In 2007, PepsiCo is the worlds largest snack and beverage company.

((Thompson, Strickland, Gamble, C346) The company was established in 1965 as the result of the merger of Pepsi-Cola and Frito-Lay. ((Thompson, Strickland, Gamble, C-347) They have grown through acquisitions and mergers with companies like Taco Bell, Kentucky Fried Chicken, Quaker Foods, Lipton and Tropicana. The company has had three CEOs since 1997 and each contributed significantly to the growth and changes of the company. Roger Enrico was at the helm during the growth of the restaurant group and remained there until 1997. ((Thompson, Strickland, Gamble, C-349) In 1997 Steve Reinemund was instrumental in the spinoff of the restaurant group and the acquisition of Tropicana and Quaker Oats. Upon his retirement in October of 2006, Indra Nooyi a woman - who had worked along-side Reinemund, was named CEO and is still in that position today. ((Thompson, Strickland, These spin-offs and acquisitions have created a very diverse product line for PepsiCo, and is one of the reasons for their success; they have placed themselves in most American households. Among their top products are Mountain Dew, Lays Potato Chips, Gatorade, Pepsi/Diet Pepsi, Tropicana beverages, Doritos, Lipton Teas, Quaker Foods and Snacks, Cheetos, Mirinda, Ruffles, Aquafina Bottled Water, Tostitos, Sierra Mist, 7-Up, Fritos Corn Chips and Walkers Potato Chips. (PepsiCo, 2010) An international company, PepsiCo had an estimated $108 Billion in retail sales during 2009; a year in which the economy directly affected consumer spending the company still saw a growth in net revenue of 5%. (PepsiCo) Besides the economy, also affecting sales in the United States is the focus on health and diet. The company has had to respond to consumer demand and ever changing tastes. Not only must they respond to new health trends but also to cultural differences and tastes.... I. Executive Summary In1898, Caleb Bradham created the Pepsi Company (PepsiCo). The Pepsi-Cola Company merged with other companies (Frito-Lay, Tropicana and Quaker Foods to list a few) between 1965 and 2001 and is now referred to as PepsiCo, Inc. PepsiCo, Inc. has many headquarters worldwide for the several different companies. The main world PepsiCo headquarters residing in New York. These mergers made PepsiCo, Inc. a refreshment and snack company ranking 5th in the world (Pepsi). PepsiCo, Inc. is listed on four stock exchange markets. In 2006, they reported over $35 billion in revenues and listed having 168,000 employees (PepsiCo2). II. Table of Contents III. Supply, Demand and Price Analysis..Page 5 Company Introduction Page 5 Product description Page 5 Factors affecting supply, demand and price of product Page 6 Elasticity of demand and price for product Page 6 Suggested initiatives to improve

Pepsico Case Study

1. What is PepsiCos corporate strategy? Briefly identify the business strategies that PepsiCo is using in each of its consumer business segments in 2008. PepsiCos corporate strategy had diversified, in 2008, the company into salty and sweet snacks, soft drinks, orange juice, bottled water, and ready-to-eat drink teas and coffees, purified and functional waters, isotonic beverages, hot and ready-to-eat breakfast cereals, grain-based products, and breakfast condiments. Strategies that kept their brands at the top were tied to new product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. A new element of PepsiCos corporate strategy was product reformulations to make snack foods and beverages less unhealthy. Their belief that its efforts to develop good-for-you or better-for-you products would create growth opportunities from the intersection of business and public interests. The company was organized into four business divisions which all followed the corporations general strategic approach. Frito-Lay North America manufactured, marketed, and distributed such snack foods as Lay potato chips, Doritos tortilla chips, Cheetos cheese snacks, Fritos corn chips, Quaker Chewy granola bars, Grandmas cookies, and Smartfood popcorn. The PepsiCo Beverages North America beverage manufactured, marketed, and sold beverage concentrates, fountain syrups, and finished goods under such brands as Pepsi, Gatorade, Tropicana, Lipton, Dole, and SoBe. PepsiCo International manufactured, marketed, and sold snacks and beverages in approximately 200 countries outside the United States. Quaker Foods North America manufactured and

marketed cereals, rice, pasta dishes, and other food items that were sold in super markets. 2. What is your assessment of the long-term attractiveness of the industries represented in PepsiCos business portfolio? What is your assessment of the competitive strength of PepsiCos...

Pepsico
Assessment of the competitive strength of PepsiCos different business units: PepsiCos creation of the corporate strategy to diversify the company into four business division composed of Frito-Lay North America(FLNA), PepsiCo Beverage North America(PBNA), PepsiCo International, and Quaker Oats North America(QONA); developed growth opportunities from the intersection of business and public interest. The keys to product innovation, close relationships with distribution allies, international expansions, and strategic acquisition are the four organized division. Frito Lay North America (FLNA) accounts for 29 percent of the total revenue, 36 percent of the companies operating cost, and account for more than 70 percent of Americas salty snack food industry. In 2007, its net revenue total was 11,586 and operating cost 2,845. This year net revenue total is 12,507 and operating cost 2,959. Showing a 7 percent increase in the total revenue from 2006 to 2007 and an 8 percent increase this year for its net revenue; operating cost increased 9 percent in 2007, this year with a slow increase of 4 percent. The three keys that shape this industry are the growing awareness of nutritional content of snack foods, convenience, and indulgent snacking. PepsiCo Beverage North America (PBNA) is the largest seller of liquid refreshments in the Unites States. The beverage division contributes to the overall profitability and free cash flow. This segment account for 28 percent of the total revenue and 31 percent of its profit, net revenue totaling 11,090 and operating cost 2,487 which was a7 percent increase from the previous year. This increase is due to the broadened lines of noncarbonated beverages such as Lipton ready-to-drink teas, Propel, Aquafina, Gatorade, Tropicana fruit juice, Dole, Starbucks cold coffee, and SoBe. The last quarter decline in net revenue to 10,937 and operating cost 2,026 is a result of the 2.6 percent decline in the market share of the carbonated... Synopsis PepsiCo was the parent company of Pepsi Cola International, its food and beverage brands were present in 150 countries and it operated mainly in three market segments: Soft Drinks, Snack Foods and Restaurants. Pepsi Cola International represented the soft drink aspect of PepsiCos business. Pepsi Cola started its international expansion via a subsidiary in Canada in 1934, then expanding to 61 countries in 1956 and spreading to the Soviet Union in 1972 and China in 1981. This expansion into the international market was due to two reasons: the size and potential for growth of the relatively under-utilized international market and the slowdown in the U.S soft drinks markets annual growth. Pepsi Cola decided to compete internationally with Coca Cola by investing in market segments that were fast growing and yet in their infancy such as diet soft drinks, fountain and wending machines. To further expand its growth PepsiCo Inc. bought 7-Ups international... of $510 million. PepsiCo was the world's largest snack and beverage company, with 2007 net revenues of approximately $39.5 billion. The company's portfolio of business in 2008 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Cap'n Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed product. Through 2007, the company's top managers were focused on sustaining the impressive performance that had been achieved since its restructuring through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. Issues Although the company held large market shares in many international markets for beverages and salty snacks, it had been relatively unsuccessful in making Quaker branded products available outside the USA. This is a major concern of PepsiCo executives as well as shareholders. The next most important...