 1.00% 0.Trends: The market for soft drink is expected to grow at a slower rate in the next four years. Ocean Spray grants a ten -year license to Huiyuan manufacture. Competitors may take this advantage to market their products. the strongest growth in the industry is in the non-cola segment. market and distribute its products. according to a series of new global soft drink reports published by Beverage Marketing Corporation.1% Royal Crown 6 254.7 0.20% 0.0% between 1993 and 1998. consumers switch to water or fruit juices.3% As discussed in Social -cultural Factor part.0% Monarch 7 138. . One example is the agreement between Ocean Spray Cranberries Inc. 3. The industry had a five -year compound annual growth rate (CAGR) of 5.3 1.6 106. But for the five -year period from 1998-2003.1% Big Red 9 32 26. which is the largest juice company in Chi na.80% 1.90% 2. and Beijing Huiyuan Beverage Group. the CAGR is estimated to drop to about 4%.National Beverage 5 270 214.8 1.

Cheetos brand cheese-flavored snacks. Fritos brand corn chips and Cheetos brand cheese -flavored snacks. Many of our U. sells and distributes salty and sweet snacks. The company is engaged in the snack soft drink. Each product category is further divided into North America se gment³US and Canada³and international segment. Doritos and Tostitos b rand tortilla chips. markets. New York. INTERNAL ENVIRONMENT A. Fritos brand corn chips. soft drink and juice businesses. ØFrito-Lay International (FLI) Frito-Lay International manufactures. Low -fat and no-fat versions of several brands are also manufactured and sold in North America.S.IV. markets. sells and distributes salty and sweet snacks. Doritos and Tostitos brand tortilla chips. brands have been introduced internationally such as Lay·s and Ruffles brand potato chips. a variety of branded dips and salsas and Rold Gold brand pretzels. (PepsiCo 2000 Annual Report) ØFrito-Lay North America (FLNA) Frito-Lay North America manufactures. Corporate Structure PepsiCo owns its corporate headquarters buildings in Purchase. Products manufactured and sold in North America inclu de Lay·s and Ruffles brand potato chips. Sabritas brand snack soft drinks and Alegro and Gamesa brand sweet snacks in Mexico. Products include Walkers brand snack soft drinks in the United Kingdom. Smith·s brand snack soft drinks in Australia. .

markets and distributes ready -todrink tea and coffee products through joint ventures with Lipton and Starbucks and licenses the processing. PCNA also sells syrups to national fountain accounts.Principal international snack markets include Mexico. Mirinda. Australia and South Africa. Argentina. Slice. Sierra Mist and other brands for sale to franchised bottlers. Mug. Principal international markets include Mexico. Mountain Dew. ØTropicana . PCI markets and promotes its brands internat ionally. PCI operates bottling plants and distribution facilities in various international markets for the production. the United Kingdom. ØPepsi-Cola North America (PCNA) Pepsi-Cola North America manufactures concentrates of brand Pepsi. ØPepsi-Cola International (PCI) Pepsi-Cola International manufactures concentrates of brand Pepsi. Mountain Dew and other brands internationally for sale to franch ised bottlers and company -owned bottlers. distribution and sale of company -owned and licensed brands. Thailand. Brazil. In addition. Saudi Arabia. distribution and sale of Aquafina bottled water. China. the United Kingdom. PCNA markets and promotes its brands. KAS. PCNA also manufactures. 7UP. India. Fruitworks. the Netherlands. PCNA manufactures and sel ls Dole juice drinks for distribution and sale by Pepsi-Cola bottlers. Spain. the Philippines and Brazil. Spain.

Looza and Copella are also available in Europe. Corporate Culture PepsiCo. sells and distributes its juices in the United State s and internationally. 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. losing has its penalties. asking consumers to compare the taste of the two colas. Pepsi's marketers now take on Coke directly. Severe pressure was put on managers to show continual improvement in market share. Season·s Best. The culture of the company now is based on the goal of becoming the number one of soft drinks. Many of these products are distributed and sold in Canada and brands such as Fruvita. Principal international markets include Canada. to work harder and to wring more profits out of their businesses.Tropicana produces. But today. and profits. All Employees know they must win merely to stay in place ³ and must devastate the . In its soft -drink operation. ‡Managers are pitted against each other to grab more market share. Products primarily sold in the United States include Tropicana Pure Premium. product volume. Inc. is the surest path to success. Because winning is the key value at Pepsi. Tropicana Twister and Dole brand juices. offering Pepsi as a cheaper alternative to Coca -Cola. ‡Once the company was content in its number two spot. B. the United Kingdom and France. whether outside or inside the company. a new employee at PepsiC o quickly learns that beating the competition. markets. for example.

and it is mounting a challenge to Coca Cola overseas. principally by company -owned trucks.competition to get ahead. The staff is kept lean and managers are moved to new jobs constantly. 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. ‡To keep everyone on their toes. Corporate Resources 1. This system permits the company to work closely with retail trade locations and to be responsive to their needs. whereby its sales force delivers the products directly from distribution centers to the store shelf. "creative tension" is continually encouraged among departments at Pepsi. oversee the quality . promotion and advertising programs that support the its many brands and brand image. The company utilizes a direct store delivery system. ‡ The company·s products are transported from manufacturing plants to its major distribution centers. when it granted a bottling franchise in Israel. it has dominated the Arab Middle East ever since Coke was ousted in 1967. Marketing: ‡ Pepsi has now beaten Coke in the domestic take -home market. C. ‡ PepsiCo has developed the national marketing. Pepsi has been maki ng inroads: Besides monopolizing the Soviet market. which results in people working longs hours and engaging in political maneuvering just to keep their jobs from being reorganized out from under them.

45 ‡ Each division boosts Q4 volume. and gains market share for the year ‡ Net sales advance 8% to over $6 billion for the quarter. On the Ratio PepsiCo just only 33% on debt/equity ratio and profit margin is 10. annual . Net income increased 18% ($498 million). net sales increased 8% to $4. Even though sales of PepsiCo were going down slightly on the last three years but they still have very high profits on that years.9 compare with industry just only 8. Inc. Revenues benefited from volume gains across all divisions. develop new products and packaging. (PepsiCo 2000 Annual Report) 2.10%.of the products.54 billion.). markets and sells soft drinks and concentrates (Pepsi-Cola. For the 12 weeks ended 3/24/01. Finance: PepsiCo.5 b illion with earnings per share increasing 17% to $. etc. On the first quarter of this year net sales advance 8% to over $4. and coordinates selling efforts. snack soft drinks (Frito-Lay) and Tropicana branded juices. ‡ EPS grows 15% in the 16-week quarter to 38 cents. annual sales grow 8% and exceed $20 billion ‡ Every division posts double -digit operating profit growth in the quarter. Mountain Dew. PepsiCo is very strong revenue growth. manufactures. Net income also reflects an increased gross profit due to higher effective net pricing. and 17% for the 52 -week year to $1. Slice.34.

and create new opportunities for every PepsiCo .operating profits advance 13% to $3. which is expect to complete in the second quarter of 2001.7 billion ‡ Return on invested capital (ROIC) improves to 23% -. The DSD systems give the company the ability to merchandise its products for maximum appeal to consumers. Gatorade and Quaker. For example. Operations: ‡ Most of the sales are through the company·s own direct store distribution (DSD) systems. in January 2001 the com pany acquired a majority of the South Beach Beverage Company. where they actually take the products to stores and put them on the shelf. from the tiniest liquor stores to the mightiest club store. non-carbonated beverages. 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. These systems reach hundreds of thousands of outlets. which strengthen the company·s portfolio and enhance its vitally important innovation capabilities.5 billion ‡ Operating cash flow grows 33% to $2. This is without question the biggest step to ensure a bright future of growth for PepsiCo. ‡ Another example is the planned merger with the Quaker Oats Company. ‡ PepsiCo has been adding new platforms for growth. It will add two very powerful brands to its portfolio.a 250 basis point increase ‡ 2001 outlook for continued double -digit earnings growth 3. The merger will make PepsiCo an even more effective competito r in the expanding market for convenient soft drinks and beverages.

" by Hispanic magazine to its list of "The Hundred Companies Providing the Most Opportunities to Hispanics. recycling and energy use programs that promote clean air and water and reduce landfill. the people out there serving the cus tomers 365 days a . 4. ‡ We were named by Fortune magazine to its list of America's "5 0 Best Companies for Minorities." and by Minority MBA magazine to its list of "Ten Top Companies for Minority MBAs. PepsiCo minority and women business development programs were rated among the top -10 nationally by the National Minority Supplier Development Council.division. Human Resources: ‡ The company has a wealth of talent across the corporation. ‡ PepsiCo bought $383 million worth of goods and services from minority -owned and women-owned suppliers in the year of 2000. Last year. The combined enterprise will rank among the world's fiv e largest consumer product companies. 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." by Latina Style magazine to its list of "The 50 Best Companies for Latinas." The company encourages conservation. It starts with its exceptional frontline team. The Women's Business Enterprise National Council named the company among America's Top Corporations for Women's Business Enterprise.

results-oriented environment. ‡ Pepsi executives are expected to be physically fit as well as mentally alert: Pepsi employees four physical-fitness instructors at its headquarters. treasury. experience. such as information technology. The company encourages one-on-one sports as well as interdepartmental competition in such games a soccer and bask etball. public affairs. but the skills. human resources. and it extends to our corporate staff. .year. audit. PepsiCo has installed a computer system that links an effective wide area network that allows immediate transmission of customer orders. the company offers a highly competitive compensation and benefits package. The company not only has great opportunities. accounting. All successful applicants share a commitment to PepsiCo's goals and an ability to thrive in a fast-paced. tax. dedication and intellectual horsepower to make the most of them. ‡ The company·s continued growth has created outstand ing career opportunities for talented professionals in a variety of specialized fields. It is an unwritten rule that to get ahead in the company a manager must stay in shape. Information Systems: ‡ In responding to market demands for efficient 24 -hour "order-to-delivery" process for customer orders. law. transmit accurate. ‡ The outcome has been to integrate with a wide area network. In exchange. 5.

If people know how m uch profit is gain by soft drink than they want to open a new soft drink in world.there are many substitutes of cold drinks like coca-cola. The cost of the items which are provided by the suppliers can have a major impact on the organizations .complete customer order data. Bargaining power of supplier: . allowing the company to more efficiently load trucks. If the substitutes provide a soft drink in high price than it is a ve ry good opportunity for our business. 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. When the new soft drink will come in the industry than soft drink may lose their customers and its attractiveness. Threat of substitutes:. 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 porter·s view that in a soft drink.Suppliers plays very vital role in order to make profit in a business. 3. appy fizz etc. Supplier provide raw material into a business. It also have threat of new entrants. 2.. 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. the competition is very high.

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

and threats. whereas an organizational weakness is an internal characteristic that may undermine your performance. opportunities. weaknesses. An opportunity is an external market situation that offers potential for helping the organization meets its objectives. opportunities. which stands for strengths. external opportunities. An organizational strength is an internal capability that the organization can exploit. This is due to the . and threats and the potential impact of these factors on the organizational performance. which is known throughout the world for its excellence.Organizations often structure their situation analysis according to the acronym SWOT. 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 . Strengths The biggest strength of the organization is th e brand name of Pepsi. to achieve objectives. weaknesses. and threats compare with those of their competition .Organizations can use SWOT analysis to see how their strengths. In contrast. SWOT ANALYSIS OF PEPSI COLA SWOT analysis is a situation analysis tool that helps the managers to identify internal strengths and weaknesses. 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.

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

while the plants in Lahore.000 crates per day. 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. Haidri Beverages do not have a lot of weaknesses but there are some areas that have been ignored by the organization. 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.than 80. an Opportunities . So far the company has not been able to access the rural areas and this provides opportunity for the competitors. Pepsi for long holds the reputation of making attractive and innovative advertising. distribution and sales of Pepsi in a huge province.000 crates a day. Gujranwala and Karachi can produce up to 110. The failure of its Quetta plant due to the differences among the owners has also affected the production. 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. Weaknesses A weakness is an internal characteristic that may undermine performance. These include the following weaknesses: The availability of packa ges is sometimes difficult for the organization to maintain.

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

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

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

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