Professional Documents
Culture Documents
INTRODUCTION
Brief History
Organizational Hierarchy
location of factory
Number of total employees
Nature of business
Type of ownership
Key players
Our story begins with the birth of Caleb D. Bradham in 1867. Bradham was born in
Chinquapin, North Carolina in 1867. Chinquapin is a rural community about forty miles
south of New Bern, North Carolina. New Bern is a seaport town which was first settled in
1710 by Swiss and German emigrants.
Caleb Bradham attended the University of North Carolina and the University of Maryland
Medical School. While at the University of Maryland, he worked part-time in a local drug
store. When his fathers’ business failed in 1891, Caleb dropped out of medical school and
decided to open a drug store of his own in New Bern. This drug store was the first home of
Pepsi-Cola, and it was located at Middle and Pollock Streets in New Bern.
Caleb formulated the Taste that Beats the others cold in his new drug store, and in 1893, he
began selling “Brad’s Drink”, which among other claims, was to be a cure for dyspepsia.
In 1898, Caleb Bradham bought the name “Pep Cola” for $100 from a company in Newark,
New Jersey that had gone broke. He then changed the name of his new drink from “Brad’s
Cola to Pepsi-cola, and persuaded a neighbor who was an artist to create the first Pepsi-Cola
logo.
Bradham applied to the state of North Caroli na and to the U.S. Patent Office for a trademark
on the name Pepsi-cola in 1902. He also issued ninety-seven shares of stock for his new
company, and was ready to supply Pepsi to an eagerly awaiting world.
From the back room of his pharmacy, Caleb mixed and sold over 8,000 gallons of syrup his
first year. Having an appreciation and understanding of the value of advertising, he invested
$1,900 of his early profits in promotion of his new drink.
By 1903, Bradham had outgrown the back room of his drug store, and moved his young
company to temporary rented quarters for almost a year before finally settling into its
permanent home, known as Bishops factory, in New Bern. At that time, he also added
bottling lines to his growing syrup manufacturing business.
Caleb had established fifteen additional bottling plants by 1906 to attract the early Pepsi
Generations.
Organizational Structure:
Nature of Business:
Pepsi is a FMCGS (Fast Moving Consuming Goods) produced in bulks. Pepsi is consumed
regularly that’s why Plants work continuously 24 hours.
Type of Ownership:
Ownership of Pepsi is franchise in Pakistan, because Mother Company of Pepsi is located in
USA. In Pakistan Pepsi is working as a franchiser. There are seven franchisers who operate
Pepsi Co in different cities of Pakistan include
Regional Head:
Regional head is responsible for all the activities which are taking place in Pakistan under
any other head of department. Regional Head directly reports to the head office located in
America.
Country Manager:
Country Manager is controlling the other four department heads. He looks after and supports
them in implementing the Pepsi International strategies, policies and rules. At the end he is
responsible to report the Regional Head
Franchise Director:
To look after and to give the moral and practical support Franchise Director uses two other
Designations which are Franchise Manager and the other one is Sales Development
Manager. Any query from any of the bottler can be solved through these two designations.
Marketing Director:
Brand Manager of colas, Brand Manager of Flavors & Brand Manager Aquafina work to
support the Marketing Director. This department is responsible to promote and advertise the
products in the country. No promotion and advertisements can be done by the bottler itself.
Operation Director:
All the activities which take place under the administration of operation head are supervised
supported and controlled by the Operation Director with his two other subordinates i.e.
Operational mangers.
Mission/Goals/Objectives
INCLUDES!
Vision
Mission
Objectives
Our Values
Vision:
To be the premier convenient food and beverages company with brands that are
known and respected in every corner of the world.
Mission:
Objective:
The major objective of the company is to produce and supply highest quality products, which
confirms to both the national and international quality stands. The company is committed to
provide maximum level of customer satisfaction.
Our Values:
Passion For Growth:
We seek to bestow healthy 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.
Collaboration Is Critical:
If we are going to win over the long haul, we have to win as a team.
STEPLE Analysis
Porter’s 5 forces Model
BCG
SWOT Analysis
EFE Matrix
CPM
Space Matrix
IFE Matrix
STEPLE ANALYSIS:
Social Analysis:
Pepsi is highly committed to welfare of humanity and social wellbeing and contributes to its
cause by donating handsome amounts to key organizations like;
LUMS 10 million
Shaukat Khanum memorial Hospital 10 million to patient diagnoses for free of cost
Care Foundation 5 million.
And other NGOs
Pepsi donated a large sum for earthquake victims relief in October 8, 2005, Pepsi
contribute U.S $2 million (Rupees 120 million) to assist victims of earthquake in Pakistan.
Technological Analysis:
Fast production line.
Less input required from humans
Automated Plant produces 110 bottles washing to filling in 1 min.
Main Plant location (which mixes the concentrate with water and send it to its
franchise in seal pack drums)
110% standardized fulfillment
Economical Analysis:
As the main ingredient (concentrate) required making the beverage is imported from
main office in America, frequent changes in the Dollar price can affect the company
economically.
As the company is bound to the agreement with government, its keeping the price of
Pepsi (250ml) at Rs 12, while according to the high cost of production, price should be 16
Rs.
Political Analysis:
Riaz bottler is one of the franchise owners with remarkable political influence in his
territory and at times he try to be abstinent from the company regulations and policies;
this directly affects the company in terms of market share, profits and others.
Government policies changes relating beverages industry due to instability in political
factors
Legislation Analysis:
If the government changes the prices of Beverage industry, then company pass on
30%- 40%of the changed prices to the consumer.
Environmental Analysis:
If the International Standards change rapidly then it can affect the company
internally and externally because the Pepsi is always ready to have updated fulfillment of
international standards.
Company claims that prod uces no Wastage, but any negligence can badly affect the
environment.
Use wastage in recycle process (glass bottles
Non recyclable plastic bottles are a source of environmental pollution.
In other case bargaining power of supplier is low the company get the plastic and glass
bottles for filling from GHANI glass and the company get the material from the supplier on
that price on which the company wants to purchase.
BCG Matrix
Pepsi lies in stars (maturity) due to high market share that is 72% in Pakistan and
high industry growth rate. With the passage of time they are capturing more market share
by enhancing their product line.
They are in stars because of one main reason that is PepsiCo is financially strong.
Their brand name is well known all over the world and have the strong positive brand
image in the mind of customer.
Pepsi is convenient product where ever you go you can find each brand of Pepsi cola.
The main advantage of Pepsi cola for lying in star is that they are targeting every
type of customer and these customers are increasing market share for Pepsi cola.
Threats:
Inventory
0.07 3 0.21 2 0.14 2 0.14
system
Financial
0.10 4 0.40 4 0.40 2 0.20
position
Consumer
0.09 3 0.27 4 0.36 2 0.18
loyalty
Sales
0.08 4 0.32 3 0.24 3 0.24
distribution
Global
0.06 3 0.18 4 0.24 2 0.12
expansion
Organization
0.04 4 0.16 4 0.16 2 0.08
structure
Production
0.07 3 0.21 3 0.21 3 0.21
capacity
Price
0.07 4 0.28 4 0.28 3 0.21
competitive
Management
0.05 3 0.15 3 0.15 2 0.10
experience
Rating Description
Major strength
4
Minor strength
3
Minor weakness
2
Major weakness
1
Liquidity 4.0
Total 19
Total -13
External strategic position:
Environmental stability Ratings
Total -16
Total 20
Conclusion:
Directional Vector Coordinates X-axis Directional Vector Coordinates Y-axis
Strengths:
Weakness:
Strong marketing:
Pepsi cola have strong marketing campaign in Pakistan. They are doing 360’ marketing
campaign for the awareness of their each product. They have different promotional
campaigns for different products. They are also using brand ambassadors in their
advertisement that creates positive image and strong loyalty with the product.
Financially strong:
Pepsi cola is financially strong company they have the potential for more growth and they
can enhance their product line.
Target market:
This is also one of the reasons in the success of the Pepsi cola. Pepsi cola is doing mass
marketing in the Pakistan they are hitting all types of customers and filling the demand of
every type of customer.
Strategies Undertaken
INCLUDES!
Corporate level Strategies
Business level Strategies
Functional level Strategies
Grand
Growth strategy:
When we look at the history of the Pepsi in Pakistan it was started in 1962 as a wholesaler
depot in the tertiary of Karachi and then with the success in 1975 it started its business as a
FOBO (franchise Owned Bottling Operation) as the time passed they have increased the
franchise to 7 which are now defined territories. Till 1962 to date company have increased
the sale and giving the tough time to its international competitor Coke with all its brands
under one Umbrella.
Stability:
Pepsi is continuously working on the stability because they are all the time in need of having
very tough competition from its competitor like coke, and other local brands. Some time to
overcome this problem company increases the percentage ratio of its suppliers, and some
time to its retail store keepers. In the season of Summer Company want its franchise to
produce on the full capacity @ 24/7 which leads them to maintain their market share.
Business Portfolio
Strategic Business Unit:
Pepsi
Pepsi Max
Mountain dew
7up
7up free
Marinda
Business level Strategies
1. Adaption Model:
The basic purpose of this strategy is to match the business strategies with basic
environmental conditions.
Prospector:
Work or act on a corporate strategies. Company always works as a prospector to take
preventive actions. Company scans the environment and after the analysis of the
competitors and situation they plan things. Pepsi cola using the prospector approach
because of “Aqua Fina” launched b6 months before of its exact launched time because that
time coke was going to introduce “Kinely”.thats is why Pepsi took the proactive action and
introduced the “Aqua Fina” before the “Kinely” to capture the market before the competitor.
Analyzer:
Having the knowledge of market share & Competitors Pepsi has planned to launch Tropicana.
Because company analyzed that there is very much room available in these types of
products. After evaluating the overall market then Pepsi has decided to introduce Tropicana.
Defender:
Pepsi some time also act as a defender because to retain the loyal customer and to sustain
the market share Pepsi use the defender strategy according to the situation. Company use
product development/enhance existing product line and also some marketing techniques to
be use to defend the company’s products.
Reactor:
Reactor strategy always be pushed by or to give the full support to the defender strategy,
reactor strategy is basically is the implementation of the defender strategy. e.g. in Ramadan
when coke decrease the price of 1.5 Liter coke from 50-45 then immediately Pepsi acted as
a reactor and also decrease the price of 1.5 Liter Pepsi from 50-45.
o Differentiation
o Cost Leadership.
o Focus
Differentiation:
Some time Pepsi have to work on differentiation as they have launch the product as a
different taste with its competitor like coke (which is strong in taste) so the Pepsi work as a
slightly sweetener taste which is more likely to be used by the all age groups.
Cost Leadership:
As the company earns more and more profit from different territories same as it is company
some time has to bear the losses for some times in order to be the part of Market, and to
maintain the goodwill in the eyes of it customers. Company is bound to the agreement with
government, it’s keeping the price of Pepsi (250ml) at Rs 12, while according to the high
cost of production, and price should be 16 Rs.
Focus:
Pepsi is targeting many different geographical areas inside and outside cities to retain its
customers and to capture more; this is the reason Pepsi use to launch different products
under one umbrella.
When Pepsi entered the market they had just invested i n market in the 1st two stages of
product life cycle and earned nothing. Then in the stage of growth when early adopters buy
the products, Pepsi was in No profit No loss situation but now Pepsi is on maturity stage of
product life Cycle and is earning a lot of profit.
Pepsi never entered the decline stage.
Marketing
Financial
Production
R&D
HR
– Product mix
– Market position
– Distribution channels
– Pricing issues
– Public policy
– Debt polices
– Dividend polices
– Capitalization structure
– Productivity improvement
– Production planning
– Government regulation
– Product development
– Technological forecasting
Research & Development
– Patents and licenses
– Government regulation
Management Strategies
INCLUDES!
HRM
Administration
Decision making (Centralize & Decentralized)
TQM
Motivation and incentive techniques
HRM:
The function of the Pepsi cola to recruit the best creative talent for best outcome.
Recruiting and hiring procedures in Pepsi cola are transparent. Company has proper
methods for recruiting a person and it is visible to everyone.
Pepsi cola hires employees on the basis of merit, education and skills not on the
favoritism and on approaches.
There is proper HR department where HR managers hire the employees on specific
criteria. Personal and penal interviews are conducted for hiring.
HR managers in Pepsi cola also do the performance assessment of the individuals.
Through this HR managers fill the gap that can create problem. And if employees need the
training with the passage of time they organize different workshops for them.
Administration:
Administration department of Pepsi cola have the link with all department in the
company. It handles all the problem face by the departments.
It has the good relationship with the vendor.
Administration of Pepsi cola also handles the petty cash (daily expenses), like
expenses on the visiting of guests etc.
Disbursement of salary is also the responsibility of the administration department of
Pepsi cola.
Administration also creates the harmony between all the departments.
Office furniture, stationary and any technical problem is also handled by the
administration department of Pepsi cola.
Decision Making (Centralized vs.
Decentralized):
All the decisions taken by the top level management but management also involve
the managers of all departments and employee of the company. The procedure of decision
making in Pepsi cola is decentralized. Everybody knows about the mission and everybody
gets involve in the every decision regarding the company’s affairs. That creates the
motivation and empowerment in the employees and through this company gets effective
and efficient results.
Company’s all revenues and profits are also visible to everyone in company. As well
as all the strategies made on the top level management also known by the employees and
everyone take part in decision making that helps a lot in innovation.
TQM:
Pepsi cola’s quality policy is “Make, sell and deliver beverages to the consumer as it
was designed, in order to derive preference.”
Pepsi cola claims that this is one of the safest drinks you drink.
The “One Quality Worldwide” assurance seal appears on the entire range of Pepsi’s
beverages.
In manufacturing the quality controls procedures are fixed.
Pepsi cola used science based standards in manufacturing process.
In Pakistan RBL (Riaz bottler private limited) Naubahar, Riaz Bottler Lahore, Pakistan
Beverage Karachi, Punjab Beverage Faisalabad, Haidri Beverages Islamabad, Northern
Bottlers Peshawar, Sakhar Beverages bottling are largest manufacturer and distributors of
Pepsi cola soft drinks in Pakistan and man ages total quality by focusing on following points:
Provide the skills, knowledge and expertise to deliver the quality of services that their
customer expects and which their reputation depends.
also focus on consumer perception quality
Bench-marking
Continuous improvement in the quality of incoming material and packaging
Upgrade technological capabilities by the acquisition of latest tools and technology to
drive quality approved by PIC(Pepsi International Cola)
By empowering people
Follow the ISO standards
They produce 110 bottles in 1 minute (washing to filling).all the franchisee are
following this standard for filling bottles.
They have the fixed standard for composition of the sugar containing of soft drink
Water: 86-90%
Water accounts for the bulk of all beverages including colas. In other word the water
used in PepsiCo soft drinks must be as safe as possible for human consumption.
Sugar: 10-13%
At Pepsi sugar is bought from approved sugar mills after a supplier qualification
process. After sugar is received in the beverages plant it is subject to further betterment
to reduce the impurities, color etc to achieve Pepsi’s global specification.
Carbon di oxide: 0.3-0.7%
The CO2 in each bottle of Pepsi sur passes that recognized for medical application.
Once the CO2 reaches the bottling plant, it undergoes further purification. At the end each
batch carries certificates of analysis and compliance.
Market Analysis
INCLUDES!
Market of PEPSI:
Children:
Pepsi is heavily consumed and extensively enjoyed by children. They often make their
parents buy them Pepsi as a compulsion.
Youth students:
Many students and adolescence regard Pepsi as a youthful drink and have fun consuming it.
Youth make major target group of Pepsi, so all their advertisement campaigns especially
focus upon the young and spotlight on youthful entertaining Pepsi filled moments.
Families:
Pepsi has become an integral part of table laid down for family lunch and dinner, everybody
at home from young to elderly love to augment their meals with exciting taste of Pepsi.
Religion Any
Nationality Pakistani
Psycho-graphic:
Lower lowers, upper lowers, working class,
Social Class middle class, upper middle, lower upper,
upper upper
Life style Achievers, strivers,
Personality Aggressive
Behavioral:
Occasions Regular and special
Income Rs.6,000+
Lifestyles Strivers
Personality Aggressive
Behavioral:
Occasions Regular and special
Income Rs.6,000+
Lifestyles Achievers
Personality Ambitious
Behavioral:
Occasions Regular and special
Marinda
Geographic:
Country Pakistan
Income Rs.6,000+
Marinda Apple
Geographic:
Country Pakistan
Income Rs.6,000+
Lifestyles Survivors
Personality Aggressive
Behavioral:
Occasions Special
Pepsi Twist
Geographic:
Country Pakistan
Income Rs.10,000+
Lifestyles Strivers
Personality Aggressive
Behavioral:
Occasions Special and regular
Pepsi
Pepsi Max
Mountain dew
7up
7up free
Marinda
Marinda Apple
Pepsi is a quality product and it’s more focus on customer requirement like they have
provided different Pepsi products e.g. Pepsi max and 7up for health conscious people.
Mountain dew for young and innovative generation.
Marinda for teenagers.
The company so much focusing on features of the product they change the style and
cover according to the new product and with time to time for the attractiveness of
customer.
They have different bottle and packaging style of Pepsi, Max, Marinda etc
They are also using the brand ambassador’s picture on the bottle for the
attractiveness.
The style of every bottle they are making easy to carry for customer.
Price:
The products mentioned in product head are sold in market in different sizes and prices that
are as follows!
250ml
500ml
300ml
1.5 liter
2 liter
According to our survey company is using competitor based pricing. Main competitor is
Coca-Cola. Both companies have similar pricing in beverages. They based on each other in
setting the prices.
Place:
Pepsi products are very convenient and available easily in the consumer’s range. In
Pakistan where ever you go you can easily find Pepsi from different stores.
For Pepsi key account are different wholesalers, restaurants and hotels like pizza hut
and KFC and also Metro, Macro which serve as a place for key sale. These are known as
national key accounts and are very important in term of competition.
Distribution channel of Pepsi is!
Promotion:
Pepsi is doing heavy marketing to create the best image in the mind of customer
about Pepsi.
They arrange and sponsor different concerts and occasions like they sponsor the
crickets etc.
The Pepsi is also doing outdoor advertising through billboards like recently Pepsi have
launched Pepsi max and promoting through billboard that is in liberty near Husain Chowk.
In their advertisement they are creating positive image through brand ambassadors
Anny and Adnan semi
They are also doing radio advertisement the same advertisement on TV.
Pepsi promoting itself through its website.
Company launched every product with different marketing campaigns according to
the product.
Other 5%
Pepsi Unique Selling Points (UPS)
Strong brand name:
As the “PEPSI” itself is a strong brand name. Whenever the customers feel thirst
he/she always think about the PEPSI not even the beverage, Which makes the Pepsi brand
name as a stronger brand name this is the reason that Pepsi gets the advantage of Word
of mouth advertisement as well which ultimately raise the sales of Pepsi.
Quality:
When we talk about the quality of Pepsi as a company they are very much concern
about product quality. To make sure that the product is up to Standards Company have
many checks in different departments. As they have special department of QA which
always verify the quality standards.
First when the product reaches (US -> SINGAPURE -> production plant) to the
production plant in a carbonated form in sealed packs drums which use to be given to the
Franchisers. In the production department only foreigners are allowed to work. The
company responsibility shifts to the franchisee which makes sure the quality of the
product. Company has appointed one QA person with the franchise and on the other hand
company often sends their representatives to the production of the franchise to overcome
the hurdles in meeting the quality standards.
Economy:
The price which makes the product to be accessible to the final customer. Now days it
is better to have soft drink which is available in the shape of packed bottles and cans.
People prefer to have economical product to be taken as a drink that is the reason Pepsi
taking the advantage of Unique Selling Point.
Convenience:
Pepsi is available to everywhere, any store or any food restaurant this is the thing which
make the product convenience to the customer which is a Ups point as well for the company.
Taste:
The taste of the product is attractive to all, like any child, young, married or old every one
like the taste of Pepsi which we can say it fits to all.
Addiction:
One more and huge unique selling point can be the addiction of the people that they need
the Pepsi with mostly their all the meals, especially children. They are found of having Pepsi
with them all the time.
Competitive analysis
Direct Competitors:
Primary Competitors:
1. Coca Cola
2. RC Cola
The primary competitors of Pepsi are coco cola and RC cola. These competitors are very
strong and powerful in the market due to their huge market shares and customer
satisfactions. And there is a big challenge for Pepsi to take over the direct competitors.
Secondary Competitor:
1. Amrat cola
2. Shendy cola
Indirect competitors:
Juices
energy drinks
Tea and coffee
Mineral water
Market Penetration:
Pepsi is spending million of rupees to advertise the product even it use to be the reminder to
the public because almost everyone knows the brand name and its product.
Market development:
All the Companies use to be in found of having new geographic areas. In order to have
market development company acquire the small companies and to provide its product to
everywhere they have the third part services(PTN) to make sure the availability.
Product Development:
To cater and to retain the loyal customers company have offered many other products in
different sizes.
Related Diversification:
Pepsi have its related diversification in the Water with the name of Aquafina. This product
has its own brand image and the target market as well.
Unrelated Diversification:
Under the unrelated diversification head Pepsi have launched the different product like Lays
(available in different flavor and packing) and the other is Kurkuray (available in different
flavor and packing)
Financial Strategies
INCLUDES!
Depreciation and
amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1426
Change in inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
... (204)
Other,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107
Divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
... —
Financing Activities:
Proceeds from issuances of long-term
debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2168
Payments of long-term
debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (579)
Cash dividends
paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2204)
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.41
Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
December 29, 2007
Cash and cash equipments 4, 389 Account payable and other current 151
liabilities
Short term investments 2, 290
Income taxes payable
Accounts and notes
receivable, net
991
Inventories Total current liabilities
7, 753
Prepaid expenses and other Long term debt obligations
current assets 10, 151 Other liabilities
646
Goodwill 1, 248
Capital in excess of par value
17, 325
Software Costs:
We capitalize certain computer software and software development costs incurred in
connection with developing or obtaining computer software for internal use when both the
preliminary project stage is completed and it is probable that the software will be used as
intended. Capitalized software costs include only (I) external direct costs of materials and
services utilized in developing or obtaining computer software, (ii) compensation and related
benefits for employees who are directly associated with the software project and (iii) interest
costs incurred while developing internal-use computer software. Capitalized software costs
are included in property, plant and equipment on our balance sheet and amortized on a
straight-line basis when placed into service over the estimated useful lives of the software,
which approximate five to seven years. Net capitalized software and development costs
were $652 million at December 29, 2007
Turnover ratios:
Inventory Turnover
Sales / Average Inventory = 39,474 / 2,290 = 17.24
Fixed Assets Turnover
Sales / Fixed Assets = 39,474 / 24,477 = 1.61
Account Receivable Turnover
Annual Credit Sales / Account Receivable = 39,474/4,389 = 8.99
Total Assets Turnover
Sales /Total Assets = 39,474 / 34,628 = 1.13
Return on Investment:
Net profit =
Capital employed = 5658/26875 = 0.21
Capital employed= Total assets – current liabilities
= 34628 – 7753 = =26875
Other Strategies
INCLUDES!
Procurement
production
Procurement Strategies:
To truly understand the needs of our consumers, customers and to succeed in the
marketplace, PepsiCo must reflect that diversity in our supplier base and in everything we
do. An integral part of our mission is a commitment to purchase from a supplier base
representative of our employees, consumers, retail customers and communities.
As part of our Responsible & Sustainable Sourcing strategy at PepsiCo, we are committed to
working in partnership with our suppliers to follow a specific code of conduct in the areas of
employee labor conditions, health & safety, environmental management and business
integrity. We have updated our policies to simplify communications about PepsiCo’s values
and how they extend to our supply chain partners.
Below, our updated Supplier Code of Conduct is provided. We are issuing this uniform
PepsiCo-wide supplier code of conduct as a single document to provide explicit
communication of expectations in these important areas to our suppliers and their chain of
suppliers. While the vast majority of our suppliers are already working to these or similar
standards, and may well have Supplier standards that reach back into their own supply
chain, we intend to work closely with our suppliers to insure they fully comply with our code
of conduct listed below.
Business Conduct Standards:
PepsiCo expects its suppliers to conduct business responsibly, with integrity, honesty and
transparency and adhere to the following standards:
Comply with all applicable laws and regulations of the countries of operation
Compete fairly for our business, without paying bribes, kickbacks or giving anything
of value to secure an improper advantage
Encourage a diverse workforce and provide a workplace free from discrimination,
harassment or any other form of abuse
Treat employees fairly and honestly, including with respect to wages, working hours
and benefits
Respect human rights and prohibit all forms of forced or compulsory labor
Ensure that child labor is not used in any operations
Respect employees’ right to freedom of association, consistent with local laws
Provide safe and humane working conditions for all employees
Carry out operations with care for the environment and comply with all applicable
environmental laws and regulations
Keep financial books and records in accordance with all applicable legal, regulatory
and fiscal requirements and accepted accounting practices
Deliver products and services meeting applicable quality and safety standards
Support compliance with this Code by establishing appropriate management
processes and cooperating with reasonable assessment processes requested by PepsiCo
Observe PepsiCo’s policies regarding gifts and entertainment and conflicts of interest
when dealing with PepsiCo employees
Production Strategies:
Production is like a back bone in any manufacturing organization. In PEPSI the main
production materials are!
Sugar
Concentrates
Water
Ammonia etc
Co2
All the raw material which is used in the production process is approved by the Pepsi cola
international. These materials should be according to the standards of the PCI. If in any case
the material does not match with the standar ds PEPSI has a right to return it to the supplier.
In this case the entire cost of the material is beared by the supplier. This strong check on the
material is because of maintaining the high quality in the products which is the credentials
of the Pepsi cola products.
Capacities of Plants:
Currently the company is operating with five (05) plants. Out of these five (05) plants, three
plants are dedicated for the production of only 250 ML RB bottles. While plant # 01 produces
1500 ML (PET) & 1000 ML (Glass) bottles. Plant # 02 produces 1000 ML (PET), 250ML (NR)
and 1500ML (PET) bottles. Capacities of each plant are as follows:
See Appendices
The company has introduced its own mineral water which is called “Aquafina” in two
packages of 600ML & 1500ML and company is planning to install a plant for juices.
Quality control:
Quality control is the basic organizational objective of PEPSI. Quality check is made from
zero level to final products. For this purpose samples are taken from the production to check
the quality. This sampling is done after each an hour or half an hour. These samples are
tested according to the PCI standards
Production staff:
Employees are directly involved in the production process. Whereas the helpers are the
indirect employees Moreover direct supervisor and helpers are also there. Indirect
employees are about 350 in number, who are not directly involved in the production process
but they are essential part of the production department.
Laboratory:
In order to maintain the high quality the plant has a well equipped lab. Laboratory is
sufficient to measure the standards and to test syrup of different flavors. The well equipped
lab enables the smooth flow of production process.
Product line :
The major brand of PEPSI is Pepsi 250 ml, having highest market share which is 47% as
compared to other brands. The other brands produced by the organization are!
Pepsi
Pepsi diet
Marinda
Teem
7up
7up diet
Mountain dew
Production of new brand:
If PEPSI wants to produce a new brand they have to get permission from PCI. This permission
is the requirement for the production of a new brand of Pepsi cola international. PEPSI
currently installed its new caning plant. This plant is also established after the permission of
PCI because PEPSI meets the standards of PCI. As concentrate of each brand is separate and
these concentrates are provided by the PCI so that they have to rely on PCI for getting the
concentrate of new brand.
Water Treatment:
Water is very important ingredient regarding the beverages industry. The bottles are filled
with concentrate and treated water and their specific ratio is mixed up and filled into the
bottles.
Raw water i.e the water that we take from the earth, is treated in beverages industry and
then is used for bottles filling.
L6 :- YEAR
C : – FRANCHISE CODE
3 :- PLANT NO.
Above type of coding is pasted on each bottle produced. Then the final product moves
towards packing machine through conveyor. Here the bottles are put into the shells (Crates)
and the crates are then put on the pallets from conniver. Finally these pallets are carried by
lifter and put in the filled stock.
Reports:
Production department maintains following reports;
Control Procedures
INCLUDES!
Marketing control
Production control
Quality control
HR Control
Finance control
Marketing control:
Measuring and monitoring the marketing planning process:
There is no planning without control. Marketing control is the process of monitoring the
proposed plans as they proceed and adjusting where necessary. If an objective states where
you want to be and the plan sets out a road map to your destination, then control tells you if
you are on the right route or if you have arrived at your destination.
There are two approaches Pepsi suggests to take into account when thinking about human
resources (HR) at company. First, Pepsi think in terms of process, second in terms of how do
employees affect the whole business. : hire, education, management, retire. All the stages
must be processes carefully, as they could fully change your business. For instance, if you
will have the best system to hire stuff, but it will be working slowly, then you will fail. If your
education system will allow training everyone, but will not allow checking the actual
performance generated by training processed, then you will fail. If your best people will
retire, then you will lose.
So, that’s why it’s really important to measure and control all processes involved into
employee’s relationship. People, who you work with, should understand what your goals are
and how they will help to achieve these goals. This is the key idea of manage and control in
employees management processes.
Another approach is focusing on how someone’s job affects the company. It’s obvious that
even if someone works in Sales then he or she will affect not only the financial part of the
business by generating sales, but also all other parts.
For instance, sales person will be involved in entire company processes, such as education
and knowledge sharing. This person will also work directly with customers, so he or she
might not just sale, but get a valuable feedback from end users of your product. These
people will also help your company to grow not just in terms of sales, but in terms of better
business processes and business efficiency.
Finance control
The management of a firm’s cost and expenses in relation to budgeted amounts.
The section is broken down into 3 sub-sections
Cash Flow:
Cash flow is the balance of all the money that flows into and out of your company account
each day.
Regardless of whether or not you are trading and making sales/profits, you will need cash,
and thus it is important that you manage the liquid finance you do have, and that you plan
for cash flow in the future.
There are two principal factors that will affect your cash flow.
Inflow:
Revenue created by Cash sales.
Outflow:
Expenditure including Salaries and wages
Pitfalls:
PEPSI CO has made sure that all transactions are documented and full record-keeping
system is in place and ensures that sufficient cash flow is available to meet Taxation
payments.
Taxation:
Pepsi is very clear about Taxation position from the onset (take professional advice) and also
clear about requirements for VAT (Value added tax) registration. Pepsi is contributed heavily
in taxes.
Quality control:
Quality control is a process employed to ensure a certain level of quality in a product or
service. It may include whatever actions a business deems necessary to provide for the
control and verification of certain characteristics of a product or service. The basic goal of
quality control is to ensure that the products, services, or processes provided meet specific
requirements and are dependable, satisfactory, and fiscally sound.
Essentially, quality control involves the examination of a product, service, or process for
certain minimum levels of quality. The goal of a quality control team is to identify products or
services that do not meet a company’s specified standards of quality.
Quality control is the basic organizational objective of PEPSI. Quality check is made from
zero level to final products. For this purpose samples are taken from the production to check
the quality. This sampling is done after each an hour or half an hour. These samples are
tested according to the Pepsi cola International standards.
Laboratory:
In order to maintain the high quality the plant has a well equipped lab. Laboratory is
sufficient to measure the standards and to test syrup of different flavors. The well equipped
lab enables the smooth flow of production process.
Problem Section
INCLUDES!
Strategic Alternatives
INCLUDES!
Pepsi has enough resources and finance to enhance the product line aggressively in Pakistan
as well. But in-stable economic, political and security conditions is Pakistan are a big hurdle
in making bigger investments in Pakistan.
To overcome these problems government of Pakistan should take some initiatives to boost
up the industrial sector.
Another internal factor which is an obstacle to enhancement of the business is high
operating cost of production which makes company bound to minimize its profit margin.
Recommendations:
Train local employees instead of foreigners to work in production Department
Update TQM Standards for betterment of Continuous Processes
Improve Packing Process to Maintain the quality in different Packing(250ml and cans)
Stop In-house Production
Implementation of Rules within the Territory of All the Franchises
Install vending machines in different public places to promote product and brand
name.
Mobile Vans must be introduced to attract the consumers towards Pepsi brands
References
Ghulam Ahmad Rana
Imran Sarver (Area Sales Manager of Pepsi)
MR Atif (production Manager of Pepsi ,Gujranwala)
Internet (Pepsi international, Pepsi India)
Shaheen Raza (Regional Sales Manager Of Geo TV)
Riaz Bottlers (PVT) LTD
Article TALENT MANAGEMENT