Colorado Technical University
Number 1 challenge at PepsiCo and what is working:
The number one challenge that PepsiCo is facing is the rapidly changing global economy particularly the slowing U.S. economy. Although, PepsiCo businesses have generally proved resilient in past down turns, it is unclear where they will land during the current slide. To combat the challenges, PepsiCo is going to utilize all tools at their disposal from a productivity stand point, to research better product formulas and ingredient sourcing. They are always coming up new products and new marketing ideas. They have dedicated themselves to offering consumers a wide variety of choices for healthy and convenient snacks / beverages. PepsiCo also balances strong financial returns with giving back to communities in the U.S. and abroad. These returns to the communities have earned them named for the fourth time to the Dow Jones Sustainability World Index and for the fifth time to the Dow Jones Sustainability North America Index in 2010. They were also a top performer in the beverage sector. (PepsiCo, 2012). To ensure that PepsiCo can continue long into the future, it is making considerable efforts and strides to protect the environment it utilizes. In 2010, it launched the Dream Machine, a recycling partnership with three other companies. The partnership has a goal of increasing U.S. beverage container recycling rate from 38 % in 2009 to 50% in 2018. PepsiCo is also engaged in water conservation and efficient agricultural methods. These efforts are not only sustained by PepsiCo’s operations in the U.S. but also in global markets. (PepsiCo, 2012).
Implantations of management strategies:
Here are four strategies that are helping increase revenue thru operational efficiencies: One strategy that PepsiCo has implemented is called the “Power of One” The “Power of One” is not limited to any one market. It has U.S. and global economic relevance. What the “Power Of One” does is to combine two high product lines such as snacks and beverages, by combining the high demand of global and local brands PepsiCo becomes a must have partner for large and small retail chains. The “Power of One” philosophy offers these large and small retailers high volume of product turnover, excess in marketing, merchandising through advertisement. The customer recognition of these high volume products will also help retailer’s future growth by drawing consumers into their establishments where other purchase may be made. (PepsiCo, 2012). Distribution of global brands is another. PepsiCo has made considerable efforts while promoting their global brands not to lose the local flavor if you will. Their research and development teams have worked with many local chefs around the world to insure that the products put out in the specific markets kept their local relevance (As they say when in Rome…). Examples of this relevance is a Lays offering a red-caviar flavor in Russia or the introduction of Cao Ben Le ( happy herb ) beverages incorporating traditional Chinese medicinal herbs in China. (PepsiCo, 2012). Creating affordable products is another strategy that is continually being invested in. With the weakening economy worldwide PepsiCo has realized the need to offer products that their target consumers can afford. PepsiCo’s revenue management realizes the need to tailor to the masses. Thus, PepsiCo has adapted packaging sizes and prices to meet the needs of the individual markets. Lucky snacks in Brazil are sold by street vendors and in April of 2011 there was non-carbonated beverage sold in India for what equated to eleven cents. (PepsiCo, 2012). PepsiCo also employed another strategy called strengthening of advantaged local supply. In short, they have partnered up with local farmers, markets, grocers and such, in an effort to stay proactive ahead...