Strategic Management Process of PepsiCo
Suleyman Demirel University
Faculty of economics
Course Project on Strategic Management
Strategic Management Process of
PepsiCo
Prepared by: Arman Umishev, management 4
Subject: Strategic Management
Submitted to: Saule Bolegenova
Kaskelen, 2012
Executive Summary
Created in 1965 through the merger of Pepsi-Cola and Frito-Lay, PepsiCo is one of the strongest beverage and convenient food companies in the world. Originally started in 1898, Pepsi Cola became the first branded soft drink in the world. Its brand is available in over 200 countries around the world and generated sales in excess of $92 billion last year. Headquartered in Purchase, New York, PepsiCo is the number two beverage company in the world behind the Coca-Cola Company.
Financially, 2006 was a year of progress with an overall growth of 5.5%, revenue of nearly 36 billion USD and a return on investment of 26%. These numbers are all well above the industry average, with their main competitor still being the Coca-Cola Company. PepsiCo has continued their brand image by appealing to Generation Y and becoming synonymous with music, entertainment and sports. In addition to their financial success, PepsiCo is also dedicated to ethics and social responsibility in the community. They have invested heavily in recycling programs and in developing nations in Africa. PepsiCo even has a sustainability mission that states “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate- environmental, social, economic- creating a better tomorrow than today.”
They believe that they have the competitive, sustainable advantage in the industry because of three things: big brands, proven innovation and differentiated products, and powerful go-to markets. With their strong brand, socially responsible employees and corporate beliefs and focus on the younger generation, PepsiCo will continue its stance as one of the most powerful companies in the world.
VISION
“PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today.”
Pepsi cola international vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
MISSION STATEMENT
Our mission is to be the world’s premier consumer Products Company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
Developing mission statement
We have absolute clarity about what we do ‘WE SELL HIGH QUALITY FOOD AND BEVERAGE PRODUCTS.’ Our success will ensure: customers will build their business, employees build their futures, and shareholders build their wealth."
- To be the world's best beverage company. Being the best means providing outstanding quality, service, cleanliness and value, so that their every customer is contented and happy with their products.
- To increase the value of their shareholder’s investment through sales growth, cost control and wise investment of resources.
Objectives
Strategic acquisitions
Product Reformations
- To make snack foods and beverages less unhealthy
- By producing (GFY) good-for-you or (BFY) better-for you products, that would create growth opportunities
- Related Diversification
Achieve Synergies
Close Relationships with distribution allies
International expansion
Maintain efficient distribution system
- Direct Store Delivery
- Broker Warehouse
The company has three main goals in terms of water conservation:”
- improve their water use efficiency by 20 percent per unit of production by 2015,
- Strive for positive water balance in our operations in water-distressed areas.
- Finally provide access to safe water to three million people in developing countries by 2015.
- Pepsi follows five principles of sustainable packaging design: Reduce, Reuse, Recycle, Remove, and Renew.
External opportunities and threats
OPPORTUNITY:
PepsiCo New Products Can Easily Penetrate In The Market.
Noncarbonated Drinks Are the Fastest-Growing Industry
Demand of Pepsi Is More than Of Competitor
Changing Social Trends (Fast Foods)
Internet Promotion and Ordering Processes
May Tie Up or Liaison with Major Showrooms, Computer Centers & Restaurant
THREATS:
Non-Carbonated Substitutes (The Mango Season)
Beverage Industry Is Mature
Fake Products (Imitators)
Competitor’s Schemes
Strong Competition with Coca-Cola Company
External Factor Evaluation (EFE) Matrix
EXTERNAL FACTOR ANALYSIS (EFE) MATRIX |
|||
Opportunity |
WEIGHT |
RATE |
T.SCORE |
PepsiCo New Products Can Easily Penetrate In The Market. |
0.09 |
4 |
0.36 |
Noncarbonated Drinks .Are The Fastest-Growing Industry |
0.11 |
3.00 |
0.33 |
Demand Of Pepsi Is More Than Of Competitor |
0.07 |
3.00 |
0.21 |
Changing Social Trends (Fast Foods) |
0.09 |
3.00 |
0.27 |
Internet Promotion And Ordering Processes |
0.06 |
1.00 |
0.06 |
May Tie Up Or Liaison With Major Showrooms. Computer Centers &Restaurant |
0.07 |
2.00 |
0.14 |
Threats |
|||
Non-Carbonated Substitutes (The Mango Season) |
0.14 |
3.00 |
0.42 |
Beverage Industry Is Mature |
0.12 |
4.00 |
0.48 |
Fake Products (Imitators) |
0.10 |
2.00 |
0.20 |
Competitor's Schemes |
0.05 |
2.00 |
0.10 |
Strong Competition With Coca-Cola Company |
0.10 |
2.00 |
0.20 |
Total |
1.00 |
2.77 |
Internal STRENGHTS and WEAKNESS
STRENGHTS:
Strong Multinational (Brand Equity)
Strong & Vast Distribution Channels
Lack of Capital Constraints
Record Market Share
Strong Brand Portfolio
Aggressiveness In The Market (Market Leader)
Brand Promotion & Sponsorship
WEAKNESS:
Targeting Only Young Customers
Political Franchises
Centralized Decision Making
Decline In Taste
Motivational Factor
Not All Products Bear the Company Name
Internal Factor Evaluation (IFE) Matrix
INTERNAL FACTOR ANALYSIS (IFE) MATRIX |
|||
Strengths |
WEIGHT |
RATE |
T.SCORE |
Strong Multinational (Brand Equity) |
0.11 |
3.00 |
0.33 |
Strong & Vast Distribution Channels |
0.09 |
4.00 |
0.36 |
Lack Of Capital Constraints |
0.07 |
3.00 |
0.21 |
Record Market Share |
0.10 |
4.00 |
0.40 |
Strong Brand Portfolio |
0.06 |
3.00 |
0.1 |
Aggressiveness In The Market (Market Leader) |
0.07 |
3.00 |
0.21 |
Brand Promotion & Sponsorship |
0.12 |
4.00 |
0.48 |
Weakness |
|||
Targeting Only Young Customers |
0.09 |
2.00 |
0.18 |
Political Franchises |
0.06 |
2.00 |
0.12 |
Centralized Decision Making |
0.05 |
2.00 |
0.10 |
Decline In Taste |
0.09 |
1.00 |
0.09 |
Motivational Factor |
0.05 |
1.00 |
0.05 |
Not All Products Bear The company Name |
0.04 |
2.00 |
o.o8 |
Total |
1.00 |
2.79 |
COMPETITIVE PROFILE MATRIX
PEPSICO. |
COCA COLA CO. |
Kraft food | |||||
Critical Success Factors |
WEIGHT |
RATE |
T.SCORE |
RATE |
T.SCORE |
||
Plant Location |
0.07 |
3.00 |
0.21 |
3.00 |
0.21 |
3 |
0.21 |
Strong Brand Image |
0.1 |
4.00 |
0.44 |
4.00 |
0.44 |
3 |
0.33 |
Global Expansion |
0.09 |
3.00 |
0.27 |
3.00 |
0.27 |
2 |
0.18 |
Market Share |
0.12 |
4.00 |
0.48 |
3.00 |
0.36 |
2 |
0.24 |
Product Quality |
0.12 |
3.00 |
0.27 |
4.00 |
0.36 |
4 |
0.27 |
Production Capacity |
0.08 |
2.00 |
0.32 |
3.00 |
0.24 |
2 |
0.16 |
Innovation |
0.11 |
3.00 |
0.33 |
3.00 |
0.33 |
3 |
0.33 |
Control Over Supply Chain |
0.06 |
3.00 |
0.18 |
4.00 |
0.24 |
3 |
0.18 |
Availability |
0.1 |
4.00 |
0.44 |
4.00 |
0.44 |
2 |
0.22 |
Advertising |
0.1 |
3.00 |
0.33 |
4.00 |
0.44 |
3 |
0.33 |
Bottling Investment & Empty Mgt |
0.05 |
3.00 |
0.15 |
3.00 |
0.15 |
3 |
0.15 |
Total |
1 |
3.34 |
3.48 |
2.58 | |||
The Competitive Profile Matrix (CPM) identifies PepsiCo major competitors (Coca-Cola) and its particular strengths and weaknesses in relation to firm’s current strategic position.
The two most important factors to being successful in the industry are “market share” and “product quality,” as indicated by weights of 0.12. PepsiCo’s current strategy’s response to these factors is good, as indicated by its 2 rating.
Note in Competitive Profile Matrix Coca-Cola is strongest on “product quality” and “Strong Brand Image” as indicated by a rating of 4, whereas Kraft food is strongest on “Product Quality”, PepsiCo is strongest in “market share” and “Strong Brand Image”.
Overall, Coca-Cola is strongest, as indicated by the total weighted score of 3.48. PepsiCo total weighted score is 3.34. It is above than average. Its current strategy’s response to “Product Quality” and “Market Share” . Company has to focus on this area of its business in order to overcome its competitors.
SWOT Matrix
Strengths |
Weaknesses | |
|
|
|
|
Opportunities |
S-O Strategies |
W-O Strategies |
|
Company Can Introduce New Product Or Non-Carbonated Drinks Because It Have Good Brand Equity, Large Resources
By Having Good Distribution Channel and lack of capital can acquire small companies in new market and Can Focus Easily Fast Food Restaurants, Clubs. |
By Introducing Non-Carbonated Drinks Pepsi Can Capture Different Age Groups.
|
Threats |
S-T Strategies |
W-T Strategies |
|
Because Co. Has Financial Recourses And Distribution Channel Therefore It Can Produce Non-Carbonated Drinks.
|
By improving the taste & quality company can reposition its products can take long term position on maturity stage.
|
Critical region: SO Strategies (Strength-Opportunities)
An Important Tool to Develop Four Types of Strategies:
- SO Strategies (Strength-Opportunities)
- WO Strategies (Weakness- Opportunities)
- ST Strategies (Strength-Threats)
- WT Strategies (Weakness-Threats)
The Strategic Position and Action Evaluation (SPACE) Matrix
Financial position |
rating |
Stability position |
rating |
Return on investment NI Liquidity Cash flow ROE ROA Earnings per share Inventory turnover
Average |
4 3 4 5 4 4 4 5
4.125 |
Economic stability Demand Changes Price elasticity of demand Competitive pressure Barriers to entry new market Price range from competing products
Average |
-2 -1 -1 -3 -2 -1
-1.67 |
Competitive position |
Industry position |
||
Market share Product quality Consumer loyalty Control over suppliers Brand recognition
Average |
-2 -3 -4 -2 -3
-2.8 |
Growth potential Financial stability Ease of entry new market Resources utilization Profit potential Demand variability Average |
5 4 6 3 3 3 4 |
SP average -1.67 IP average 4
CP average -2.8 FP average 4.125
X-axis: CP+IP=-2.8+4=1.2
Y-axis: SP+FP=-1.67+4.125=2.455
A firm whose financial strength a dominating factor in the industry, so PepsiCo is very aggressive company in the market.
Aggressive profile
- Backward, Forward, Horizontal Integration
- Market Penetration
- Product Development
- Diversification (Related or Unrelated)
The Internal- External (IE) Matrix
The IFE Total Weighted Score | ||||
|
4 |
Strong 3 |
Average 2 |
Weak 1 | |
High
3 |
I
|
II |
hold | |
The EFE Total Weighted Score |
Medium
2 |
IV Invest |
V hold
|
VI Harvest |
Low
1 |
VII hold |
VIII Harvest |
IX Divest | |
The IE Matrix is based on two key dimensions: the IFE total weighted scores on the x-axis and the EFE total weighted scores on the y-axis EFE 2.77 IFE 2.79 V suggests the hold and maintains strategy. In this case, tactical strategies focus on market penetration and product development | ||||
The BCG growth –Share Matrix
Division |
Revenue |
% Revenue |
Profit |
Profit % |
Market Share |
Market Growth |
Frito-Lay North America |
$ 13322 |
20% |
$ 3,621 |
33.5% |
1 |
5.62% |
Quaker Foods North America |
$ 2.656 |
4% |
$ 797 |
7.5% |
1 |
0% |
Latin America Foods |
$ 7.156 |
11% |
$ 1.078 |
10% |
1 |
11.75% |
PepsiCo Americas Beverages |
$ 22.418 |
34% |
$ 3273 |
30% |
0.8 |
9% |
Europe |
$ 13.560 |
20% |
$ 1.210 |
11% |
0.4 |
20% |
Asia, Middle East & Africa |
$ 7.392 |
11% |
$ 887 |
8% |
0.3 |
14.9% |
Total |
$ 66..504 |
100% |
$ 10866 |
100% |
Relative market share | |||
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 | |||
Industry Sales Growth Rate |
10% +20
35.5%
+10
7.5%
0
+10
-20 |
30%
Stars |
11% 8%
Question marks |
|
Cash cows |
Dogs | ||
From table we can see that PepsiCo is composed of 6 geographic divisions with annual total 66.504 million. Circles represent sales volume of each division. The pie slices within the circles reveal the percent of corporate profits contributed by each division.
Asia, Middle East & Africa and Europe divisions is Question Mark. Because have a low relative market share position, yet they compete in a high-growth industry. PepsiCo has strengthened them by pursuing an intensive strategy (market penetration, market development, or product development).
Frito-Lay North America, Quaker Foods North America, Latin America Foods and PepsiCo Americas Beverages divisions are stars. Because they have a high relative market shares position and high-growth industry. Market penetration, market development, and product development, Backward, Forward, Horizontal Integration are applied strategies for this division.
Grand Strategy Matrix
This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is popular tool for formulating alternative strategies. In this matrix all organization divides into four quadrants.
Any organization should be placed in any one of four quadrants. Appropriate strategies for an
Organizations to consider are listed in sequential order of attractiveness in each quadrant of the matrix.
It is based two major dimensions
- Market growth
- Competitive position
From Competitive Profile Matrix we can see that between PepsiCo and Coca-Cola high competition, so PepsiCo not inferior to Coca-Cola, that’s have strong competition. And from BCG matrix can be seen high market growth of PepsiCo. Firms located in quadrant 1 of the grand strategy matrix are in an excellent strategic position. PepsiCo. Must focus on current market and appropriate to follow market penetration, market development and products developments are appropriate strategies.
- Market Development
- Market Penetration
- Product Development
- Backward, Forward, Horizontal Integration
- Related/Concentric Diversification
Matrix Analysis
Alternative Strategies |
IE |
SPACE |
BCG |
GRAND |
Count | |
Forward Integration |
+ |
+ |
2 | |||
Backward Integration |
+ |
+ |
2 | |||
Horizontal Integration |
+ |
+ |
2 | |||
Market Penetration |
+ |
+ |
+ |
+ |
4 | |
Market Development |
+ |
+ |
+ |
+ |
3 | |
Product Development |
+ |
+ |
+ |
+ |
4 | |
Related Diversification |
+ |
+ |
2 | |||
Unrelated Diversification |
+ |
+ |
2 | |||
From matrix analysis we can see that Market Penetration and Product Development are presented in all matrixes, so our strategy will be associate by these strategies. And Market development too will be entering in strategies.
The quantitative strategic planning matrix (QSPM)
QSPM matrix |
Strategic alternatives | ||||
Key factors |
Produce Non-carbonated products. |
Acquire small companies in new market and Tie up with restaurants, clubs, show rooms in current market | |||
STRENGTHS |
Weight |
AS |
TAS |
AS |
TAS |
Strong multinational (Brand Equity) |
0. 055 |
3 |
0.65 |
3 |
0.165 |
Strong & Vast Distribution Channels |
0.045 |
3 |
0.18 |
3 |
0.135 |
Lack Of Capital Constraints |
0.035 |
3 |
0.105 |
4 |
0.14 |
Record Market Share |
0.05 |
2 |
0.1 |
4 |
0.2 |
Strong Brand Portfolio |
0.03 |
2 |
0.06 |
3 |
0.09 |
Aggressiveness In The Market (Market Leader) |
0.035 |
3 |
0.105 |
4 |
0.14 |
Brand Promotion & Sponsorship |
0.06 |
2 |
0.12 |
3 |
0.18 |
WEAKNESS |
|||||
Targeting Only Young Customers |
0.045 |
3 |
0.135 |
2 |
0.09 |
Political Franchises |
0.03 |
0 |
0 |
0 |
0 |
Centralized Decision Making |
0.025 |
0 |
0 |
1 |
0.025 |
Decline In Taste |
0.045 |
3 |
0.105 |
2 |
0.09 |
Motivational Factor |
0.025 |
1 |
0.025 |
2 |
0.05 |
Not All Products Bear The Company Name |
0.02 |
1 |
0.02 |
3 |
0.06 |
1.00 |
|||||
OPPORTUNITY |
|||||
New Products Can Easily Penetrate In The Market. |
0.045 |
3 |
0.135 |
3 |
0.135 |
Noncarbonated Drinks Are The Fastest-Growing Industry- |
0.055 |
4 |
0.22 |
3 |
0.165 |
Demand Of Pepsi Is More Than Of Competitor |
0.035 |
2 |
0.07 |
4 |
0.14 |
Changing Social Trends (Fast Foods) |
0.045 |
2 |
0.09 |
4 |
0.18 |
Internet Promotion And Ordering Processes |
0.03 |
2 |
0.06 |
3 |
0.09 |
Tie Up Or Liaison With Major Showrooms & Restaurant |
0.035 |
2 |
0.07 |
3 |
0.105 |
THREATS |
0 |
0 | |||
Non-Carbonated Substitutes |
0.07 |
4 |
0.28 |
2 |
0.14 |
Beverage Industry Is Mature |
0.06 |
3 |
0.18 |
2 |
0.12 |
Fake Products (Imitators) |
0.05 |
1 |
0.05 |
2 |
0.1 |
Competitor's Schemes |
0.025 |
2 |
0.05 |
3 |
0.75 |
Strong Competition With Coco-Cola Company |
0.05 |
2 |
0.1 |
3 |
0.15 |
1.00 |
2.91 |
3.44 | |||
Based on the Matrix’s analysis developed in matching stage, two most appropriate strategies are chosen and decision is made based on total attractiveness scores (weights*ratings). They are “Produce Non-carbonated products.” (Product Development) and “Acquire small companies in new market and Tie up with restaurants, clubs, show rooms in current market” (Market Penetration). Total Attractiveness score for strategy Produce Non-carbonated products is 2.91, whereas total attractiveness score for “Acquire small companies in new market and Tie up with restaurants, clubs, and show rooms in current market” is 3.44. It means that both strategies can be implemented. But the rapid and more effective strategy is “Acquire small companies in new market and Tie up with restaurants, clubs, show rooms in current market” (Market Penetration). Because it has several advantages such as:
- Use forward integration to acquire smaller companies in foreign markets to increase their (our) market share.
- Exact Providing products to target customers.
- Market development is a strategy that PepsiCo should apply by expanding in countries that not already established
Disadvantages:
- Not Introducing Non-Carbonated Drinks Pepsi that Can Capture Different Age Groups.
- Not trying to produce and distribute healthier products.
- Not invest in going green.
Strategy 1: Produce Non-carbonated (негазированный) products.
Advantages:
- Introducing Non-Carbonated Drinks Pepsi that Can Capture Different Age Groups.
- Healthy product than carbonated products as Coca-Cola or Pepsi cola.
- New product from brand name company it will be effect products growth rate.
Disadvantages:
- Will be known only some geographical customers.
- Customers cannot accept as Pepsi.
- It will be not competitive in so many products in the new market.
Recommended long term objectives:
- Market development is a strategy that PepsiCo should apply by expanding in countries that not already established
- Use forward integration to acquire smaller companies in foreign markets to increase our market share
- Product development and related diversification should also be considered while trying to produce and distribute healthier products.
- Introducing Non-Carbonated Drinks Pepsi that Can Capture Different Age Groups.
Recommended Specific Strategies:
- In the next 3 years, PepsiCo should acquire 3 brands per year in an international marketplace. One of these 3 brands per year must be healthy.
- Increase production and distribution of carbonated drinks in Asian and European countries.
- Includes all PepsiCo business in the United Kingdom, Europe, Asia, Middle East and Africa.
Estimated Changes in Income Statement
PERIOD ENDING |
2009 |
2010 |
2011 |
2012-2013 (Projected) |
|
| ||||
Income Statement | ||||
|
| ||||
Operating Revenue (Revenue/Sales) |
43,232,000 |
57,838,000 |
66,504,000 |
76.000.000 |
Total Revenues |
43,232,000 |
57,838,000 |
66,504,000 |
76.000.000 |
Cost of Sales |
18,527,000 |
24,365,000 |
28,989,000 |
32.000.000 |
Cost of Sales with Depreciation |
20,099,000 |
26,575,000 |
31,593,000 |
37.000.000 |
Gross Margin |
24,705,000 |
33,473,000 |
37,515,000 |
44.000.000 |
Gross Operating Profit |
24,705,000 |
33,473,000 |
37,515,000 |
44.000.000 |
Selling, Gen. & Administrative Expense |
15,026,000 |
22,814,000 |
25,145,000 |
30.000.000 |
Operating Income |
8,044,000 |
8,332,000 |
9,633,000 |
11.000.000 |
Operating Income b/f Depreciation (EBITDA) |
9,679,000 |
10,659,000 |
12,370,000 |
14.000.000 |
| ||||
Depreciation |
1,635,000 |
2,327,000 |
2,737,000 |
3.000.000 |
Amortization of Intangibles |
63,000 |
117,000 |
133,000 |
200.000 |
Operating Income After Depreciation |
8,044,000 |
8,332,000 |
9,633,000 |
11.000.000 |
Interest Income |
67,000 |
68,000 |
57,000 |
60.000 |
Earnings from Equity Interest |
365,000 |
735,000 |
* |
|
| ||||
All numbers in thousands | ||||
|
| ||||
Total Income Avail for Interest Expense (EBIT) |
8,476,000 |
9,135,000 |
9,690,000 |
11.060.000 |
Interest Expense |
397,000 |
903,000 |
856,000 |
1.000.000 |
Pre-tax Income (EBT) |
8,079,000 |
8,232,000 |
8,834,000 |
10.060.000 |
Income Taxes |
2,100,000 |
1,894,000 |
2,372,000 |
3.000.000 |
Minority Interest |
33,000 |
18,000 |
19,000 |
20.000 |
Income before Income Taxes |
8,079,000 |
8,232,000 |
8,834,000 |
10.060.000 |
Net Income from Continuing Operations |
5,946,000 |
6,320,000 |
6,443,000 |
7.040.000 |
Net Income from Total Operations |
5,946,000 |
6,320,000 |
6,443,000 |
7.040.000 |
Total Net Income |
5,946,000 |
6,320,000 |
6,443,000 |
7.040.000 |
Normalized Income |
5,946,000 |
6,320,000 |
6,443,000 |
7.040.000 |
Net Income Available for Common |
5,946,000 |
6,320,000 |
6,443,000 |
7.040.000 |
| ||||
Income Statement - Year-to-Date | ||||
Revenues Year-to-Date |
43,232,000 |
57,838,000 |
66,504,000 |
76.000.000 |
Income Year-to-Date fr. Total Ops. |
5,946,000 |
6,320,000 |
6,443,000 |
76.000.000 |
Estimated Changes in Balance Sheet
Period Ending |
2011 |
2010 |
2002-2013 (projected) | |
Assets | ||||
Current Assets | ||||
Cash And Cash Equivalents |
4,067,000 |
5,943,000 |
4,000,000 | |
Short Term Investments |
358,000 |
426,000 |
400,000 | |
Net Receivables |
6,912,000 |
6,323,000 |
7,000,000 | |
Inventory |
3,827,000 |
3,372,000 |
4,000,000 | |
Other Current Assets |
2,277,000 |
1,505,000 |
3,000,000 | |
Total Current Assets |
17,441,000 |
17,569,000 |
18,000,000 | |
Long Term Investments |
1,477,000 |
1,368,000 |
3,000,000 | |
Property Plant and Equipment |
19,698,000 |
19,058,000 |
22,000,000 | |
Goodwill |
16,800,000 |
14,661,000 |
17,000,000 | |
Intangible Assets |
16,445,000 |
13,808,000 |
17,000,000 | |
Accumulated Amortization |
- |
- |
- | |
Other Assets |
1,021,000 |
1,689,000 |
1,500,000 | |
Deferred Long Term Asset Charges |
- |
- |
- | |
Total Assets |
72,882,000 |
68,153,000 |
78,500,000 | |
Liabilities | ||||
Current Liabilities | ||||
Accounts Payable |
11,949,000 |
10,994,000 |
15,000,000 | |
Short/Current Long Term Debt |
6,205,000 |
4,898,000 |
7,000,000 | |
Other Current Liabilities |
- |
- |
- | |
Total Current Liabilities |
18,154,000 |
15,892,000 |
22,000,000 | |
Long Term Debt |
20,568,000 |
19,999,000 |
21,000,000 | |
Other Liabilities |
8,266,000 |
6,729,000 |
8,000,000 | |
Deferred Long Term Liability Charges |
4,995,000 |
4,057,000 |
5,000,000 | |
Minority Interest |
311,000 |
312,000 |
300,000 | |
Negative Goodwill |
- |
- |
- | |
Total Liabilities |
52,294,000 |
46,989,000 |
56,300,000 | |
Stockholders' Equity | ||||
Misc Stocks Options Warrants |
(116,000) |
(109,000) |
(116,000) | |
Redeemable Preferred Stock |
- |
- |
- | |
Preferred Stock |
- |
- |
- | |
Common Stock |
31,000 |
31,000 |
31,000 | |
Retained Earnings |
40,316,000 |
37,090,000 |
42,099,000 | |
Treasury Stock |
(17,875,000) |
(16,745,000) |
(18,000,000) | |
Capital Surplus |
4,461,000 |
4,527,000 |
5,000,000 | |
Other Stockholder Equity |
(6,229,000) |
(3,630,000) |
(6,930,000) | |
Total Stockholder Equity |
20,704,000 |
21,273,000 |
22,200,000 | |
Liabilities and Equity |
78,500,000 | |||
Estimated Changes in Financial Ratios
Finical Ratio 0f Pepsi |
2010 |
2011 |
2012-2013 (projected) |
liquidity ratios |
|||
Current Ratio |
1.11 |
0.96 |
1.2 |
Quick Ratio |
0.8 |
0.62 |
1 |
Cash ratio |
0.4 |
0.24 |
0.4 |
Debt |
|||
Debt to equity |
1.18 |
1.3 |
1.4 |
Debt to capital |
0.54 |
0.57 |
0.6 |
Profitability Ratio |
|||
Gross Profit Margin |
54.05% |
52.49% |
54% |
Net Profit Margin |
10.93% |
9.69% |
10% |
ROE |
8.84 |
9.27 |
10% |
ROA |
31.29 |
29.86 |
32% |
Strategy
Product - many products for different tastes
Price - Affordable for the mass market
Place - Sold in 200 countries throughout the world
People - Spends a lot of money re-investing in staff and in developing relationships with bottling franchiser’s and distributors
Processes - Now concentrating on reconciling the processes through a BPT system
Physical Evidence - prominent placement on shelves within stores, increased profits
Strategy Review and Evaluation
A Strategy Evaluation Assessment Matrix
Have major changes occurred in the firm’s internal strategic position |
Have major changes occurred in the firm’s external strategic position |
Has the firm progressed satisfactorily toward achieving its stated objectives? |
Result |
No Yes Yes Yes Yes No No No |
No Yes Yes No No Yes Yes No |
No No Yes Yes No Yes No Yes |
Take corrective action Take corrective action Take corrective action Take corrective action Take corrective action Take corrective action Take corrective action Continue present strategic course |
Balanced Scorecard
Area of Objectives |
Measure of Target |
Time Expectation |
Primary Responsibility |
Customers |
|||
1. Customer satisfaction |
Costumer Survey Webinars |
Quarterly |
Human Resources |
Representatives |
|||
1. Improve production efficiencv |
Increase in production |
Yearly |
Supply chain Operations |
2. Offer employee trainings |
Employee surveys Production efficiency |
Yearly |
Human Resources |
Community/ Social Responsibility |
|||
1. Eco-Friendly company |
Increase in recyclable bottle В eing involve in more events regarding water contamination |
Yearly |
CEO |
2. Ethical Company |
Number and success of charitable events UNICEF amount of money donated |
Yearly |
CEO |
Operations; Processes |
|||
1. Innovation |
New products Product appearance Acquisition of new brands |
Yearly |
CEO |
2. Brand expansion |
Numbers of new countries entered Number of sales in the International Segment |
Yearly |
CEO |
Financial |
|||
1. Reduce cost of production |
Income Statement |
Yearly |
Chief Financial Officer |
2. Increase profitability |
Increase annual report |
Yearly |
Chief Financial Officer |
- Strategic planning in organizations
- Strengths and weaknesses of them
- Stylistic classification of english vocabulary
- Stylistic classification of english vocabulary
- Stylistic use of degrees of comparison of adjectives
- Stylistic use of intonation
- Summative and formative evaluations
- SQL курсовая работа
- SQL – стандартный язык реляционных баз данных
- Standartization and certification
- STEP-анализ. Анализ деятельности и конфликтов ОАО «Большой гостиный двор»
- STEP-анализа предприятия пансионата с лечением ООО «Бригантина»
- StokRoute: интегрированное решение
- Strategic management
