Ali BaigBUS 550

May 19, 2014Dr. Minder Chen

PepsiAmericas logo image, Aurora Regional Chamber of Commerce, Retrieved May 12, 2014, last updated Feburary 2009, http://www.aurorachamber.com/spirit/images/PepsiAmericas.jpg

Overview• Brief Background.• Historical Background.• Financials.• Technology.• Organization(Business Processes).• Management Decisions.• Business Challenges, Problems, Opportunities.• Future Strategies and Solutions.• Conclusion.• Questions for Class and for me.

Brief Background

• Was the 2nd largest bottler of Pepsi products contracted to make Dr. Pepper/Snapple/smaller regional brands.

• Worldwide operations and HQ was Minneapolis, Minnesota.

• Had about 41% stake in PepsiCo and in 2007 generated 4.5 Billion at its peak.

• CEO and Chairman was Robert C. Pohland.

• President, Chief operating officer Kenneth E Keiser

• Main competitor was Coca Cola Enterprises.

Image of Pepsi Americas room, Siewart Cabinet, Retrieved May 13, 2014, last updated 2009, http://www.siewertcabinet.com/wp-content/uploads/2014/03/DSCN1281.gif

Brief Historical Timeline

• Founded in 2000 with merged with Whitman Corp (a Pepsi Bottler, originally a railroad company, 1962 went into bottling)

• 2000-2009*: Individually based dependent on firms truck drivers. New Products, (net sales $5 billion, 20% of Pepsico Total Sales

• 2001(NextGen), 2003(PMO), 2005(Customer Alignment), 2006(Ecommerce), 2007(CO3 and BRM)

• 2009-2010: PepsiAmericas became a part of PepsiCo, renamed Pepsi Beverages Company.

Financials

$86.54/share, P/E: 19.32, EPS: 4.48

PepsiCo Inc, http://www.marketwatch.com/investing/stock/pep/analystestimates, last updated May 16 2014, Retrieved May 16 2014

Technology

• Originally, truck drivers were the salespeople for the customers but as their demand went up-> new IT methods.

• NextGen handheld device.

Image of Pepsi Truck, Retrieved May 14, 2014, Last updated May 2009, http://fleetnewsdaily.com/wp-content/uploads/2013/06/Screen-shot-2013-06-11-at-4.23.28-PM.png

NextGen • “Handheld project”• Redesigned sales by

replacing conventional route sales process with pre-sell before loading the trucks.

• Divided into 3 areas: Sales Rep, Driver, Merchandizer

• Implemented new processes, redesigned roles, build in customer service with lots of information

UPS next generation model is here, Handheld device image, Last updated March 2012, Retrieved May 16, 20-14 http://upsblog.files.wordpress.com/2012/03/diad_v.jpg?w=216

Organization(Business Processes)

• Too much data coming in and not updated quickly enough.

• Customer Alignment: an initiative that reorganized the firm around centralized functions.

• 4 customer segments– Needs of large customer shipments– Needs of Direct Store Delivery (DSD)– Smaller DSD – Unique and Special needs (vending machines)

Management Decisions

• NextGen and Customer Alignment success made the executives realized a need to drive value from tech initiatives.

• Projects based on Internal Rate of Return (IRR).

• Formed Project Management Organization (PMO), which helped more disciplined way.

Other Management Decisions. • 8 critical future business

capabilities• Competitive Edge initiative: IT

infrastructure to deal with these 8 elements and has 2 components.

• 1) Information Backbone : made data more accessible for decision making and banalsis. – CDR(Central Data Repository)– DW(Data warehouse)

• 2) a mobile platform(CO3)

Mobile Platform: CO3

• Customer Optimization or C03 was a series of projects that focused on business PepsiCo was building

• Use data to improve performance that linked sales and supply chain.

• 3 areas– Demand planning– Power pre-sale– Perfect pallet

Business Challenges, Problems, Opportunities.

• NextGen: technology limitations, battery issues, wiring, data wasn’t always updated, too much demand. PMO.

• Customer Alignment and PMO changed IT structure and provided stronger pathways.

• Competitive Edge

Future Strategies and Solutions.

• Grow into Central and Eastern European Countries. (CEE)

• European expansion would significantly improve revenue.

• Constantly improve IT

Conclusion.

• Was the 2nd largest bottler of Pepsi products and main competitor was Coca Cola Enterprises.

• Originally truck drivers were the salespeople for the customers but as their demand went up, NextGen

• Customer Alignment->PMO->Customer Optimization and Competitive Edge

• CEE

Quiz Time!!!!1) The purpose of NextGen was to a) Engage younger consumers through celebrity ads to bring in more customersb) Implement new processes, redesign roles, build in customer service with lots of informationc) Make the delivery task easier for the truck drivers as cheap as possible. d) Limit the information coming in and the roles to improve efficiency

2) All are customer segments provided by Customer Alignment except a) Needs of large customer shipmentsb) Needs of Direct Store Delivery (DSD)c) Unique and Special needs d) Needs of Indirect Store Delivery (LSD)

3) CO3 stands fora) Customer Optimizationb) Carbonation of the latest Pepsi product.c) Carbon trioxided) None of the above

Works Cited• (2014). Retrieved May 16, 2014, from Pepsico: http://www.pepsico.com/• Aguirre-Mar, M. (2013). Global Structural Design and Results: PepsiCo Case. JOURNAL OF STRATEGIC

LEADERSHIP, 6-14.• Baig, J. (2014, May 17). Pepsico Manager of Sales. (A. Baig, Interviewer)• Beath, C. and Ross, J. PepsiAmericas: Building An Information Savvy Company, 378 (MIT Feb 2010).• Image of Pepsi Americas room, Siewart Cabinet, Retrieved May 13, 2014, last updated 2009,

http://www.siewertcabinet.com/wp-content/uploads/2014/03/DSCN1281.gif • Image of Pepsi Truck, Retrieved May 14, 2014, Last updated May 2009,

http://fleetnewsdaily.com/wp-content/uploads/2013/06/Screen-shot-2013-06-11-at-4.23.28-PM.png• NNDB. (2012). PepsiAmericas. Retrieved May 15, 2014, from NNDB:

http://www.nndb.com/company/395/000124023/• PepsiCo Inc, http://www.marketwatch.com/investing/stock/pep/analystestimates, last updated May

16 2014, Retrieved May 16 2014• Pepsico. (2014). Pepsico Corp Fact Sheet. 1-2.• Pepsico/PepsiAmericas, 5632 (Luxembourg October 26, 2009).• UPS next generation model is here, Handheld device image, Last updated March 2012, Retrieved May

16, 20-14 http://upsblog.files.wordpress.com/2012/03/diad_v.jpg?w=216

Questions