Position Paper: Pepsico’s Restaurants

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Position Paper: PepsiCo’s Restaurants Pepsi Co’s Restaurants is a Harvard Business School Case which states PepsiCo’s large organization, its structure, its acquisitions and management approach. It also covers two companies, Carts of Colorado (COC) and California Pizza Kitchen (CPK) which are pursued from PepsiCo in 1991 to buy. In this position paper PepsiCo’s acquiring strategy and management approach will be evaluated to examine strengths and weaknesses of acquiring these two companies and possible solutions of other strategies. It will be also qualified whether it is a successful company in restaurant business.
Pepsi’s acquiring strategy is diversified. First, it merged with Frito-Lay in 1965 and named PepsiCo. The case states the
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According to strategic planners of the company quick service restaurants would remain the largest segment over the following decade. Based on their analyses, quick service, casual dining and take out segments would be attractive. On the other hand, PepsiCo. invested to casual dining like Pizza Hut Café and experienced that their know-how for this segment is low. (Reinemund: “We needed people to come in and break the mold of our thinking. We knew enough to know what we didn’t) Additionally, Salsa Rio Grill which is also an investment for casual dining was a failure, but it has also mentioned it could be successful with a different setting. These are aspects that we have to think whether to acquire CPK. The case also mentions that PepsiCo. needed non-traditional program to increase points of distribution. That can be achieved with carts. The company also purchased carts from COC because they saw a potential future that the location of sales was really important.
If COC is acquired, than PepsiCo would acquire skills or technologies more quickly or at lower cost than they could be built in-house. This can be seen as a strength, however COC’s carts wouldn’t cover the core competence of PepsiCO, therefore its acquisition could be not cost efficient. There is also an opportunity of first mover with the know-how of COC PepsiCo could achieve the most efficient mobile storesi, might be also apply some strategies for automats. The threat was

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