Pepsico Case Study

The following is a case study referring to two major soft drink organizations. These two major organizations have been popular throughout their life time. But before getting into all of that first let 's have a background to both of the companies so let 's begin with PepsiCo. It began with the merger of Pepsi-Cola and Frito-lay. Caleb Bradham was the creator of PepsiCo. Donald M. Kendall, former president and CEO of PepsiCo, he was the present and also chief executive officer. Another huge announcement that PepsiCo had was acquiring Quaker Oats, so PepsiCo would gain access to Gatorade and control 83.6 percent of the sport drink market. PepsiCo would control around 33 percent of the U.S. uncarbonate-beverage. Now giving the background to Coca-Cola their annual sales were around 20.5 billion, and market value reached 110.1 billion. The company was the largest manufacturer and distributed, and marketer of soft-drink concentrate and syrups. One of the main reasons for this was the company 's strategy of spinning off its bottling operations to avoid consolidation on is balance sheet.

1. What is PepsiCo’s corporate strategy? Briefly identify the business strategies that PepsiCo is using in each of its consumer business segments in 2008.

Pepsi –cola was started in the summer of 1898 in New Bern, North Carolina by Pharmacist Caleb Bradnham. PepsiCo Inc. started in 1965 with the merger of Pepsi-Cola and Frito-Lay. Since then, PepsiCo has continued to grow, adding new brands and product lines meeting the demands of the market. Throughout the years, they have strived and worked toward environmental sustainability. The ability to be financial stable gives PepsiCo the ability to give back and donate to those communities they are located in. PepsiCo’s mission to provide performance with purpose means delivering sustainable growth by investing in a healthier future for people and our planet. PepsiCo is continually increasing their triple bottom line.

On January 24, 1986, PepsiCo revealed that they had a plan to purchase the Seven-Up Company from Phillip Morris Companies, Inc. for $380 million. A month later this huge acquisition led to the Coca-Cola company proclaiming that they intended to purchase the Dr. Pepper Company for $470 million. During this time Coca-Cola was the leader in the soft drink market and held the largest market share of thirty eight percent (38.6% in 1986 to be exact). In comparison Pepsi was the number two supplier of soft drinks in the market and respectively trailed Coca-Cola with a market share of twenty seven percent (27.4% in 1986). Both companies greatly competed on price, which ultimately led to lower prices and amplified partnership in the soft drink industry. Price discounting and effective promotion and marketing were fundamental in distinguishing products within this highly competitive market. The ability to introduce new products also proved to be imperative in gaining market share as it is in any market if you want to be successful as a major market player or competitor.

PepsiCo is widely known as one of the largest snack and beverage companies in the world. In 1965 Pepsi-Cola and Frito-Lay merged. Pepsi-Cola was a widely successful soft-drink company and Frito-Lay specialized in snack food. It was in 1898 when a pharmacist from New Bern, North Carolina, Caleb Bradham created the carbonated beverage called Pepsi-Cola. Frito-Lay was created in 1932 when a man named, Elmer Doolin from San Antonio, Texas started to manufacture corn chips; called “Fritos”. (Gamble) These two came together to establish the successful company we know today as PepsiCo, Inc. Six years after the merger took place in 1965; PepsiCo had doubled their initial annual revenues to $1 billion. This was due to an aggressive growth strategy

The purpose of this case study is to assess the internal and external environment analysis and management function of The Coca Cola Company. Since 1998, the company has been struggling evolved their internal weaknesses and external threats day by day. Management strategy is the key concept for The Coca-Cola Company to survival and continue the business.

1.) Why do companies like Pepsi need to globalize? What are the various ways in which foreign companies can enter a foreign market? What hurdles and problems did Pepsi Face when it tried to enter India during the 1980s?

PepsiCo, Incorporated is one of the largest Fortune 500 companies in the world. It got its start as the Pepsi Cola Company in 1898 when a pharmacist from Chinquapin, North Carolina. A pharmacist named Caleb Bradham invented the Pepsi Cola soft drink. The soft drink was originally named “Brad’s Drink” but was later renamed “Pepsi-Cola” combining the terms “pepsin” and “cola.” Along with selling the soda concoction the many soda fountains, Bradham also bottled and sold the drink in his own stores. Later, he would shut down his drugstore and focus entirely on the soft drink enterprise. Over the next few years the company would grow, earning more and more distributors in its expansion. By 1910 the company had signed agreements with 250

Coca-Cola is an international household brand. Created in 1886, pharmacist and inventor Don S. Pemberton’s now popular beverage made its first debut at Jacob’s Pharmacy in Atlanta, GA. The syrup concoction, which gained its name from Pemberton’s bookkeeper, was mixed with carbonated water and served as a fountain drink. Dr. Pemberton did not conceive the potential of his new invention, because of this he sold shares of the business to various partners Journey Staff, 2017). However, one investor, Asa Candler, a future mayor of Atlanta, savvy business man, and the first president of the Coca-Cola Company, did see the potential and worked diligently to acquire all the rights and control of the business. Eventually Mr. Candler achieved his goal, and in 1893 the Coca-Cola Company was incorporated as a Georgia corporation. By 1895 the meager beginnings of selling nine drinks a day had transformed into a successful brand which was sold in every state and territory in the U.S. (Journey Staff, 2017).

Pepsi started its journey in 1998.It was invented by a pharmacist named ‘Caleb bardham’. This brand is operating business in more than 200 countries.

Schultz, E. J., 2016. Coke Replaces 'Open Happiness' With 'Taste the Feeling' in Major Strategic Shift. [Online]

In 1898, Bradham Caleb, a pharmacist, experimented using different chemical substances from spice, juice, and syrup. Eventually, he succeeded by inventing Pepsi-Cola (“The Pepsicola Story”). “The Pepsicola Story” article reported that Bradham enhanced his invention by adding mixtures of vanilla, kola nut, rare oil, and carbonated water. From a fountain in his shop, Bradham sold the mixture to people and it became popular. The customers named the product Brad’s drink, but he later renamed it Pepsi-Cola (“The Pepsicola Story”). Due to product acceptance and an increase in sales, Bradham formed the Pepsi Company in 1902 (“The Pepsicola Story”). His business continued to grow and he introduced the bottling concept to make

Pepsi-Cola was established in late 1890s by a pharmacist named Caleb Bradham. The company initially used to manufacture and sell only carbohydrate beverages but after certain of its existence it expanded into snack foods. Pepsi- Cola introduces many new products in the market such as Diet- Pepsi, Mountain

Long before now has branding been considered as one of the peripheral aspects of business. Manufacturers, investors and other key players focused on the product without paying much attention to the consumer. But as the business landscape got tougher, marketing became not just an integral part of business but one of the fundamental principles of success.

The spinning off the restaurant divisions, in my opinion, is a success for PepsiCo. Although Yum! Brands has been a quite successful, thriving company with record setting growth and profitability, I would still support the decision today. PepsiCo had too many oars in the water with the beverage business, the snack business (Frito Lay) and the fast food restaurant business. It could not successfully manage all the diversity it had acquired. I commend the management team’s decision (led by, then President/CFO, Indra Nooyi and now Chairman/CEO) (Fox News 2012) to cut a highly potential part of its business off and to implement a strategy to focus on its main products and their distribution. This strategy has proved to be the right move for this organization. Below is a table which illustrates the fluctuations with the stock price from the first acquisition of Pizza Hut through October 31, 2014 (though the stock price posted on 11/3/2014). You can see that the acquisition years (in yellow) show a negative impact on the stock price, with two of the three being significant. You should also note that, in the year of divesture,