Junk food problem. Thus, a possible improvement is to divide such single global divisions into regional market divisions, so that PepsiCo could enhance its responses to market variations around the world. Article printed from InvestorPlace Media, https://investorplace.com/2011/07/pepsico-shares-3-pros-3-cons/. PepsiCoâs Corporate Culture: Advantages and Disadvantages. Disadvantages Of Pepsi. Yet the company lost its focus, which has resulted in some problems with its growth, especially in the U.S. However, after a number of key mergers and acquisitions, along with global expansion, the company has changed its organizational structure accordingly. Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Calcium Depletion Calcium is an essential mineral for strong bones and teeth. Since reaching $71.78 in late May, shares of PepsiCo (NYSE:PEP) have seen a steady decline. And in some extreme cases, can cause death. In terms of business, PepsiCoâs maintains one global division for Frito-Lay and another global division for Quaker Foods. Competitive pressures. Frito Lay and Pepsico had merged in 1965. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. It can build multiple levels of consumer loyalty. Advantages Of Diversification. 1. Although DSSs stop a decision maker from promoting a bias, they simply aid in decision making by offering useful insights into easily consumable bites. All rights reserved. Read More. These aims highlight PepsiCoâs mission and vision statements. The emphasis on targeted action and internal leadership development give the employees a contribution to the company. Advantages and Disadvantages of PESTLE Analysis Vinish Parikh. No doubt, much of what Pepsi makes would not be recommended by your doctor. The company has global or corporate offices for these functions. In light of all these factors, the cons outweigh the pros for PepsiCo. Knowledge sharing in inter-unit cooperative episodes: The impact of organizational structure dimensions.Â. Through this quality of corporate culture, PepsiCo supports synergy in its human resources rather than relying on separate individual efforts. This characteristic reduces PepsiCos ability to respond to market variations and câ¦ The brands include Quaker Oats, Gatorade, Frito-Lay and Doritos. PepsiCo also is using acquisitions to expand its footprint in emerging markets. How to get what you want when you do not know what you want: A model of incentives, organizational structure, and learning.Â. The following are the main characteristics of PepsiCoâs organizational structure: Market Divisions. PepsiCo originally had a hierarchical organizational structure in its early years. It employs more than 285000 workers all over the world. Marengo, L., & Pasquali, C. (2012). PepsiCo (PEP) shares, among the bluest of the blue chips, have continued their winning streak thus far in 2016, outpacing the broad-based S& P 500 Index by about two percentage points year to date. They have "Training Academies" to expedite the onboarding process for virtually every level of employee. However, PepsiCo experiences the disadvantage of the limits of its organizational structure in terms of flexibility. Pepsi has a broad range of products for beverages and snack foods, which are sold in more than 200 countries. But might there be an opportunity for investors to get a discount on a top blue-chip stock? The organizational structure also has the advantage of supporting PepsiCos global corporate control. Development and return on execution of product innovation capabilities: The role of organizational structure.Â, Tang, F., Mu, J., & MacLachlan, D. L. (2010). PepsiCo chooses the relevant distribution channel based on customer needs, product characteristics, and local trade â¦ PepsiCo the brand everyone knows and loves is most famous for their collection of tasty treats. PepsiCoâs objective in having functional groups is to ensure corporate control and rapid implementation of policies and strategies. He does not own a position in any of the stocks named here. The primary advantage of PepsiCos organizational structure is the ability to focus on regional market needs. To this end, the company acquired a majority interest in Wimm-Bill-Dann Dairy and Juice, one of the top food and beverage companies in Russia, for $3.8 billion. And here are their numerous disadvantages. In fact, Pepsi has a sophisticated distribution system, which is called direct store delivery. This is the key bright spot for Pepsi. PESTLE analysis is the term used in the context of marketing. Over the years, it has expanded its operation with acquisition of other brands such as Tropicana, Gatorade and Quaker Oats. PepsiCoâs organizational structure also features a hierarchy that spans the global organization. The following are the main functional corporate groups/offices at PepsiCo: Global Hierarchy. Even with a general slowdown and higher inflation, most developing and emerging markets are posting healthy GDP growth. Intensive distribution is a kind of marketing strategy that focuses on maximizing product availability. The idea is to present all tangible information in the forms of graphs, pictures or text, so that you donât overlook facts. The companyâs current corporateÂ structure reflects the business aims of global expansion and leadership. Macro issues. PepsiCoâs organizational structure has been reformed several times to address changing global market conditions. Pepsi has an enviable business, with tremendous brands. Pepsi has incredibly effective marketing, and it has been at the forefront of social media, with campaigns on Twitter and Facebook. I worked at PepsiCo for less than a year. Dec. 4, 2020, NIO Stock: 3 Big Reasons Nio Shares Are Plunging Today, 3 Stocks You Can Buy Now and Be Thankful You Did, The Top 5 Electric Vehicle Stocks to Buy for 2021. It allows a business to control more than one stage of the supply chain. Performing with a purpose means blazing new trails, never settling for second best, succeeding and celebrating together, and doing something bigger (PepsiCo, 2012). The best product does nit win always in a market. Get informed. The paper "Advantages and Disadvantages of the Coca-Cola Company Merging with Other Firms within the Industry" states that in terms of branding and sales both Pepsi StudentShare Our website is a unique platform where students can share their papers in a matter of giving an example of the work to be done. Menguc, B., & Auh, S. (2010). PepsiCo produces and trades a wide variation of products ranging from soft drinks to juices to their health conscious snacks. Everyone was really friendly and helpful and they also provided me with a great business experience as well as allowing me to work on my own projects which I felt passionate about. There will always be unpleasant surprises within a single investment. And it continually uses diversification into snacks over soft drinks. PepsiCoâs organizational structureâs characteristics are based on the companyâs approach to maximize its control of the business while continuing to grow internationally. Coca cola being its main rival in the field of beverage production. Know the Advantages and Disadvantages of Intensive Distribution? For example, the company has a single global division for Frito-Lay.