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Case Analysis PepsiCo Answers to the questions

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Case Analysis PepsiCo Answers to the questions
Paulo Nazario, Onur Saka and Juliette Clark

International Business Policies and Strategies, Winter Quarter 2011
11/29/11

CASE 11: PepsiCo’s Diversification Strategy in 2008

Page 1

1. BACKGROUND INFORMATION
Time Country(s) Involved Key Individuals & frame MileStones
Titles
1965- Headquarters in
Indra Krishnamurthy
2008
Purchase, New York, Nooyi, Chairman of
USA. Operations the Board and CEO
(2006-).
global in scope.
Steven Reinemund
(CEO 2001-2006).
Roger Enrico (CEO
1996-2001).
Donald Kendall and
Herman Lay,
Founders.

1965

Merger with Frito-Lay CEO of Pepsi Cola, and engineer of
PEPSICO
Merger, Donald
Kendal

1970s
1980s

Diversification outside snacks and beverages Acquisition of Pizza
Hut, Taco Bell, KFC

1990s

Acquisition of 7UP,
Mug Root Beer,
SunChips,
Introduction of
Aquafina - 1993

Wayne Colloway,
CEO (1986-1996)

Company Type & Size
PepsiCo is a publicly traded company, listed on the NYSE,
NASDAQ, and as a component of the
S&P 500. In 2010 it had 294,000 employees worldwide. As of
November 2011, it had a market cap of $101.02 billion.

"Potato chips make you thirsty; Pepsi

satisfies thirst." Donald Kendall on merger. ‘Balanced three leg stool’ describes
Wayne Colloway, however, strategic fit problems occurs

Bottled water business starts.

1997

Portfolio
Reconstruction

Roger Enrico, CEO
(1996-2001)

Due to several strategic fit problems, restaurant businesses have been spun off to form Tricon, later Yum!
Brands.

2001

Acquisition of
Quaker Oat
Company, Adding
Gatorade to arsenal

Steven Reinemund
(CEO 2001-2006)

FTC’s bans to jointly distribute
Gatorade with Pepsi for ten years.

2008

Re-Organization of
Structure

Indra Krishnamurthy
Nooyi, Chairman of the Board and CEO
(2006-).

Three division model. Strategic realignment. Page 2

2. BRIEF SUMMARY OF CASE SITUATION
Business or Industry Description
Particular Company Situation
The case concerns the international
In 2008, PepsiCo was the largest snack and food and beverage industry. The
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