Business Analytics of PepsiCo Inc

PepsiCo Inc. is an international company engaged in the production and distribution of the world’s leading food and beverage brands with well-known brands such as Pepsi-Cola, Lay’s, Quaker Oats, Tropicana, Gatorade and several other well-known brands. PepsiCo was formed in 1965 and the first products produced by Donald M. Kendall and Herman W. Lay in this company include Pepsi-Cola, Diet Pepsi, Fritos corn chips, Lay’s potato chips, Cheetos snack, Ruffles potato chips. The presence of these products makes this company one of the leading and quality food and beverage producers globally. A year later, this company has been able to expand its wings to Japan and Europe. To date, PepsiCo has produced more than 36 well-known food and beverage brands that are present in more than 200 countries throughout the world.

The performance and goals of PepsiCo are to provide a wide variety of food and beverages to meet local tastes, to find innovative ways to minimize the impact on the environment by saving energy and water and reducing packaging volumes, and providing a large workplace for colleagues, and respecting support in investing in the communities in which PepsiCo operates.

As of January 26, 2012, the 22 PepsiCo brands generated more than $ 1 billion in retail sales each, and the company’s products are distributed in more than 200 countries, generating an annual net income of $ 43.3 billion. Based on net income, PepsiCo is the second largest food and beverage business in the world. Indra Krishnamurthy Nooyi has been CEO of PepsiCo since 2006. And its approximately 274,000 employees generated revenues of $ 66.415 billion in 2013.

Between the late 1970s and mid 1990s, PepsiCo expanded its business through acquisitions beyond the core focus of the food and beverage brand packaging. PepsiCo also previously owned several other brands that would later be sold so that it could focus on the food and soft drink line, according to investment analysts reporting the divestment in 1997. Brands previously owned by PepsiCo include: Pizza Hut, Taco Bell, KFC, Hot ‘n Now, East Side Mario, D’Angelo Sandwich Shops, Chevys Fresh Mex, California Pizza Kitchen, Stolichnaya (via license agreement), Wilson Sporting Goods and North American Van Lines.

Divested in late 1997, PepsiCo began to expand its operations beyond soft drinks and snacks to other lines of food and beverage. PepsiCo purchased the orange juice company Tropicana Products in 1998, and joined the Quaker Oats Company in 2001, adding Gatorade sports drinks and other Quaker Oats brands such as Bar Chewy Granola and Aunt Jemima to its portfolio.

As a large company, of course PepsiCo has subsidiaries that it controls and the following is a list of twenty subsidiaries controlled by PepsiCo, Inc. and located in various countries:

Planning activities directed globally to achieve economies of scale were realized by building 230 factories, 3,600 distribution systems and 120,000 routes worldwide. PepsiCo also shares information on its research results with each division to be able to develop new products that meet consumer needs and become products that can increase the value of its different products. This has been proven by its strategy of saving $ 160 million on integration with Quaker Oats, raised $ 40 million from the combined distribution of Quaker snacks and Frito-Lay products and $ 120 million in savings from combining Gatorade and Tropicana in the beverage filling process in 2005. In 2007 PepsiCo expects each product category to generate sufficient operating cash flow to reinvest into Pepsi’s core business, provide dividends to shareholders, fund $ 8 billion in stock purchases, and acquire companies that yield profitable results. The FLNA Division, Quaker Foods-NA, and all food products in Latin America will be merged into the PepsiCo Americas Foods Division. Meanwhile, the beverage business in Latin America will be merged with PepsiCo Beverages North America to become the PepsiCo Americas Beverages Division. And for PepsiCo international Division will manage all businesses that are outside North America and Latin America.

Some food and beverage industry analysts have speculated that strategic changes in companies are needed to increase profitability and help increase stock prices. The efforts that PepsiCo can do are to re-prioritize the use of cash flow, new acquisitions, increase strategic fits between existing businesses in the company or divest to businesses that have poor growth prospects and have minimal strategic fits.

Summary:

Based on the above discussion, it can be concluded that PepsiCo, Inc is a global company in the food and beverage sector with net revenues of more than $ 65 billion and a product portfolio that includes 22 brands that can generate more than $ 1 billion annually in retail sales. Some of the most famous brands from PepsiCo are Pepsi-Cola, Lay’s, Quaker Oats, Tropicana, Gatorade and others.

PepsiCo has 6 divisions namely Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA), Asia, Middle East and North Africa (AMENA).

The key to PepsiCo’s success is that PepsiCo is able to predict trends locally and globally, PepsiCo can adapt to the lifestyle and needs of consumers, PepsiCo can innovate and diversify its products, and carry out a well-controlled manufacturing process to achieve economies of scale so that it can be known throughout the world. And PepsiCo’s strategy was to save $ 160 million in costs incurred in the company’s extensive purchases of raw materials and packaging materials. In addition, the company saved $ 40 million in distribution between Quaker Snacks and Frito-Lay products, and combined activities between its divisions so that PepsiCo could achieve economies of scale.

Reference:

https://purnamiap.blogspot.com/2017/01/analisis-perusahaan-yang-dikendalikan.html

https://www.slideshare.net/EscaLuine/pepsi-co-case-study