Measurable Objectives
PepsiCo is an international beverage and food manufacturer with an annual $1 billion worth of product portfolio. The company has robust objectives that it intends to accomplish both in the short and long terms. In the next three years, PepsiCo intends to advance its concept of sustainability around the world and drive innovation and category leadership to meet the needs of customers. It also hopes to lead the future growth of its industry by reaching out to more customers using its best-in-class portfolio on several occasions. Additionally, PepsiCo intends to use technology and data to connect with its consumers and customers as well as link its customers with resources. The company is also positioning itself to make positive and lasting impacts on social communities around the world and also empowering more than its 169,000 employees whom it considers its problem solvers and passionate compatriots.
In terms of measurable objectives, the company’s focus is mainly centered around three areas. These include leading and growing its beer category, digitalization and monetization of its ecosystem, and optimization of its business. Within the next three years, PepsiCo wants to venture into the beer-making category. This will be an all-inclusive beer made of local and natural ingredients (Cardona & Rey, 2022). The company postulates that with the rising consumption of beer, especially among Latin America, Asia, and African markets, this area carries immense opportunities for growth. Specifically, PepsiCo has its focuses on premium beer, whose growth is twice that of premium spirits. Therefore, PepsiCo’s venture into the beer world over the next three years is a measurable objective.
By digitizing and monetizing its ecosystem, PepsiCo will be expecting to unlock value from its existing assets as well as expand its addressable market. At the moment, the company has managed to build close to 200 breweries. It expects products from these facilities to reach six million customers and two billion consumers and resultantly generate ten million transactions on a weekly basis. To achieve this, PepsiCo expects to digitalize and monetize its dictation routes to the market. Thus, within three years, the company plans to upgrade its technology capabilities to unlock several ways that will eventually create value for its ecosystem. Towards this end, PepsiCo’s main areas of concern are three hold. First, it plans to develop and utilize business-to-business fintech and software (Gios, 2021). Second, the company intends to use such solutions as PerfectDraft and Ze Delivery to achieve its e-commerce objectives. Finally, PepsiCo intends to use biotech initiatives that will involve several specialists in carrying out scaled fermentation geared towards creating sustainable food production.
The third measurable objective of PepsiCo is to optimize its business. PepsiCo believes that its iconic and profitable brands have given it a unique global ecosystem. Therefore, to increase profitability and continue to drive growth, the company must adopt a disciplined approach to resource allocation and utilization. Over the next three years, hence, the company wants to shift some resources from its mainstream business in the United States, increase investments in such markets as Mozambique and Nigeria as well as upscale the beer category in China (Doerr & Page, 2018). The success of this particular objective will be measured in terms of the profitability of unit establishments.
Organizational Structure
To accomplish these objectives, PepsiCo has a robust organizational structure that assumes a geographical framework as opposed to a hierarchical one as it was in the past. Several times, the organization has seen its organizational structure transformed to mirror the changing conditions of the global market (Gaspary et al., 2020). PepsiCo’s current corporate structure serves to meet the company’s global expansion and leadership aims. These aims reinforce the vision and mission statements of the organization. Moreover, the organizational structure is deliberately designed to support its global growth objective. Indeed, the organizational structure of a company defines the design and system of its business components as well as the interactions of these components towards the fulfillment of its vision and mission. From this organizational structure, the company’s key objective of expanding across the globe can be attained. It is particularly structured to ensure that the organization adequately responds to the changing conditions of the market.
Over the years, PepsiCo has strategically adopted a transformative organizational structure that has abandoned its traditional hierarchical design in place of a more inclusive one. This transformational journey has primarily been occasioned by mergers and acquisitions that the company has entered over time. Subsequently, the current organizational structures have three main features. These include market divisions, functional corporate groups, and global hierarchy, with the market divisions being the most prominent one. The market division has two variables, which are mainly defined by geography and business. The business variable is further subdivided into Frito-Lay and Quick Foods units. Each of these units has only one division maintained in the entire globe (Nene & Pillay, 2019). The company has many divisions for Europe and America as well as other regions of the world. In this market division segment, PepsiCo boasts of PepsiCo Americas Beverages, Frito-Lay, Quaker Foods, Latin America Foods, PepsiCo, Europe, and PepsiCo Asia, Middle East, and Africa.
As with regards to its functional corporate groups or offices’, PepsiCo’s organizational structure primarily features its fundamental business functions. The company has regional global and corporate offices where all its affairs are coordinated. Indeed, for efficient implementation of the organization’s policies and strategies, it makes sense to have central command centers. These regional command centers are headed by either a Senior Vice President or an Executive Vice President. Under the functional groups, there are seven further divisions. These include global categories and operations, global research and development, human resource, finance, government affairs and legal, talent management, training and development, and communication.
The company’s hierarchy division particularly comes into play when dealing with organizational operations. It is mainly designed to support control, governance, and monitoring initiatives at the corporate and global levels. For a long time, the company has effectively exploited this division to achieve its top-down monitoring, control, and communication initiatives (Chión et al., 2020). The hierarchical organizational structure division has helped the organization stick to its strategies and policies without much deviation.
Despite its vibrancy, PepsiCo’s organizational structure has both its ups and downs. To begin with, the organizational structure makes it easy for the organization to focus on the needs of its regional market. This is based on the fact that the organizational structure has market divisions. In addition, the organizational structure helps to support the firm’s corporate control. However, since this organizational structure is not flexible, PepsiCo suffers the disadvantage of limitations (Ike, 2016). For instance, from the discussions above, PepsiCo only has one Frito-Lay division around the whole globe. This comes with limitations that severely reduce its ability to effectively respond to market variations and changes in this division. To solve this problem, PepsiCo resorted to splitting these single global divisions into market divisions that take care of different regions. Through this initiative, PepsiCo hopes to efficiently respond to its market variations around the globe.
Product position Map
A product positioning map is a diagrammatic technique that PepsiCo uses to perpetually map and visually display the position of its different products against its competition. PepsiCo’s main competitor is Coca-Cola, both of which are involved in the manufacture, distribution, and sale of soft drinks and beverages. However, recently PepsiCo has been poised to enter the alcohol manufacturing industry. To adequately prospect the effectiveness of this venture, it is significant that a beer positioning map is created.
Projected Income and Loss
From the above financial statement, it is the hope of the company to remain profitable even as it scales up its operations. With the addition of more beer brands, it is expected that revenue obtained from sales will increase drastically.
PepsiCo’s Market Value
The price change over this selected period is represented by 5.54% +9.31
References
Cardona, P., & Rey, C. (2022). Management by missions: Connecting people to strategy through purpose. Palgrave Macmillan.
Chión, S. J., Charles, V., & Morales, J. (2020). The impact of organisational culture, organisational structure and technological infrastructure on process improvement through knowledge sharing. Business Process Management Journal, 26(6), 1443-1472. Web.
Doerr, J. E., & Page, L. (2018). Measure what matters: How Google, Bono, and the Gates Foundation rock the world with OKRs. Portfolio/Penguin.
Gaspary, E., Moura, G. L., & Wegner, D. (2020). How does the organisational structure influence a work environment for innovation? International Journal of Entrepreneurship and Innovation Management, 24 (2-3), 132-153.
Gios, L. (2021). Resilience and strategy execution in public organisations. Springer Gabler.
Ike, L. (2016). Management: Principles & Techniques. Xlibris.
Nene, S. W., & Pillay, A. S. (2019). An Investigation of the impact of organisational structure on organisational performance. Financial Risk, 5(1), 10–24. Web.