Case Study of Pepsi

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A. Corporate Overview and Financial Performance:

PepsiCo, Inc. is one of the most successful consumer products companies in the world, with 2000 revenues of over $20 billion and 125,000 employees. The company consists of: Frito-Lay Company, the largest manufacturer and distributor of snack chips; Pepsi-Cola Company, the second largest soft drink business and Tropicana Products, the largest marketer and producer of branded juice. PepsiCo brands are among the best known and most respected in the world and are available in about 190 countries and territories.

In 2000, PepsiCo has a reported net sale of $20,348 and a comparable net sale of $20,144 in comparison to its 1999’s net sales of $20,367 and $18,666 respectively. PepsiCo has increased its comparable net sale of 8% in 2000 while it had an increase of 15% in 1999. This reflects the increasing rate is going slower. On the other hand, PepsiCo’s interest expense declines 39% showing that the company is significantly lower the average debt level. Back to 1999, the report shows that the company’s interest expense dropped 8%, which indicates that the company is performing well in managing its financial strategies. More details about the financial performance of the company will be discussed in the later part of this paper.

B. Strategic Posture:

1. Mission:

PepsiCo's overall mission is to increase the value of shareholder's investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity.

2. Objectives:

PepsiCo’s overriding objective is to increase the value of our shareholders' investment through integrated operating, investing and financing activities. Their strategy is to concentrate their resources on growing their businesses, both through internal growth and carefully selected acquisitions. Their strategy is continually fine-tuned to address the opportunities and risks of the global marketplace. The corporation's success reflects their continuing commitment to growth and a focus on those businesses where they can drive their own growth and create opportunities.

PepsiCo believes that as a corporate citizen, it has a responsibility to contribute to the quality of life in our communities. This philosophy is put into action through support of social agencies, projects and programs. The scope of this support is extensive -- ranging from sponsorship of local programs and support of employee volunteer activities, to contributions of time, talent and funds to programs of national impact. Each division is responsible for its own giving program. Corporate giving is focused on giving where PepsiCo employees volunteer.

3. Strategies:

As a consumer products company, PepsiCo does not have the major environmental problems of heavy industry. Their biggest environ-mental challenge is packaging generated by their products. Packaging is important to public health and a critical component of the distribution system that delivers products to consumers and commercial establishments. To meet both consumer demand and safeguard the environment, they recycle, reuse and reduce packaging wherever possible. Each business is also committed to responsible use of resources required in manufacturing their products.

Continually fine-tuned to address the opportunities and risks of the global marketplace. Concentrate our resources on growing our businesses, both through internal growth and carefully selected acquisitions. Company developed its traditional products and expanded into low-fat and no-fat snacks as well as salsas and dips.

4. Policies:

• Employee networks to mentor and support minority & female employees....
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