A summary of the concern
Indra Nooyi is the CEO of pepsico, PepsiCo has done a pretty good job since she took the helm six years ago. But nowadays the CEO is taking so much heat form investors. / The financial performance of pepsico earned high profit margins, Yet for all that, the conventional wisdom is that she and pepsico are in trouble. /Investors care only about what's ahead, and they are not confident. / This is investor’s dim outlook for pepsico’s economic profit. See the chart, it implies that investors don't expect PepsiCo's economic profit to increase for years; on the contrary, they expect it to decline slowly. 1.The CEO, Indra Nooyi has destroyed the company's performance by committing too much time and money to healthy products that make a CEO the darling of the Global Initiative but that real-world consumers don't want to buy. Its all-important return on capital has plunged. Several of its most valuable brands, such as Pepsi and Doritos, have lost strength or market share, or both. 2. In an industry that survives by exciting consumers with new products, innovation has been weak; the company has introduced flavor tweaks such as Cherry Vanilla Pepsi, for example, but nothing to match Coke's hugely successful Coke Zero and attention-grabbing bottle and can designs. 3. And also Basic execution has been subpar; the company has had trouble holding its share of retailers' floor space. 4. Overhead has ballooned, leaving the company less efficient and productive than it needs to be.
An examination of measures being taken to address the situation 1.The CEO Nooyi acknowledges that pepsico has to change. (The company plan to cut 8,700 jobs through 2014 (about 3% of the total), consolidating facilities, and finding other efficiencies, saving about $1.5 billion over the next three years. ) It will increase advertising and marketing by $500 million to $600 million this year, focusing on a handful of big brands like Pepsi and Doritos in North America. The cost...
Please join StudyMode to read the full document