Pepsico

ECONOMIC ENVIRONMENT OF BUSINESS PROJECT MMS-I (Sem- 2) CHANAKYA BATCH 2008-09 DATE- 19/03/2009 SUBMITTED TO: Ms. GITANJALI KAPOOR

GROUP MEMBERS .

Roll Nos Names IZHAR MUSHRIF C-15 ANU PILLAI C-28 ANANDITA SINGH C-34 SOURABH SURYAVANSHI C-35 AMIT JAIN C- 44

• PEPSICO IS A WORLD LEADER IN CONVENIENT SNACKS, FOODS AND BEVERAGES.

HISTORY OF PEPSICO



Pepsi-cola & frito-lay.



Merger of two companies in 1890.

• Herman Lay - chairman of the board of directors of the new company. • Donald M. Kendall - president and chief executive officer. • The new formed company reported sales of $510 million and has 19,000 employees.

Mission: Mission • To be the world's premier consumer products company focused on convenient foods and beverages. • Growth and enrichment to our employees, our business partners and the communities in which we operate. Vision: Vision • "Pepsico's responsibility is to continually improve all aspects of the world in which they operate – environment, social, economic – creating a better tomorrow than today."

INDUSTRIAL OVERVIEW • C.E.O. Of Pepsico :- Indra K. Nooyi • Fortune 500 rank: 59 (previous: 63) • Oligopoly. • In US 3,000 companies which manufacture & distribute beverages. • Pepsico entered India in 1989

COLDRINKS

JUiCEs

SNACKS

HUMAN RESOURC E

• People are greatest strength. • Goals are to attract, hire, develop and retain the most talented people. • Expanding Opportunities Through Diversity and Inclusion To understand the needs of international and diverse markets.  To continually evolve culture.  In US, it includes African Americans, Latinos/Hispanics, Asians, Native Americans, Women, and Enable, for individuals with disabilities.

• Occupational Health and Safety – Safe and healthy workplace - a basic human right • PepsiCo Human Rights Workplace Policy  Respects the dignity of workers in the workplace.  Fair wages, benefits and other conditions of employment.  No use of child labor.

 No discrimination – equal opportunities for all associates.  Comply with all applicable laws, regulations, and other employment standards. • Speak Up To promote high ethical standards and open communication across a global organization. • HIV/AIDS  Committed to make a significant contribution to the fight against this, and to assist employees and family members affected by it.

• Employee Benefit Programs Comprehensive benefits packages designed to address the health care and financial needs of employees, both now and into retirement. • Awards

Employee Learning and Development • Pepsico University • Robust program for helping associates manage their careers. • 360-degree feedback process • In 2007, introduced a concept called "One Simple Thing,“- strives to help associates better balance work and home. • All employees receive regular performance and career development reviews annually.

ECONOMIC ENVIRONMENT

Micro - Economic • Factors close to the company that affect its ability to serve its customers.

Customers * Offers consumers a range of products, from treats to healthy eats. * Gives consumers choices across the spectrum. * Playing a responsible role in health and wellness by encouraging people to adopt healthy, active lifestyles. * World-class scientists. * Continuously Introduces new food and beverage products that offer nutrition benefits. * Reformulating some of their

Market Intermediaries • Retailers and bottlers. • PepsiCo commissions retail customer surveys that measure customer satisfaction. • Target setting and strategic planning. • Highest level of service . • Works closely to assure that feedback is understood and addressed as quickly as possible.

Suppliers • Diversity and inclusion. • Developing partnerships with minority-owned and women-owned suppliers to build the world-class supplier. • Creates mutually beneficial relationships that expand PepsiCo's sphere of activity. • Builds community infrastructure by providing employment, training. • Give opportunities to qualified minority and women suppliers a chance to succeed.

Competitors The competition is very high in this industry• Currently ranks 2nd in branded food and beverage manufacturers in the world, by net sales, trailing only Nestleviii. • Ranks 2nd in carbonated beverages, trailing only CocaColaviii. • In total beverage sales in the US they rank 1st with about 25% of the market share.

Market Share in U.S.

MACRO - ECONOMICS Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole

The Company’s Macro economics

PepsiCo Environmental Policy “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate –environment, social and economic – creating a better tomorrow than today.”

ECONOMIC forces  Shareholders  Associates  Retailers  Suppliers  Governments  Technology

SOCIAL ENVIRONMENT

TECHNOLOGICAL ENVIRONMENT • PepsiCo has leveraged its knowledge in contract farming. • Partnered with the Government of Punjab to help farmers for citrus farming. • Assured availability of high end technology • Established collaborations for development of agriculture.

LEGAL AND TAX • Meet the local Indian standards (Health Ministry Standards for carbonated beverages • Prevention of Food Adulteration Act (PFA) directive on the use of water in the preparation of soft drinks. • They also comply with Bureau of Indian Standards (BIS) for packaged drinking water. • The ‘One Quality Worldwide’ assurance seal appears on the entire range of PepsiCo’s beverages. • Dispute in name to ownership of pepsi brand name.

Financial information • • • • • • •

Market rate of pepsico – 49.25$ Market valuation – 76490$ million Revenue – 39474$ million EPS – 3.21 in 2008 ( last year - 3.41) DPS – 1.60$ per share Net profit margin – 11.9% Excise Duty – 32%

OPERATIONAL OVERVIEW

Business visionmaking tomorrow better than today. Contribute to the country, consumers, farmers and people. Investment - U.S.$1 billion (in India). Employment - 150,000 people including suppliers and distributors. 43 bottling plants in India. 15 – company owned & 28 franchise owned.

BOTTLING PLANT

Global operations • Frito – Lays america • Frito – Lays international • Pepsi – Cola North America • Pepsi - Beverages • Gatarade – Tropicana North America • Quaker foods North America

DISTRIBUTION –

–

Aim of Pepsico All products in its portfolio within a distance easily reachable by Distribution Methods Direct Store Delivery (DSD). Broker Warehouse System. Vending & food service system & pre- sell method.

DISTRIBUTION CHANNEL • Supermarkets / retail stores. • Fountain / restaurants. • Convenience stores. • Vending machines & other beverages foods.

distributing &

snack

MARKETING • Blue and red globe trademark • Pepsi Challenge - Pepsi-Cola Vs Coca-Cola. • In 2007, PepsiCo redesigned their cans for the fourteenth time. • More

than

thirty

backgrounds introducing

on a

new

different

each

can,

background

every three weeks. • 2008, Pepsi overhauled their entire

Contd…

• 4th quarter of 2008 Pepsi teamed

up

with

Google/Youtube to produce the

first

entertainment

daily show

on

Youtube for Youtube. Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring contest

Home for

the

Cup"

Canada's

Brand Ambassador • Priyanka chopra & Shah Rukh Khan

• Kareena Kapoor – Kurkure

• Katrina Kaif – Pepsi Slice

Environmental Policy –

– –

–

–

Encourage conservation of natural resources, recycling, source reduction and pollution control. Establish metrics to monitor environmental performance. Implement environmental management systems to identify and manage environmental risks, obligations and opportunities. Work with licensed bottlers, suppliers and customers to reduce the environmental impacts of the products. Apply sound environmental management practices where the judgment, existing legal requirements are insufficient for the operations.

Water – Conserving Water in the Operations. – Reducing Water Use in Agriculture. – Leaving a Positive Footprint on Society. China Women's Development Foundation. The Earth Institute. WaterPartners. Safe Water Network.

Energy Reducing the Energy Use. Harnessing Renewable Energy. Partnering for Change.

Packaging and Solid Waste Follow five principles of sustainable packaging design: Reduce Reuse Recycle Remove Renew – Using Less Material in Packaging. – Reducing and Recycling Waste. – Solid Waste.

Respect for Employees. Global Relations. Health and Safety. Business Gifts and Entertainment. Environment. Political and Community Activities. Confidential Information and Insider Trading. Accounts and Record-Keeping. Protection and Proper Use of Company Assets.

Introduction of Pepsi Natural. Introduction of Pepsi Throwback and Mountain Dew Throwback. Set corporation-wide goals to reduce water and energy consumption by 20% and fuel consumption by 25% by the year 2015. Frito-Lay North America will add more than 1,200 fuel efficient Sprinter vehicles to its nationwide fleet.

conclusion

SOURCE:

• WEBLIOGRAPHY – www.pepsico.com – www.google.com – www.wikipedia.org