Introduction Introduction • PepsiCo was founded in 1965 through the

merger of Pepsi-Cola and Frito- Lays.• Tropicana was acquired in 1998 and PepsiCo

merged with The Quaker Oats Company, including Gatorade, in 2001.

• The company consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America.

• PepsiCo brands are available in nearly 200 countries and territories and generate sales at the retail level of about $92 billion.

Mission• “To be the world's premier consumer products

company focused on convenient foods and beverages. ”

• Seek to produce healthy financial rewards to investors as they provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate. 

• And in everything they do, they strive for honesty, fairness and integrity.

Honours• Named one of the Best Graduate Employers

in China by university students in China, for the second year in a row.

• Doritos “Crash the Super Bowl” program won the 2007 Cannes Gold Medal Lions Award in the “Fast Moving Consumer Goods” category.

• Covalence published its Ethical Ranking for 2006, ranking PepsiCo 6th for Best Reported Performance .

• PepsiCo China was awarded a 2006 Best Corporate Public Image Award for its brand image of vitality and youthfulness.

• Indra Nooyi receives India Abroad award.

Company’s Structure• Co-founder of PepsiCo-Donald M. Kendall• Indra K. Nooyi-Chairman of the Board and Chief Executive Officer• Mitch Adamek-Senior Vice President and Chief Procurement Officer • Michael D. White-Chief Executive Officer, PepsiCo International and Vice

Chairman, PepsiCo• Julie Hamp-Senior Vice President, PepsiCo Communications

Sustainable advantage• Three major sustainable advantages give

PepsiCo a competitive edge as they operate in the global marketplace:

• Big, muscular brands; • Proven ability to innovate and create differentiated

products; and • Powerful go-to-market systems.

Competition • Their chief beverage competitor, The Coca-Cola

Company, has a slightly larger share of carbonated soft drink (CSD) consumption in the U.S. and outside.

• PepsiCo have a larger share of chilled juices and isotonics.

• Their snack brands hold significant leadership positions in the snack industry worldwide.

Financial position of PepsiCo (2006)

• Volume growth - 5.5%.• Net revenue growth - 8%.• Division operating profit growth - 7%.• Earnings per share growth - 13%.• Total return to shareholders was 8%.• Return on invested capital was 26%.• Cash flow from operations was $6.1 billion and

management operating cash flow was $4.1 billion.

Risks• product demand,• their reputation,• information technology,• supply chain,• retail consolidation, the loss of major customers

and failure to maintain good relationships with their bottling partners,

• global, economic, environmental and political conditions,

• the regulatory environment,• workforce retention and outsourcing,• raw materials and other supplies,&• competition.

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Karishma Seth

PGDM07028

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