Problem Solving Approach of PepsiCo Incorporation

This document discusses the problem-solving approach of PepsiCo Incorporation. It covers the identification of problems faced by the company, observations over problem-solving approach by the company, and alternative steps to solve the problems. The document suggests that PepsiCo Incorporation needs to improve the quality of their Pepsi product, enhance the quality of packaging or bottling of drinks, use natural preservatives and natural sugar to prevent health diseases to consumers, and enhance their critical management skills and leadership styles to motivate and to support employees of the company.

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Problem solving
Problem Solving
Problem solving approach of PepsiCo Incorporation
MAY 20, 2019
Timothy Rotich
Northcentral University

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Problem solving
Contents
Introduction......................................................................................................................................1
Problem Solving Approach of PepsiCo Incorporation....................................................................3
Identification of problem faced by the company.........................................................................3
Observations over problem-solving approach by the company..................................................4
Alternative steps to solve the problems.......................................................................................5
Conclusion.......................................................................................................................................6
References.......................................................................................................................................7

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Introduction
PepsiCo Incorporation is the food and beverage company of America. It is one of the largest
company in the world. It provides the availability of products for approximately 200 countries in
the world. The headquarters of the company are in the Purchase, New York. The name of the
company was established in 1965 during Pepsi-Cola Company merging with the Frito-Lay
Incorporation. A pharmacist named Caleb D. Bradham created Pepsi-Cola first time in New
Bern, North Carolina. He created a carbonated beverage with cola-flavored and named this
beverage as Pepsi-Cola in 1898 and situated a Pepsi-Cola Company in 1902. Then in 1931,
Charles G. Guth formulated a new Pepsi-Cola company by formulating an enhanced drink and
provided new bottling operations. In 1950 Alfred N. Steele gets posted as chief executive officer.
Then he started focusing on the increment in huge advertising campaigns and promotion for sales
for profits in the 21st century. PepsiCo became the largest Food and Beverage Company in
Russia during 2011 (Tikkanen, 2019).

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Problem Solving Approach of PepsiCo Incorporation
Identification of problem faced by the company
PepsiCo Incorporation faces many problems with the sailing of Pepsi-Cola in the market. Due to
the bottling of the drink, the problem in maintaining the profits, lack of required time by
employees causes problems in the company. The disease of health and stomach, obesity, rumors
about the ingredients used, and competitive environment also caused problems to the company.
Due to improper disposing of bottling of the drink, waste is taking place in the environment. This
waste gets accumulated in the landfills, water and water bodies. Due to the packaging material
properties, packaging would not be degraded in the landfill, water and water bodies and cause
harmful effect to the environment and living entities. Due to increment in crude oil prices, the
cost of production would be increased. In KSA prices of Pepsi are cheaper in comparison of
other countries in the world. Due to these reasons, the company of Pepsi getting faced with the
problem of making profits and maintaining them. Similarly, employees in KSA gives less
working time in the production of Pepsi and more time towards the Mecca pray. Due to this
break time, cost of operation would be increased (Fulcher, Dean, & Trufil, 2016). Due to overuse
of Pepsi may cause health and stomach diseases to a person. The components of Pepsi like
caffeine, high fructose sugar, aspartame, and phosphoric acid can be harmful on the overuse of
Pepsi. Due to components of Pepsi, destruction to the body like weakness of bone, fracture in the
bone, and interference in the bone formation, osteoporosis and obesity to a person. The overuse
of Pepsi in Saudi Arabia and in the Middle East causes obesity to the majority of the peoples
(Alkhedaide, et al., 2016). Due to the rumors about the ingredients of Pepsi lower down the
consumption of Pepsi and causes decrement in the economic profit to the company. Rumors like
due to the consumption of Pepsi due to aspartame can cause cancer to a person deplete the

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reputation of the company in the market and causes loss to the company (Society, 2019). Due to
the competitive environment between the companies may cause problem to PepsiCo Company.
Because when other companies provides effective packaging and low cost for the drinks, then
consumer gets attracted to that company and causes loss to the other company. Similarly, in
between cola-cola and PepsiCo company competition get caused. When cola-coal company
prices and packaging get effectiveness than PepsiCo Company than the loss to PepsiCo
Company to get caused and they get problematic issues in the company (Li & Chen, 2018).
Observations over problem-solving approach by the company
It is observed that PepsiCo Incorporation established their goal to deal with the bottling issue of
Pepsi. For this, they have established their goal to use biodegradable material for the making of
the packaging material of Pepsi. PepsiCo incorporation set their aim for the use of recyclable,
reusable, and compostable by 2025. They aim to produce bottles by the help of plastic named as
polyethylene terephthalate. Because this plastic emits less carbon dioxide in comparison with
aluminum or glass bottles (Lucas, 2019). They would provide advertisement and provide
research proof by the scientist for clearing rumors about ingredients of Pepsi. They provide
advertisement and proofs that the ingredients of Pepsi would not cause cancer to any person.
They would provide consumption criteria for Pepsi and their effects on the health. They would
provide lab testing before providing them into the market (Du, Tugendhaft, Erzse, & Hofman,
2018). They would provide cost-effectiveness in the marketing of Pepsi for maintenance profits
to the company. They would provide inventory management for minimizing the cost of the
products. They would provide investment for effective manufacturing and supply chains of Pepsi
(Longoria, 2019). They manage market-related research about current trends of customers so that
they can maintain the quality of their products of PepsiCo by enhancing the quality of the

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product. For enhancement in quality of the product, they provided low-calorie Pepsi products.
They provide support to the individuals of the company for the maintenance of PepsiCo
Incorporation (Gregory, 2017). PepsiCo would have to use 10% of the fructose or any other
added sugar in Pepsi as per the recommendation of World Health Organization (WHO) to
prevent diseases like obesity in the peoples (Rippe, et al., 2017).
Alternative steps to solve the problems
PepsiCo Incorporation has to evaluate their plans of the soft drinks having carbonates and they
have to provide enhanced beverages having healthy components. They have used natural sugars
like fruits, honey if necessary to add in the soft drinks. They have to enhance the quality of
packaging or bottling of drinks by the use of polyethylene, reducible and recyclable material
(Fulcher, Dean, & Trufil, 2016). They have to add natural preservatives for long duration
maintenance of Pepsi. They have to nitrogen preservative in Pepsi to enhance the quality of
Pepsi, to enhance the flavor and texture of Pepsi. By the help of nitrogen preservative, they
would be able to formulate new soft drinks beverage with enhanced quality (Watson, 2019).
They have to enhance their management skills in the company to enhance the quality and
quantity of product as per consumer requirement. They have to use attractive advertisement
which would show the benefits like provide relax, provide instant energy and feel of rejoices to
attract consumers (Bogost, 2017). They have to provide motivation and support to manage time
inside the company and effectiveness in the quality of the product by critical management skills
by leaders of PepsiCo Incorporation (Incorporation, 2018).

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Conclusion
Consumers want the effective and valuable quality of soft drinks. They want to buy soft drinks at
an effective cost and at the required timing. They want their soft drinks at the place where they
needed soft drinks. They want soft drinks which would be healthy and energetic for them.
Therefore, Pepsi needs to improve the quality of their Pepsi product. PepsiCo Incorporation has
to manage increment in their position every year. They have to improve the packaging quality of
the product. They have to enhance their critical management skills and leadership styles to
motivate and to support employees of the company. They have to use natural preservatives and
natural sugar to prevent health diseases to consumers. By enhancing time management, quality
of the product and by providing satisfaction level to the consumer, PepsiCo Incorporation would
be able to solve problems in the company.

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References
Alkhedaide, A., Soliman, M. M., Salah-Eldin, A.-E., Ismail, T. A., Alshehiri, Z. S., & Attia, H.
F. (2016, April 27). Chronic effects of soft drink consumption on the health state of
Wistar rats: A biochemical, genetic and histopathological study. PMC, 13(6), 5109-5117.
doi:10.3892/mmr.2016.5199
Bogost, I. (2017, April 05). Pepsi's New Ad Is a Total Success. Retrieved from The Atlantic
Website: https://www.theatlantic.com/technology/archive/2017/04/pepsi-ad-success/
522021/
Du, M., Tugendhaft, A., Erzse, A., & Hofman, K. J. (2018, June). Sugar-Sweetened Beverage
Taxes: Industry Response and Tactics. PMC, 91(2), 185-190. Retrieved from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6020730/
Fulcher, E., Dean, A., & Trufil, G. (2016). 6 - Neurosense and Packaging: Understanding
Consumer Evaluations Using Implicit Technology. Integrating the Packaging and
Product Experience in Food and Beverages, 121-138. doi:10.1016/B978-0-08-100356-
5.00006-1
Gregory, L. (2017, February 6). PepsiCo’s Operations Management, 10 Decisions, Productivity.
Retrieved from Panmore Institute Website: http://panmore.com/pepsico-operations-
management-10-decisions-areas-productivity
Incorporation, P. (2018, February 13). PepsiCo Incorporation, 2017 Annual Report. Retrieved
from PepsiCo Incorporation Website: https://www.pepsico.com/docs/album/annual-
reports/pepsico-inc-2017-annual-report.pdf

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Li, W., & Chen, J. (2018, August). Pricing and quality competition in a brand-differentiated
supply chain. International Journal of Production Economics, 202, 97-108.
doi:10.1016/j.ijpe.2018.04.026
Longoria, S. (2019, February 15). PepsiCo aims to cut costs, reinvest savings to boost growth.
Retrieved from S&P Global Website:
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/
50003823
Lucas, A. (2019, January 25). Coca-Cola and Pepsi agree plastic waste is a problem, but the
solution is more complicated. Retrieved from CNBC Website:
https://www.cnbc.com/2019/01/24/coca-cola-and-pepsi-agree-on-the-plastic-waste-
problem-but-the-solution-is-more-complicated.html
Rippe, J. M., Sievenpiper, J. L., Le, K.-A., White, J. S., Clemens, R., & Angelopoulos, T. J.
(2017, Janauary). What is the appropriate upper limit for added sugars consumption?
PMC, 75(1), 18-36. doi:10.1093/nutrit/nuw046
Society, A. C. (2019, February 11). Does Aspartame Cause Cancer? Retrieved from American
Cancer Society Website: https://www.cancer.org/cancer/cancer-causes/aspartame.html
Tikkanen, A. (2019). PepsiCo, Inc. AMERICAN COMPANY. Retrieved from Encyclopaedia
Britannica Website: https://www.britannica.com/topic/PepsiCo-Inc
Watson, E. (2019, Janauary 25). Euromonitor analyst: Nitro Pepsi taps into demand for more
'adult soft drinks'. Retrieved from Food navigator-usa.com Website:
https://www.foodnavigator-usa.com/Article/2019/01/25/Euromonitor-analyst-Nitro-

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