PepsiCo, Inc., 2010. For analysis, the statement can be broken down into three parts.
To further comply with the environmental regulations of the country, PepsiCo plans to deploy its green vending machines to reduce energy usage in its manufacturing plants, and therefore reduce carbon emission by a about 15% (Martin 2009). It will have to adjust its marketing strategies, workforce, technology and financial management to reflect the needs of the market.
Should the company decide to establish its operations in the country to allow it conduct direct business, then it has to engage in a joint venture with domestic company or a UAE citizen, who must retain a minimum of 51% stake in the venture, as is required by law (New Zealand Trade and Enterprise 2009, 10). International business strategy refers to the business plans adopted by corporations and businesses in the global business environment to provide services and products consumers across the globe. Unite Arab Emirates country brief. Elo, M., 2009. International expansion through joint venture: Situations and strategies from a network perspective.
The company has to consider its core capabilities, the opportunities available, its weaknesses, and the challenges it is likely to face while expanding its operation into a new market. There are restrictions on new foreign companies which plan to set sup offices, as well as, conduct direct sales in the UAE. Web.
PepsiCo could also face labor challenges in the United Arab Emirates. Delivering products of unique and premium quality, which not only benefits the company but also benefits the business enterprise the customers who buy PepsiCo products in bulks.
Today, its products sell in more than 200 countries, and operate in more than 40 countries across the globe.
It also plans to drop the production of its discretionary products like Aquafina in favor of water conservation (Gunther 2007). 1. PepsiCo’s executive leadership embarked on a journey to develop a vision statement which they think best suits their organization. The organization brings smiles for its acquaintances and society by creating job opportunities. (2020, February 27). Unfortunately, your browser is too old to work on this site. There are several approaches that a company can apply to create cost advantages, for example: the product’s design or the use of cheaper raw materials. Circular Future for Packaging – PepsiCo will avoid the use of 67B single-use plastic bottles with the expansion of SodaStream business by 2025. Besides, nobody, including non-Muslims is allowed to eat or drink in public during that period (New Zealand Trade and Enterprise 2009, 11-12).
PepsiCo tries to bring smiles for its customers by being the best business partner. For each one of its product, it has one message worldwide. Environmental Leader.
September 15, 2011 Bloomberg Businessweek.
After going through the cost leadership chapter today, the part that I enjoyed the most that I would like to relate to Pepsi would be its actual cost leadership strategy. A key to long term success. As a result, this will reduce the company’s economies of scale as the risks become a reality. It also plans to purchase its raw materials in bulk to benefit from quantity discounts. PepsiCo is a global food and beverage leader with net revenues of more than $65 billion. It plans to involve local NGOs to encourage community involvement in the program. PepsiCo’s values are the reflection of their stand on social and environmental issues, and what the company wants to be known for. At that time, Trian Fund owned about $1.3 Billion of PepsiCo shares, which made them one of the largest PepsiCo’s shareholders. How Does Credit Karma Work and Make Money? The government may only allow PepsiCo Inc to operate in the country under strict compliance to the environment regulations due to its high carbon emission.
Pepsico believes that its past success is a mirror of its ambition, which has lead to the growth of the company. Operations strategy will enable the company add value to its products. PepsiCo also tries to find an innovative method to reduce the impact that PepsiCo brought, Competition Strategy
Such partnerships will give PepsiCo certain position and status in the UAE’s business environment, as well as, its environs. It will be able to take care of the government’s pollution concerns, and will also adopt new technologies, and invent new products to achieve competitive advantage over other beverage companies in the market.
Kedia, B., Kroll, M., Pringle, C., & Wright, P., 1990.
Tell us what you think? The Huffington Post. This also happens during the period of Ramadan when business schedules are disrupted or shortened. A great deal of thought has been given to your preferences and buying habits in an effort to keep you as a customer. Annual Review. They claim that a low cost strategy is rarely able to provide a sustainable competitive advantage. Instead, they claim a best cost strategy is preferred. 11.0 REFERENCES
Consumers purchase/ consume both (salty) snacks and (sweet) drinks together. 8.0 CRITICAL PROBLEM & DECISION ANALYSIS
Michael Gillespie Byrnes, N., 2010. PepsiCo Inc. is the second-largest organisation that produces food and beverage in the world.
Save my name, email, and website in this browser for the next time I comment. Beverage brands are Pepsi, Mirinda, Mountain Dew, Gatorade, Tropicana etc.
PepsiCo will be forced to meet the guidelines of the ministry of health which require beverage and food companies not to market or distribute foods and beverages which have high calories such as carbonated soft drinks to children.
In the UAE, any company that fails to pay its creditors within 30 days must file for bankruptcy; otherwise it faces bankruptcy charges, which is a criminal offense in the country.
How green Is my orange?. The venture will also include recycling. Besides, it will only major on producing soft drinks to meet the cultural practices of the majority population. Gunther, M., 2007.
After the merger, the company’s headquarters was transferred from Manhattan, Delaware to Purchase, New York five years later. Water usage in the UAE is a big problem and as such the company needs to look for alternatives to avoid running into problem with authorities. Share your thoughts and experiences in the comments section below.
Achieving customer loyalty especially in a market that has been majorly dominated by Coca-Cola, its main rival, could be difficult considering that advertisements targeting UAE consumers have to be modest. 2.0 STRATEGIC PLAN & FOCUS The strategy that PepsiCo has used over the years to stay competitive in the food and beverage industry is constructed from of two generic strategies cost leadership and broad differentiation (Ferguson, 2017).
Most of PepsiCo’s raw materials are agricultural products.
Gary Beene’s Pepsi., 2011. Web.
Arab Gulf business prospects and challenges. Besides, during summer, which occurs in July and August, many senior decision-makers in the country go on vacation due to extreme heat, as well as humidity, and therefore it is not possible to hold high-level business meetings. Arnold, T., 2009. Zogby, J., 2011. "PepsiCo Inc. International Business Strategy." According to this strategy, the company will have to consider the core capabilities of the joint venture, together redesign the mission and value of the partner company, and to consider the customers value, which in this case is their Islamic culture.
Competition is also another major challenge for PepsiCo while entering the UAE market. Its last market division, Asia, the Middle East and Africa has to be exploited adequately to realize the full benefits of its global strategies.
Web. The strategy that PepsiCo has used over the years to stay competitive in the food and beverage industry is constructed from of two generic strategies cost leadership and broad differentiation (Ferguson, 2017). It categorizes its global operations into four main divisions which include PepsiCo Americas Beverages, PepsiCo Americas Foods, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa, with 36% of its products being beverages. PepsiCo has a broad range of product lines under two categories, drinks, and beverages. Through such steps, the organization tries to give back to society by making the lives of the people living in it better. PepsiCo is an American multination industry that selling food and beverage. Using this strategy, it is able to bring its unique technologies and new products into the market cheaply and faster, and more reliably and efficiently as opposed to what it could achieve alone as a new player in the market.
PepsiCo plans on developing its core capabilities that will better facilitate, The organization plans on becoming better by integrating their vision into their, The Company brings smiles to the world by playing its part in, PepsiCo expects its employees to have a vision of sustained growth. PepsiCo Inc has several hundreds of brands in the market (PepsiCo Inc. 2010). Beamish, P. W., & Lupton, N. C., 2009. Moreover, to sell product of top quality, the company is very in tune with the needs and demands of its consumers and customers.
Web. The company’s energy use is also likely to meet tough regulatory challenges. New York: Financial Times Prentice- Hall. The other regulatory challenge that it is likely to face is meeting the set safety standards put in place by the country’s ministry of health and the Bureau of UAE Standards to guide soft drink ingredients. February 27, 2020. https://ivypanda.com/essays/pepsico-inc-international-business-strategy-research-paper/. Economies of scale is the most effective way to reduce costs, especially for the firms which have a diversified portfolio of products like Coca Cola. Today, it operates in North America, South America, Europe, Asia and Africa. To advance this vision, the company plans on becoming, The company believes that winning with purpose translates to giving the best performance to execute your goal and purpose. For the company to offer lowest prices for its products while still achieving high revenues on its investments, it will have to streamline the existing technology at the local company it enters joint venture agreement with in order establish manufacturing plants which enable it produce high volume output.
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