Nov 6th Strategy Lecture - Pepsi Case Analysis

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Management and Organizational Studies
Management and Organizational Studies 4410A/B
Raymond Leduc

Strategy Class: Pepsi Case 11/5/2012 6:09:00 PM Pepsi currently has four divisions: - Frito-Lay North America - PepsiCo Beverages North America - Pepsi International - Quaker Foods North America Part 1 - Identify the vision, mission, and objectives for the overall company and for the international division - For the industry analysis, take a look at the main driving forces affecting the future of the beverage and snack food categories in which Pepsi competes - Identify the main Key Success Factors for these two categories - Are there similarities? Are there differences? - Identify the strategy Pepsi is pursuing - Does it make sense? - Have a very close look at the financial statements in Exhibit 1 through 4 - You know the drill in terms of what to look at and what to calculate Pepsi has described some of their plans in terms of what they want to accomplish with their strategic realignment (see the description at the end of the case). Excel spreadsheet on the course website that we can use to help examine some of the financial results. It is important that you work through the numbers and be ready to talk about the implications and whether or not Pepsi is in a financial position to move ahead with their plans. 11/5/2012 6:09:00 PM Objectives 1. Buy more stuff – p of one 2. financial performances – sustain, increase 3. Products  diversification  innovation 1. distribution relationships 2. grow international markets 3. restructuring a. pr America b. pf afic c. p int i. 5. Cash Objective  dividends  PB stock performance  Aquisications  Re-invest on core business International profitability Skills Transfer SMART? Yes probably attainable and relevant, but prob need to be more detailed ----------------------- Industry Driving Forces + opportunities on trends - salty snacks, beverages low growth, negative growth areas particular to US + tremendous global oppt Economic Traits - high fixed costs - low margins/unit Key Success Factors  product innovation  Brand reputation  Volume The KSFs in Beverages & Food are similar. Which is good because the skills are very transferrable ---------------------------------------- Main Advantage COST ADVANTAGE DIFF B YES F Brands is good in this low margin business because we can charge people to pay more. The nature of the business asks for diversification, changing consumer preferences Differentiation is a good
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