Strategic Leadership Session 11

PepsiCo

Last week we have reviewed an interesting case study about PepsiCo Company.  It is second largest beverage company in the world with the wide range of products. It generates more than $1 billion in annual retail sales and produces many well known brands like Pepsi, Tropicana, Gatorade and others. Indra Nooyi is the Chairman and CEO of Pepsico and as well one of the top female business leaders in the world.  She has decided to shift company’s portfolio and bring some changes in order to generate more profits.

Company is challenging themselves by trying to think more about the consumer and segmenting products into 'fun-for-you' 'better-for-you' and 'good-for-you' classes. PepsiCo is trying to expand more in healthy products business. As well company is showing their high social responsibility by launching $20m online competition for nomination of worthy causes in 2010, however too much focus on society can be seen as a drawback, as the campaign mentioned above, did not generate increase in company’s product sales. PepsiCo is trying to differentiate itself by adapting to local cultures, it is very important to company as they are trying to get into such growing markets as China. For example making chips with flavours which are poplar just in particular country or region.

Case study shows that there is a clear balance between importance of social responsibility and profits orientation. PepsiCo is trying to balance between them, as being able to respond to customer needs is the key in this competitive market.

PepsiCo strategic leadership style can be compared to IDEO and Madonna case studies as they are always looking for new opportunities and are willing to do changes in the organisation in order to pursue success. As well there are some similarities with NASA management style, as PepsiCo seems to be well organised and following clear plan.

Finally I would recommend PepsiCo not to over focus on social responsibility, as profits are very important in order to survive between the competitors, not to repeat same mistakes, as launching unsuccessful products, and invest more in advertising, as brand awareness can bring a big impact in product sales.