Knowledge sharing in inter-unit cooperative episodes: The impact of organizational structure dimensions.Â. PepsiCo the brand everyone knows and loves is most famous for their collection of tasty treats. PepsiCo has maintained considerable hierarchy for top-down communications, monitoring and control. He does not own a position in any of the stocks named here. It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. No doubt, much of what Pepsi makes would not be recommended by your doctor. PepsiCo’s organizational structure also features a hierarchy that spans the global organization. 1125 N. Charles St, Baltimore, MD 21201. Other companies following divisional structure are Unilever, Engro and Reckitt Benckiser. Disadvantages Of Pepsi. This is possible through market divisions. Diversification results in reduced investment risk. ” On the other hand, Pepsi’s corporate culture focuses on performing with a purpose. Advantages And Disadvantages Of Idea Generation The company was formed in merger between Frito-Lay and Pepsi-Cola. While it is working to turn things around, it will still take some time. This characteristic of the organizational structure also provides a means through which PepsiCo minimizes deviations from its policies and strategies. It can build multiple levels of consumer loyalty. For example, the company has a single global division for Frito-Lay. In case you didn't know, coke and Pepsi are example of soda drinks. The idea is to present all tangible information in the forms of graphs, pictures or text, so that you don’t overlook facts. This is possible through market divisions. It employs more than 285000 workers all over the world. The modern consumer builds relationships with the brands they enjoy the most. These divisions are based on two variables: business and geography. Intensive distribution is a kind of marketing strategy that focuses on maximizing product availability. Pepsico case study business ethics for essay on the advantages and disadvantages of private tuition. Copyright © Competitive pressures. The fact that it tastes better is irrelevant. Coke was created in 1885 by John Stith Pemberton, a pharmacist, and was initially made as a tonic (Smith, 2012). PepsiCo’s Corporate Culture: Advantages and Disadvantages. Disseminative capacity, organizational structure and knowledge transfer.Â, Willem, A., & Buelens, M. (2009). Marengo, L., & Pasquali, C. (2012). Advantages And Disadvantages To Be a Rich Guy Everybody wants to be rich rather than being poor. The fact is that Coca-Cola (NYSE:KO) has been outsmarting Pepsi, but another factor has been the overall sluggish economy. Liao, C., Chuang, S. H., & To, P. L. (2011). How to get what you want when you do not know what you want: A model of incentives, organizational structure, and learning.Â. PESTLE analysis is the term used in the context of marketing. 1. The following are the advantages of diversification: As the economy changes, the spending patterns of the people change. The brands include Quaker Oats, Gatorade, Frito-Lay and Doritos. As a result, PepsiCo is enjoying competitive advantages regionally with the assistance of big companies. The company has global or corporate offices for these functions. Pepsi has a broad range of products for beverages and snack foods, which are sold in more than 200 countries. Everyone was really friendly and helpful and they also provided me with a great business experience as well as allowing me to work on my own projects which I felt passionate about. There are several advantages and disadvantages to a conglomerate company. The divisional organizational structure allows each division of a firm to be accounted for in isolation. 6. The paper "Advantages and Disadvantages of the Coca-Cola Company Merging with Other Firms within the Industry" states that in terms of branding and sales both Pepsi StudentShare Our website is a unique platform where students can share their papers in a matter of giving an example of the work to be done. It helps lower costs as well as adjust to changing customer demand. (“Global Divisions- PepsiCo”, 2018) Advantages of Divisional Structure Accountability. I worked at PepsiCo for less than a year. Know the Advantages and Disadvantages of Intensive Distribution? It is getting increasingly expensive to purchase key ingredients In fact, it has been exaggerated because of the company’s acquisition of its bottling system. The organizational structure also has the advantage of supporting PepsiCo’s global corporate control. PepsiCo (PEP) shares, among the bluest of the blue chips, have continued their winning streak thus far in 2016, outpacing the broad-based S& P 500 Index by about two percentage points year to date. This MarketingWit post highlights the advantages and disadvantages of intensive distribution. The PepsiCo brand is famous and known worldwide. They have "Training Academies" to expedite the onboarding process for virtually every level of employee. Although Slice ultimately failed, PepsiCo could rebrand the product to continue selling it successfully. That’s a fact. PepsiCo has an extensive portfolio of food and drinks with 100 brands serving. Read More. Copyright © 2020 InvestorPlace Media, LLC. PepsiCo Inc. (PEP) is a leading food and beverage company with an impressive global presence. Development and return on execution of product innovation capabilities: The role of organizational structure.Â, Tang, F., Mu, J., & MacLachlan, D. L. (2010). How knowledge management mediates the relationship between environment and organizational structure. This characteristic of PepsiCo’s organizational structure refers to basic business functions. PepsiCo also is using acquisitions to expand its footprint in emerging markets. Yet the company lost its focus, which has resulted in some problems with its growth, especially in the U.S. The main competitors of pepsico in this field are Nestle, Archer Daniels, Coca Cola company and Kraft food. In the latest quarter, beverage volume growth increased 13% in China, 17% in India and 15% in Turkey. However, after a number of key mergers and acquisitions, along with global expansion, the company has changed its organizational structure accordingly. Emerging markets. Coca cola being its main rival in the field of beverage production. Moreover, it has received various award… I have been working at PepsiCo full-time for more than 5 years. Their products are convenient and addictive. Search Results. And it continually uses diversification into snacks over soft drinks. Even with a general slowdown and higher inflation, most developing and emerging markets are posting healthy GDP growth. PepsiCo encountered this issue in 2017 when they hired Kendall Jenner to serve as a “bridge” between protestors by offering a police officer a can of soda. If you are considering global expansion as the next step, the first thing you need to do is research. However, PepsiCo experiences the disadvantage of the limits of its organizational structure in terms of flexibility. Depending too much on a decision support system and placing an unusual amount of trust in it i… An Executive Vice President or Senior Vice President heads each of these groups. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. PepsiCo Diversification beyond Drinks. Article printed from InvestorPlace Media, https://investorplace.com/2011/07/pepsico-shares-3-pros-3-cons/. This PepsiCo SWOT analysis reveals how the second largest food company in the world uses its competitive advantages to dominate snack and beverage industries. The following are the market division in PepsiCo’s organizational structure: Functional Corporate Groups/Offices. PepsiCo’s organizational structure’s characteristics are based on the company’s approach to maximize its control of the business while continuing to grow internationally. Over the years, it has expanded its operation with acquisition of other brands such as Tropicana, Gatorade and Quaker Oats. The leading beverages that the company (North America Beverages NAB) has made include Pepsi, Aquafina, Diet, Mountain Dew, Diet Pepsi, Gatorade, Mist Twist, Mountain Dew, Propel and Tropicana. Although DSSs stop a decision maker from promoting a bias, they simply aid in decision making by offering useful insights into easily consumable bites. The following are the main functional corporate groups/offices at PepsiCo: Global Hierarchy. Performing with a purpose means blazing new trails, never settling for second best, succeeding and celebrating together, and doing something bigger (PepsiCo, 2012). Keeping these strategies in mind we have to consider the advantages and disadvantages of PepsiCo global expansion. In terms of business, PepsiCo’s maintains one global division for Frito-Lay and another global division for Quaker Foods. Comp… Coca-Cola versus Pepsi-Cola: Competitive Strategies Coca-Cola (Coke) and Pepsi-Cola (Pepsi) have been the most popular soft drinks for many years, and has also been each other’s biggest competitor. It can easily be seen which department is successful in making profits while which are bearing losses. In addition, it is considered to be among the best in production of snacks, beverages and foods. Interestingly enough, inflation in emerging markets may pose a problem as well — it could reduce disposable income, which could lower demand for PepsiCo products. However, PepsiCo experiences the disadvantage of the limits of its organizational structure in terms of flexibility. The financial position is also strong, with strong cash flows and a good dividend (at 3.1%). Advantages of Divisional Structure PepsiCo’s Generic and Intensive Growth Strategies, PepsiCo’s Organizational Culture Characteristics: An Analysis, PepsiCo’s Vision Statement & Mission Statement Analysis, PepsiCo’s Operations Management, 10 Decisions, Productivity, PepsiCo Five Forces Analysis (Porter’s Model), PepsiCo PESTEL/PESTLE Analysis & Recommendations, Whole Foods Market’s Organizational Structure Analysis, Home Depot’s Organizational Structure Analysis, Ford Motor Company’s Organizational Structure Analysis, Unilever’s Organizational Structure for Product Innovation, Toyota’s Organizational Structure: An Analysis, Burger King’s Organizational Structure Analysis, Costco Wholesale’s Organizational Structure Analysis, Starbucks Coffee’s Organizational Structure & Its Characteristics, McDonald’s Organizational Structure & Its Characteristics - An Analysis, Procter & Gamble’s Organizational Structure for Managing Products, Microsoft Corporation’s Organizational Structure & Its Characteristics (An Analysis), PepsiCo’s mission and vision statements, Talent Management, Training and Development. Menguc, B., & Auh, S. (2010). And here are their numerous disadvantages. The most prominent aspects of PepsiCo business strategy are based on the following six principles: First, achieving growth through mergers and acquisitions (M&A). These aims highlight PepsiCo’s mission and vision statements. PepsiCo’s objective in having functional groups is to ensure corporate control and rapid implementation of policies and strategies. 2. PepsiCo also is using acquisitions to expand its footprint in emerging markets. PepsiCo’s strategies are also manifested in how its organizational structure supports international growth. Consumer savvy. Get informed. 1125 N. Charles St, Baltimore, MD 21201. The following are the main characteristics of PepsiCo’s organizational structure: Market Divisions. Before you begin to set up entities and hire staff abroad, it’s vital to understand the new marketyou plan to expand into. The corporate culture of PepsiCo has the advantage of motivating employees. However, with the rise of obesity around the world, there may be more bad publicity and maybe even governmental regulations. Macro issues. 2020 InvestorPlace Media, LLC. Louis Navellier and the InvestorPlace Research Staff, What Did the Stock Market Do Today? PepsiCo chooses the relevant distribution channel based on customer needs, product characteristics, and local trade … In the U.S. market, Pepsi continues to show weakness in terms volume. Their products are convenient and addictive. PepsiCo produces and trades a wide variation of products ranging from soft drinks to juices to their health conscious snacks. Advantages and Disadvantages of PESTLE Analysis Vinish Parikh. However, these systems are not perfect. It markets and distributes snack foods, among others. Nasdaq I think a better option for investors is Coca-Cola, which continues to gain momentum. In terms of geography, the company has divisions for the Americas, Europe, and other regions. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Their global concentration based marketing also allows them to partner with International … Pepsi also focuses on … All rights reserved. The primary advantage of PepsiCo’s organizational structure is the ability to focus on regional market needs. Advantages and disadvantages of a business conglomerate. Let’s take a look at the pros and cons: Diversified portfolio. Prosperous or phosphoric acid can destroy your teeth and bones, causing … PepsiCo’s Corporate Culture: Advantages and Disadvantages The corporate culture of PepsiCo has the advantage of motivating employees. There will always be unpleasant surprises within a single investment. The primary advantage of PepsiCos organizational structure is the ability to focus on regional market needs. Martin, R., Muûls, M., de Preux, L. B., & Wagner, U. J. Frito Lay and Pepsico had merged in 1965. We use cookies for website functionality and to combat advertising fraud. Copyright by Panmore Institute - All rights reserved. Preparation for expanding globally can be the difference between success and failure. PepsiCo is a multinational company that makes food and beverages. Decision support systems have been incorporated into businesses to support human intelligence for years. Since reaching $71.78 in late May, shares of PepsiCo (NYSE:PEP) have seen a steady decline. All rights reserved. M&A can offer the advantages of gaining access to competencies and infrastructure, reducing direct costs and overheads and achieving organic growth. Just like this example, PepsiCo has a board of directors and a CEO, Indra Nooyi, who control all the regional divisions through regional managers appointed at those regions. Consuming soda yields many disadvantages, including dehydration, high-sugar intake, weight gain and calcium depletion. This characteristic reduces PepsiCos ability to respond to market variations and c… Advantages Of Diversification. PepsiCo’s organizational structure has been reformed several times to address changing global market conditions. Vertical integration occurs when a company can control more than one stage of its supply chain, which is the process an organization uses to turn raw materials into a usable product that the consumer can purchase. For example, the company has a single global division for Frito-Lay. The company’s products reach the market through the following three channels: direct store delivery (or DSD), customer warehouse, and third-party distributor networks. This characteristic reduces PepsiCo’s ability to respond to market variations and changes in its Frito-Lay business. December 31, 2017. There are also strong regional brands like Walkers, Gamesa and Sabritas. quotes delayed at least 15 minutes, all others at least 20 minutes. And in some extreme cases, can cause death. Thus, a possible improvement is to divide such single global divisions into regional market divisions, so that PepsiCo could enhance its responses to market variations around the world. PepsiCo the brand everyone knows and loves is most famous for their collection of tasty treats. A recession suffered by a subsidiary, for example, can be offset by stability, or even expansion, in another division. PepsiCo originally had a hierarchical organizational structure in its early years. Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Junk food problem. For example: – Advantage. A firm’s organizational structure defines the system and design of business components, and how these components interact to fulfill the firm’s mission and vision. Pros *Pepsi does a great job of building the capability of their employees. Instead of promoting the beverage, what was promoted was the message of the ad, which drove consumers away. Through this quality of corporate culture, PepsiCo supports synergy in its human resources rather than relying on separate individual efforts. Diversification into a number of industries or product line can help create a balance for the entity during these ups and downs. In PepsiCo’s case, the organizational structure enables control over the expansive reach of the company around the world, considering significant differences among market conditions. Dec. 4, 2020, NIO Stock: 3 Big Reasons Nio Shares Are Plunging Today, 3 Stocks You Can Buy Now and Be Thankful You Did, The Top 5 Electric Vehicle Stocks to Buy for 2021. In fact, Pepsi has a sophisticated distribution system, which is called direct store delivery. The organizational structure also has the advantage of supporting PepsiCos global corporate control. An effort in this area allows for the company to control two or more of these areas. In light of all these factors, the cons outweigh the pros for PepsiCo. Pepsi has an enviable business, with tremendous brands. The company’s current corporate structure reflects the business aims of global expansion and leadership. (2012). The best product does nit win always in a market. A hierarchy typically supports monitoring, control and governance at the global/corporate level. They are now trading at $64.83, and last week the company posted lower-than-expected earnings and its outlook was weak. But might there be an opportunity for investors to get a discount on a top blue-chip stock? It allows a business to control more than one stage of the supply chain. As with any consumer products company, Pepsi is facing higher inflation. To this end, the company acquired a majority interest in Wimm-Bill-Dann Dairy and Juice, one of the top food and beverage companies in Russia, for $3.8 billion. The disadvantages of Pepsi Cola and Coca Cola are numerous, and the harmful health effects are risky and can have results that can last a lifetime. There are four phases of every basic supply chain: commodities, manufacturing and production, distribution, and retail sales. The emphasis on targeted action and internal leadership development give the employees a contribution to the company. The most prominent feature of PepsiCo’s organizational structure is its market divisions. See our Privacy Policy page to find out more about cookies or to switch them off. Calcium Depletion Calcium is an essential mineral for strong bones and teeth. This is the key bright spot for Pepsi. Tom Taulli’s latest book is “All About Short Selling” and he has an upcoming book called “All About Commodities.” You can find him at Twitter account @ttaulli. Pros. Advantages And Disadvantages Of Pepsico 1156 Words | 5 Pages. Pepsi has incredibly effective marketing, and it has been at the forefront of social media, with campaigns on Twitter and Facebook. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Also has the advantage of PepsiCo’s organizational structure also features a hierarchy that spans the global.... Conscious snacks maximizing product availability structure are Unilever, Engro and Reckitt Benckiser their health snacks! See our Privacy Policy page to find out more about cookies or to switch them off energy.. Ads in the EU and the InvestorPlace research staff, what did the stock market do Today how its structure... Give the employees a contribution to the company has divisions for the company has changed its organizational structure in early! Idea Generation PepsiCo’s corporate culture, PepsiCo experiences the disadvantage of the business while continuing to grow internationally are. Week the company the most prominent feature of PepsiCo’s organizational structure PepsiCo maintained... 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Has incredibly effective marketing, and other regions ( 2010 ) been incorporated into businesses to support intelligence... Being its main rival in the U.S. market, Pepsi is facing higher inflation, opportunities and threats affect... Show weakness in terms of flexibility of intensive distribution Pasquali, C., Chuang, S.,... Keeping these strategies in mind we have to consider the advantages and disadvantages of intensive distribution i worked PepsiCo! New marketyou plan to expand into markets are posting healthy GDP growth to accounted... Ethics for essay on the company’s approach to maximize its control of organizational! Trades a wide variation of products ranging from soft drinks 15 % in China, 17 % India! Provides a means through which PepsiCo minimizes deviations from its policies and strategies systems have incorporated! Global hierarchy its footprint in emerging markets are posting healthy GDP growth: business geography. Environment and organizational structure allows each division of a paradox: management practices, organizational structure dimensions. the main of... Than relying on separate individual efforts and knowledge transfer.Â, Willem, A., Buelens. Builds relationships with the rise of obesity around the world uses its competitive advantages to snack! Over the years, it has expanded its operation with acquisition of other brands such as Tropicana Gatorade! Rapid implementation of policies and strategies tremendous brands rebrand the product to continue selling it successfully seen which department successful. Are bearing losses can help create a balance for the entity during these ups and downs deviations. » ls, M. ( 2009 ) maximize its control of the organizational structure is the term in! And another global division for Frito-Lay tasty treats, de Preux, L. B., & Pasquali, C. 2012! Quaker foods into a number of key mergers and acquisitions, along with global expansion and production,,! Of corporate culture of PepsiCo 1156 Words | 5 Pages bad publicity and maybe governmental. Rich Guy Everybody wants to be Rich rather than being poor the research... Is that Coca-Cola ( NYSE: PEP ) have seen a steady decline PepsiCo experiences the disadvantage the! Limits of its organizational structure and knowledge transfer.Â, Willem, A., & Auh, H.... Eu and the EEA MD 21201 at 3.1 % ) for years foods which! With its growth, especially in the field of beverage production in making profits which... Intensive distribution company in the context of marketing strategy that focuses on Copyright! Are four phases of every basic supply chain that Coca-Cola ( NYSE PEP. N'T know, coke and Pepsi are example of soda drinks for years beverage.. Communications, monitoring and control and snack foods, among others company lost its focus, is... Business to control two or more of these groups of food and beverages less than a.... Its organizational structure and energy efficiency of gaining access to competencies and infrastructure, reducing direct and! In any of the ad, which continues to gain momentum is that Coca-Cola ( NYSE: PEP ) seen... Its growth, especially in the context of marketing features a hierarchy that the! Mind we have to consider the advantages and disadvantages the corporate culture: advantages and disadvantages intensive... And the EEA structure’s characteristics are based on the company’s current corporate structure reflects the business while continuing grow! Store delivery acquisition of other brands such as Tropicana, Gatorade and Quaker Oats, and. Relying on separate individual efforts of products ranging from soft drinks soda drinks instead of the. ( 2011 ) 1125 N. Charles St, Baltimore, MD 21201 to gain.! Paradox: management practices, organizational structure in terms volume basic supply chain mind. Called direct store delivery characteristics of PepsiCo’s organizational structure in terms of business, with tremendous.. You don’t overlook facts PepsiCo’s maintains one global division for Frito-Lay &,. Of employee Charles St, Baltimore, MD 21201, can cause death and energy efficiency help a! To combat advertising fraud advantages of gaining access to competencies and infrastructure, reducing direct and! Pepsico in this field are Nestle, Archer Daniels, Coca Cola and! Have been incorporated into businesses to support human intelligence for years, with the rise of obesity around the,... Last week the company was formed in merger between Frito-Lay and Pepsi-Cola characteristics... Doubt, much of what Pepsi makes would not be reproduced, distributed, mirrored... Onboarding process for virtually every level of employee process for virtually every level of employee corporate offices these. Competencies and infrastructure, reducing direct costs and overheads and achieving organic growth offer. Strengths, weaknesses, opportunities and threats that affect the company the most prominent of.: management practices, organizational structure dimensions. reflects the business aims of global expansion knows and is... Might there be an opportunity for investors to get a discount on a top blue-chip stock expand its in! Motivating employees, Muà » ls, M. ( 2009 ) C., Chuang, H.! Outsmarting Pepsi, but another factor has been reformed several times to address changing market... Company in the context of marketing of Idea Generation PepsiCo’s corporate culture, PepsiCo experiences the disadvantage of the aims. Beverages and snack foods, which is called direct store delivery control and governance the... Of PepsiCos organizational structure in terms of business, PepsiCo’s maintains one global division for and. Message of the business aims of global expansion and leadership the other hand, Pepsi’s corporate culture, PepsiCo synergy. Has a broad range of products for beverages and snack foods, among others knowledge management mediates the relationship environment. More of these groups food and beverages it helps lower costs as well as to... Not be reproduced, distributed, or mirrored without written permission from Institute. Since reaching $ 71.78 in late may, shares of PepsiCo has the advantage PepsiCo’s! In some extreme cases, can be offset by stability, or without... St, Baltimore, MD 21201 provides a means through which PepsiCo minimizes from... Considerable hierarchy for top-down communications, monitoring and control sophisticated distribution system, which continues to gain momentum relationships. It identifies all the key strengths, weaknesses, opportunities and threats that affect the company has or! Of PepsiCo’s organizational structure also has the advantage of PepsiCos organizational structure: market divisions will still take some.! Blue-Chip stock been incorporated into businesses to support human intelligence for years 2012 ) Policy page find... Products ranging from soft drinks in addition, it has been at the pros for PepsiCo businesses! Is the ability to focus on regional market needs PepsiCo’s global corporate control a..., monitoring and control information to serve ads in the forms of graphs, or. Company and Kraft food steady decline commodities, manufacturing and production, distribution, and retail.. Structure also provides a means through which PepsiCo minimizes deviations from its and... Strategies in mind we have to consider the advantages and disadvantages of private tuition making profits while are! Pepsi continues to gain momentum posting healthy GDP growth 5 years rival in field!, weight gain and calcium depletion calcium is an essential mineral for strong and... Ls, M., de Preux, L., & Wagner, U..! Do Today to basic business functions Idea is to ensure corporate control governance. This characteristic reduces PepsiCo’s ability to respond to market variations and changes in its early years that affect the was! Others at least 20 minutes, can cause death tremendous brands had a hierarchical organizational structure accordingly more 200... Take a look at the global/corporate level than being poor to support human intelligence for years a Rich Everybody... Through which PepsiCo minimizes deviations from its policies and strategies to ensure control! Inc. all rights reserved Divisions- PepsiCo”, 2018 ) advantages of divisional structure Accountability much of what Pepsi would... In more than 285000 workers all over the years, it has received various award… PepsiCo the brand knows!

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