Pepsi Co What Is Pepsico Term Paper

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In September 1996, a mutual fund manager who had over 3 million shares in PepsiCo had told the CEO that no one understood why the restaurant group was not being sold off while the group was not being run efficiently. He had also mentioned that it did not fit in with other business of PepsiCo. Thus it is clear that the CEO of PepsiCo knows the reason, but is not able to take the action, or is unwilling to take the needed action.

Regarding the strategies to be applied now, the important aspects that they must cover are the situations of the organization's resources, circumstances and objectives. The first question here is of the difficulty with resources that the organization has now, and for this resources have to be collected, and at the same time, the process of collecting the resources must not interfere with the other aspects. So, the first strategy to be applied now is to get rid of assets within the organization that are not yielding enough returns or showing signs of future yields. With this purpose, the restaurant group should be first disposed off. The second strategic action should be to look at the separation of the organizations main activity of beverages into two parts - one of preparing the concentrate and the other of managing the bottling and supply.

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It is obvious that the main activity of preparing the concentrate should be kept within PepsiCo while the other activity should be under a separate company. This is the action that has been taken already by Coca Cola and seems to be successful.

Though the second strategy would really be a copy of the strategy taken by a competitor, it should not be a matter of any emotional problems. The third strategic action should be to separate the successful activity of snack foods. This can be best achieved with a third unit for the purpose, and clearly the marketing of the three products are not the same. Once the organization has three separate companies for marketing, they are likely to be better managed. Here of course one of the main beliefs of the CEO will be violated, and that is the reason why one would say that….....

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