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Answer the following quetions in detail:- 1. Discuss type of…
Answer the following quetions in detail:-
1. Discuss type of organization structure of your company. Also explain about old organizational structure and improved organizational structure. You can write two pages on this part. Please make a chart or table for old and improved organizational structure.
Case study:-
Headquartered in Purchase, New York, PepsiCo is the second-largest carbonated soft-drink maker in the world, behind Coca-Cola Company. In North America, PepsiCo is the largest food and beverage company, having soft-drink brands that include Pepsi-Cola, Mountain Dew, and Diet Pepsi, as well as Tropicana orange juice, Gatorade sports drink, SoBe tea, and Aquafina bottled water. Unlike Coca-Cola, PepsiCo is diversified, owning Frito-Lay and Quaker Foods. Frito-Lay is the largest salty snack provider in the United States, having brands that include Lay’s, Ruffles, Doritos, Cheetos, and Fritos; Quaker Foods offers breakfast cereals (Life, Quaker Oats), rice (Rice-A-Roni), and side dishes (Near East).
PepsiCo’s products are available in more than 200 countries where the company specializes in innovating/changing products to match local tastes and cultures. For example, in Jordan, Bario, a nonalcoholic malt drink is popular, and Tropicana Pulp Sacs are popular in China. Fifty percent of company revenue comes from outside the United States and that percentage is increasing. PepsiCo is the largest food and beverage business in Russia, India, and the Middle East, is number two in Mexico, and is in the top five in Brazil, Turkey, and many other emerging markets like Vietnam, the Philippines, Thailand.
PepsiCo is forward integrated, owning its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. Pepsi products are available worldwide through a variety of systems, including direct store delivery (DSD), broker-warehouse, food service, and vending machines. Twenty-two of PepsiCo’s products have generated retail sales of more than $1 billion, including three brands that recently reached this milestone: Diet Mountain Dew, Brisk, and Starbucks ready-to-drink beverages.
On December 20, 2017, PepsiCo stock switched to trade on the Nasdaq Global Select Market rather than the New York Stock Exchange. PepsiCo stock continues to trade under the symbol PEP. PepsiCo has increased its annual dividend for over 41 consecutive years. PepsiCo reports its financial results across six segments:
FLNA: Frito-Lay North America
QFNA: Quaker Foods North America
NAB: North America Beverages
Latin America
ESSA: Europe Sub-Saharan Africa
AMENA: Asia, Middle East, and North Africa
History:-
The secret formula for Pepsi was developed in the 1880s by Caleb Bradham, a pharmacist in Newbern, North Carolina. Caleb named his product “Pepsi-Cola” in 1898. As his product gained popularity, he created the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903. Interestingly, the formula for Coca-Cola was developed in 1886 by pharmacist John Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Pepsi-Cola Company was first incorporated in Delaware in 1919.
In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc., to become PepsiCo, Inc., as the company is known today. Between the late 1970s and the mid-1990s, PepsiCo expanded via the acquisition of restaurants and other businesses outside of its core focus of packaged food and beverage brands. This was a big strategic mistake and the company exited these noncore business lines largely in 1997, selling some and spinning off others into a new company that is now known as Yum! Brands. A few brands formerly owned by PepsiCo include Pizza Hut, Taco Bell, Kentucky Fried Chicken, D’Angelo Sandwich Shops, Wilson Sporting Goods, North American Van Lines, and Stolichnaya. In December 2005, PepsiCo surpassed Coca-Cola Company in market value for the first time in 112 years since both companies began to compete.
PepsiCo purchased Tropicana Products in 1998 and acquired Quaker Oats Company in 2001. In 2010, PepsiCo acquired its two largest bottlers in North America: Pepsi Bottling Group and PepsiAmericas. In 2011, PepsiCo made its largest international acquisition by purchasing Wimm-Bill-Dann Foods, a Russian food company that produces milk, yogurt, fruit juices, and dairy products. This acquisition made PepsiCo the largest food and beverage company in Russia. This acquisition boosted PepsiCo’s nutrition portfolio. In January 2012, PepsiCo hired its first female CEO, Indra Nooyi, who remains CEO today.
PepsiCo is having trouble with its Gatorade brand whose sales in the United States declined 0.5 percent to $5.9 billion in 2017. This was the brand’s first decline in annual sales since 2012. Gatorade accounts for about 20 percent of PepsiCo’s North American drink volume. The company released Gatorade Organic in August 2016 and made $20 million on that product through the end of 2017. The sports-drink market is becoming highly competitive; even up-start BodyArmour, a distant third in market share, is gaining rapidly on PepsiCo in sports drinks, such as Gatorade.
In May 2018, PepsiCo acquired Bare Foods, Inc., which makes Bare Snacks, a line of healthy fruit and vegetable snacks. Headquartered in San Francisco, California, Bare Foods is owned and operated by Bob and Diana Carroll. The purchase of Bare fits into PepsiCo’s strategy to diversify further into healthy and nutritious products. Bare began its business in 2001 by selling baked apple chips at local farmers’ markets and steadily expanded, becoming a leader in apple, banana, and coconut snacks, and recently adding vegetable chips to its line. All Bare products are baked, not fried, and are also Non-GMO Project-verified. Bare will continue to operate independently from San Francisco, with its leadership reporting to PepsiCo’s Frito-Lay North America Division.
Organizational Structure:-
PepsiCo breaks down their business in the Americas by foods versus beverages, but their Latin America and outside North America business units include beverages, foods, and snacks. Yes, this is confusing and the company has changed it almost annually. PepsiCo’s top executives are listed in Exhibit 1 along with an organizational chart. The chart depicted reveals only three levels: the CEO, the functional-level executives, and the line/regional-level executives. Probably no one but PepsiCo insiders know exactly who reports to whobut what is important for students is to devise a recommended reporting relationship, perhaps deleting some positions and creating others, to more clearly reveal for all insiders and outsiders the chain of command. Likely, PepsiCo would function best with a strategic business unit (SBU) type structure comprised of two SBU’sbeverages and foodwith regional presidents reporting to those two individuals. PepsiCo’s executive titles should match with the company’s segment titles FLNA, QFNA, NAB, Latin America, ESSA, and AMENA.
Segments:-
PepsiCo is transparent in its reporting of financial information by segment. PepsiCo monitors and reports results of their operations in six segments as given below. Note that in Latin America and outside North America, PepsiCo’s beverages and snacks are combined as segments (ESSA and AMENA).
Inside North America:-
North America Beverages (NAB)sample products include Pepsi, Gatorade, Mountain Dew, Aquafina, 7UP (outside the United States), and Tropicana
Frito-Lay North America (FLNA)sample products include Doritos, Cheetos, Tostitos, Ruffles, Fritos, SunChips, and Santitas
Quaker Foods North America (QFNA)sample products include Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Quaker grits, Cap’n Crunch cereal, Life cereal, and Rice-a-Roni side dishes
Latin Americaincludes many of the Frito-Lay and Quaker products
Outside North America:-
Europe Sub-Saharan Africa (ESSA)includes many of the beverages and foods listed inside North America with many modified to match particular country culture and desires
Asia, Middle East & North Africa (AMENA)includes many of the beverages and foods listed inside North America with many modified to match particular country culture and desires.
Image transcription text
Introduction: PepsiCo, Inc.–2018 AM America, ESSA, and AMENA. Exhibit 1 PepsiCo’s Top Executives and
Organizational Chart 2 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1. Indra Nooyi, Chairman
of the Board 13. Brian Newman, EVP, Finance and Operations, Latin America 2. Ramon Laguarta, C…
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