Table of Contents
Executive Summary
The world is an ever-changing global market and companies have to continually redefine and reform their strategies to fit and compete with other companies. PepsiCo has not had an easy time in rebuilding their organizational structure and strategy as it is ever expanding and reaching global markets through the internal drive of their leaders. The systems and designs that push the company forward are the key points that help in the realization of PepsiCo’s mission and vision. Having a vast set of strategic choices, while maintaining the original culture that the company was initiated with, crucially enables PepsiCo to have the much needed broad reach to the world while keeping the need for a marketing mix.
Understanding the components that make PepsiCo a global giant is crucial as through it, the challenges and changes that can be made to curb and compete with other brands in the same market. From the findings based on the company, it is clear that there lies a massive hole in the organizational structure which has to be filled to ensure that PepsiCo runs at its best.
Introduction
From the beginning modules, it is clear that PepsiCo is run through three major components, the market divisions, the functional corporate groups, and the global hierarchy (Bachmeir, 2013). This report will clearly describe PepsiCo’s mission in the worldwide market, the strategic mechanisms employed, and the organizational structure, how fit and unfit the components are to each other, as well as explain the company’s sense of business ethics. As a recommendation to the current company Chief Executive Officer, the report will outline the changes that if implemented, could make the company more successful than it is today.
PepsiCo Mission
PepsiCo’s mission revolves around being responsible for the markets that they operate in while also being responsible for themselves so that they can make profits through the markets they sell their products. PepsiCo mission is to become one of the leading global consumer product companies that offer both beverages and foods conveniently (Metz, 2015). The company’s goal is to not only become one of the premier consumer companies but also to dominate all the global markets that are profitable. The mission of PepsiCo is to offer returns and financial rewards to their investors who help the company in cutting new ground through their support and leadership. Not only will the investors be rewarded, the employees are given an opportunity to grow and be enriched so that they can give their all to the success of the company through their skills. Finally, the company strives to become ethical in their operation by conducting business fairly, through honesty, and integrity.
There is a sense of fit when the company’s mission is compared to the strategy and organizational design that it has put forward. Mainly because of its commitment to achieving financial success through fair business while ensuring that the customers are happy and hungry for more and the general community is positively impacted (Metz, 2015).
PepsiCo Strategic systems
PepsiCo has various strategic control systems that act as the decision makes for operations and to which are the bases for the success of the company both locally and globally. The design of goods and services is made to fit the current demand and preferences for people from all walks of life. The strategic system that PepsiCo implements in their design of goods and services are through the extensive market-based research done to understand what product has to be developed and innovated to fill in the gap (Hill et al., 2014). For Example, by following the current market trends and lifestyles, PepsiCo can know the way forward in the production of future variances of the products.
For a strategic component to be introduced and implemented at the PepsiCo Company, quality has to be managed and put as the highest priority. Each strategic decision has an objective of ensuring that quality is optimized and set to higher standards and the consumer expectations are met entirely (Bachmeir, 2013). I would say that the quality management component of strategic control fits with the mandate of the company. PepsiCo operations control and management have a mission to provide good quality products as it’s highlighted in the company’s ‘Human Sustainability’ mission. An example of quality management is the introduction of improved beverages and foods such as the less-salt Frito-Lay goods and the low-calorie drinks.
Supply chain and inventory management play a significant role in controlling, setting decisions and goals for PepsiCo. Each strategic decision that is made by the consumer goods giant is optimized by the operations manager. The operations management fits the current supply chain with the current demand for intermediary product and materials (Sharma and Arora, 2017). PepsiCo has in the recent past been able to fit the components of the supply chain with the mission and organizational elements through the process of diversifying and distributing their extensive supply hubs from around the world.
In the case of controlling and managing the inventory, PepsiCo has put more emphasis on automation. To efficiently achieve the goals and the set mission, PepsiCo approves automation due to the high level of adequacy, cost minimization, and schedules that come with using machines (Animashaun, 2017). However, the mission to develop the employees and the community is not pushed aside as inventory managers are hired to actively access and check on real-time data that is processed by the computers so that they can make scheduling, supply, and inventory decisions.
PepsiCo Organization Components
Even though the other components have linked well with each other, PepsiCo organization structure and elements have been shaky. In the early years, PepsiCo relied on a hierarchical structure of organization of which it changed later. The changes came about due to the number of acquisitions and mergers that were taking place to drive the goal of global domination and expansion (Hill et al., 2014). The organization’s structure has then been shifted to three components which separately relate to the mission and strategy of the company. Firstly, PepsiCo has become a prominent figure in dividing its markets. The organizational structure has become more based on geography and business opportunity. Geographically, the company has introduced different products and cultures that go along with the beliefs of the continent that they are selling their goods an example being PepsiCo Asia and PepsiCo Europe.
PepsiCo has developed corporate offices that perform the primary office business globally to ensure control and fast implementation of strategies and policies. The Global hierarchy which spans across the global company only functions to monitor, govern, and control at the corporate level (Animashaun, 2017). By maintaining the top-down control and communication, there are fewer deviations from strategies and policies. The organization structure is however unfit with the mission and strategy as it is not flexible regarding changes for example in Frito-Lay business which highly varies.
Company sense of Business Ethics
PepsiCo in its code of ethics indicates that being responsible and ethical isn’t the only good thing to do; it is the best thing to do for business. Ethics act as the cornerstone for governance strategy whereas the company values are the guiding compass which helps both the management and workforce to perform their duties with a purpose both environmentally and socially (Mboga, 2017). The sense of business ethics is observed in the way the company cares for its customers, speaking with candor, balancing the need for short-term and long-term, selling acceptable products, as well as respecting their competition (Ferrell and Fraedrich, 2015). The global code of conduct ensures that there exists respect in the workplace, shared responsibility with the shareholders, integrity at the worldwide marketplace, and all the activities performed are ethical.
The only question that is raised in the ethical code of the company is the way the community is taken care of as well as the subsidiaries who work under PepsiCo (Ferrell and Fraedrich, 2015). The government laws under which the company operates in different countries are different and hence there has to be a need for respect in diversity and culture.
Changes required
To ensure that PepsiCo is successful both now and the future, I would introduce changes to the organizational structure as well as the ingredients of the products being produced by the company. The organizational structure has to be filled and led by a team of talented and focused individuals who understand the organization right from its roots and can fuel the excellent positioning of the company in the global market for sustainable growth both now and the future (Jones, 2013). It is clear that PepsiCo faces problems in navigation and supply. Complex operations and supply conditions around the world require complex information solutions which should be acquired as well as trained personnel’s who would ensure that there is responsibility in all the beverages and foods that are in transit from all across the world. Through the proper leadership of the corporate offices and information systems, PepsiCo will be able to expand extensively, set global trends, and reshape the consumer industry (Hill et al., 2014).
Secondly, the company has not been taking complete advantage of the healthy shift in business as its closest competitors are doing. The World Health Organization has been on the front line campaigning for fewer sugar intakes by putting limits on the amount of sugar that one can consume in a day. As the Chief Executive Officer at PepsiCo, I would ensure that all the sugary products have a reduction in the number of calories that they contain (Jones, 2013). The mission would be to reduce the calories present in beverages to just about a hundred calories per can which at the time would the lowest about the closest competitors.
Conclusion
In conclusion, PepsiCo has one of the most complex and working organizational structures in comparison to other global companies which makes it a must to have a working company strategy that can turn their business into profits. To become a global leader in beverage and consumer industry, PepsiCo has to not only have the backing of their shareholders; they must have the support of their loyal customers. The customers and the community have to fit into the organization’s mission, or else PepsiCo is doomed to fail. It is the ethical considerations that PepsiCo has that enable it to have such a significant impact and market share in the world. The only changes that I would introduce to the company are more responsible and produce healthier products with less calorie content.
- Animashaun, O. S. (2017). An investigation of project management at PepsiCo Company (Doctoral dissertation, Тернопільський національний технічний університет ім. Івана Пулюя).
- Bachmeier, K. (2013). Analysis of marketing strategies used by PepsiCo based on Ansoff’s theory. GRIN Verlag.
- Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
- Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
- Jones, G. R., & Jones, G. R. (2013). Organizational theory, design, and change. Upper Saddle River, NJ: Pearson.
- Mboga, J. (2017). ETHICAL SOURCING TO ENSURE SUSTAINABILITY IN THE FOOD AND BEVERAGE INDUSTRY AND ELICITING MILLENNIAL PERSPECTIVES. European Journal of Economic and Financial Research.
- Metz, F. (2015). Pepsi’s mission statement. An analysis.
- Sharma, P., & Arora, M. (2017). Strategies to Build Organizational Commitment in Challenging Times: A Development Framework. Global Performance Challenges, 431.