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PepsiCo

Juan Hernandez

BUSI 1301-IM1

PEP

PepsiCo is one of the biggest multinational food and beverage cooperations in the world. It is headquartered in Harrison, New York, and its CEO is Ramon LaGuarta.

What is PepsiCo?

To provide consumers around the world with delicious, affordable, convenient, and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats.

Mission Statement

PepsiCo was created in 1965 when Frito-Lay and the Pepsi-Cola brand merged, becoming the 2nd biggest food and beverage company.

The Merge

History

  • In 1966 Doritos and Mountain Dew were launched, they entered the Japanese and Eastern Europe market.
  • In 1972 PepsiCo reported 1 billion dollars in revenue.
  • In 1975 PepsiCo reports 2.3 billion dollars in revenue and is listed on the NYSE at $1.03.
  • In 1985 PepsiCo reports 8.1 billion dollars in revenue and is listed on the NYSE for $4.04.
  • In 1989 PepsiCo enters the top 25 of fortune 500 companies.
  • In 2005 PepsiCo reports 32.6 billion dollars in revenue.
  • In the 2010's PepsiCo starts focusing on clean and energy efficient distribution methods.
  • In 2018 current CEO and chairperson Ramon LaGuarta was named.

Good Business

Ethics

PepsiCo has a global code of conduct in place that prioritizes good ethical decisions. They believe that operating under their global code of conduct they can build trust in investors, consumers, employees, and the communities in which they operate. They are considered by many media outlets to be one of the most ethical companies in the world and they have been awarded numerous awards, and they do tons of market research to find products that will sell in markets across the world.

In 2007 Aquafina, a bottled water brand sold by PepsiCo were accused of falsely advertising purified tap water as natural spring water. They were forced to change the labels to say, "acquired from a public source", because people are more likely to buy spring water over tap water. This is a good example of false advertising and a poor ethical decision by a huge company.

Bad Business Ethics

PepsiCo uses demographic and geographic segmentation to market their products. They target certain age groups for certain products, for example Doritos and Mountain Dew are targeted at teens, kids, and gamers. They share a partnership with the immensely popular video game franchise Call of Duty, and reward consumers with digital products in game for purchasing certain specially, marked packaging. An example of geographic segmentation they use is the making of special variations of products like chips and drinks not found in other parts of the world. For example, Japan and China have shrimp flavored chips and other exotic flavors of products that you would not normally find in the United States.

Marketing and Business Strategies

Operations

PepsiCo uses 10 strategic decision areas when it comes to operations. They design Goods and services by trying to match the market demand and preferences. They care a lot about quality control and efficiency along with Human Resources, Scheduling, and the workforce. These are all vital parts of PepsiCo’s operations. They also consider the supply chain, keeping up with inventory and strategically place manufacturing and distribution facilities so that the supply chain will not be disrupted. All these decisions are made so that the company can run smoothly and produce efficiently. At PepsiCo productivity is measured by Batches per facility per day produced. New products released per year and new accounts acquired per year. The way PepsiCo operates and the factors they consider when making business decisions lay the foundation for a remarkably successful company.

COVID-19 Recession

PepsiCo was relatively unaffected by the recession compared to their biggest competitor, Coca Cola. The reason for this is PepsiCo has a bigger footprint in the grocery store market, while Coca Cola has a bigger footprint in the restaurant market. During the recession, restaurants saw a lot less foot traffic whereas grocery stores saw a 44% increase in sales, due to the emergence of grocery deliveries.

PepsiCo's operating expenses for the quarter ending June 30, 2022, were $18.148 billion dollars, an increase of 12.8% Year over Year. The 1-year operating expenses were $68.797 billion dollars, an 8.68% increase year over year

Financial Statement

Sources

Ethics and integrity. PepsicoUpgrade. (n.d.). Retrieved October 10, 2022, from https://www.pepsico.com/our-impact/esg-topics-a-z/ethics-and-integrity

Ethical issues of Pepsi: Free Essay. Thesisliader.com. (2020, February 12). Retrieved October 10, 2022, from https://thesisleader.com/essays/pepsi-companys-ethical-issues/#:~:text=In%202007%2C%20PepsiCo%20had%20faced%20a%20global%20ethical,produced%20the%20refined%20drinking%20water%20themed%20Aquafina%20Water

About Pepsico. PepsicoUpgrade. (n.d.). Retrieved October 10, 2022, from https://www.pepsico.com/who-we-are/about-pepsico

Pepsi marketing strategy – marketing strategy of Pepsi. Business Marketing Strategy. (2022, July 6). Retrieved October 10, 2022, from https://bsmarketingstrategy.com/pepsi-marketing-strategy-marketing-strategy-of-pepsi/

11.5 market segmentation - introduction to business. OpenStax. (n.d.). Retrieved October 10, 2022, from https://openstax.org/books/introduction-business/pages/11-5-market-segmentation

Gregory, L. (2017, February 6). PepsiCo's operations management, 10 decisions, productivity. Panmore Institute. Retrieved October 10, 2022, from https://panmore.com/pepsico-operations-management-10-decisions-areas-productivity

Gregory, L. (2017, February 6). PepsiCo's operations management, 10 decisions, productivity. Panmore Institute. Retrieved October 10, 2022, from https://panmore.com/pepsico-operations-management-10-decisions-areas-productivity

PepsiCo operating expenses 2010-2022: PEP. Macrotrends. (n.d.). Retrieved October 10, 2022, from https://www.macrotrends.net/stocks/charts/PEP/pepsico/operating-expenses#:~:text=PepsiCo%20annual%20operating%20expenses%20for%202018%20were%20%2454.551B%2C,that%20includes%20Frito-Lay%2C%20Gatorade%2C%20Pepsi-Cola%2C%20Quaker%20and%20Tropicana

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