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SUMMARY COMMENTS This case presents the PepsiCo Companys situation between 1950s to early 1990s PepsiCo is a large organization with a decentralized management approach In 1933 12 ounces of Pepsi was equal to a nickel where for one nickel you could buy 6 ounces of Coca Cola By the end of 1940s when Alfred Steele was the CEO the company moved from low price strategy and launched an extensive marketing campaign to boost the companys image The strategy was successful Sales increased to 142 million in 1960 from a postwar low of 13 million in 1950 In 1963 Donald MKendall CEO and Andrall EPearson COO changed the companys cultural emphasis from passivity to aggressivity During that time the corporate office set strategy and maintained financial control but left operating decisions to its energetic and industrious division managers who were eager to take charge Kendall merged Pepsi-Cola with Frito Lay in 1965 and company name became PepsiCo Kendalls successor Wayne Calloway 1986 put the emphasis more on his employees When asked by a Fortune magazine reporter to what he attributed PepsiCos outstanding performance during his tenure he replied the three Ps people people people He also believed that different experiences made great managers He also challenged his managers to be innovative and was known for saying If it aint broke fix it anyway All those statements made by Colloway shows his strategy in management He believes given the right environment and empowered in a correct way the success will come and the success of the manager would be for sure the success of the company PepsiCos Businesses PepsiCo had three segments as shown in Table 1 Table 1 Soft DrinksSnack FoodsRestaurants 1991 SalesTotal Sales352936 1991 ProfitsTotal Profits393526 In 1986 PepsiCo purchased KFC Combined with Pizza Hut and Taco Bell the purchase made PepsiCo the international leader in number of restaurant units In late 1980s Coca Cola campaign against PepsiCo stating that restaurants that bought
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