Strategic Human Resource Report: Analysis of PepsiCo Company

This report provides a strategic human resource analysis of the PepsiCo Company. It begins with an introduction outlining the company's objectives of improving product quality and meeting consumer needs through strong operational and HR processes. The report identifies key HRM issues, including health and safety concerns and low production levels, and discusses the company's background, vision, and mission statements. It then explores PepsiCo's corporate and business strategies, including the Fristo-Lay North America and PepsiCo beverage divisions. An overview of the internal and external environments, including marketing, management, operations, economic, social, legal, and technological forces, is provided. The report also uses deductive and inductive approaches, including a SWOT analysis, and concludes with recommendations for addressing the identified HRM challenges and achieving the company's goals. The report highlights the company's strengths, weaknesses, opportunities, and threats.

Running head: PEPSICO COMPANY 1
PepsiCo Company Strategic Human Resource paper
Student’s Name
Institution Affiliation
October 28, 2018

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Introduction
The main objective of the PepsiCo Company is being in a position of improving the quality and
the type of products they provide to their consumers through creation of strong and healthy
conditions which will meet every customer’s needs. This is the utmost goal and objective of the
company, most importantly by providing excellent products they will be in a position of
maintaining the company’s healthy standard thus drawing more people in purchasing their
products. For this reason it is essential for looking deep through the company operational and HR
processes which will help the organization formulate strategies which will help it move to a
higher level (Keller, 2013). This research paper, will state the specific issue being experienced in
by the PepsiCo Company, thus will outline favorable strategies that will help the HR curb the
problem. Additionally, it will also state the organization foreseen vision and mission that should
be met in the near future. Lastly the paper will provide possible solution and recommendation on
the issues affecting the PepsiCo Company.
HRM Issues
Taking into account the organization’s background and its strategic human resource approach,
there is vast number of issues which affects the company’s HRM motivational aspect of
developing which include:
 Health and safety – In any case where there is arousal of health and safety issues the HR
is expected to validate that the business has done as expected. Failure too that will result
to the company facing huge risks of legal fines and ramifications.
 Low production levels – with the low production levels at PepsiCo the HR team is
accountable for making sure that there are normal business operations at the company.

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Therefore it is upon the HR team to evaluate the source of the problem in order to
improve efficiency.
Organization’s Background
Late in the 18th century, PepsiCo was developed with an initial brand name Pepsi-Cola by Calbe
Bradham who lived in New Bern, Northern Carolina. Due time the company gained recognition
and in 1902 Caleb decided that he should shape the company and acquire validated patent recipe.
Unfortunately, the company was insolvent in 1931and Syrup manufacturing company owner
gained interest and purchased the Pepsi-Cola company’s trademark and recipe to Loft Inc. Thus
it facilitated the absorption of the Pepsi-Cola company by Loft Inc. since it was thus rebranded
from Pepsi-Cola Company. Presently the company’s brand name is known to be PepsiCo and
moreover it has acquired huge shares in the marketplace through the merging and acquisition of
other firms like Quaker oat, Frito-Lay company etc. As a result, it has enabled the company
formulating five specific divisions which are in Africa, Middle East, PepsiCo Asia, PepsiCo
Europe, and PepsiCo America. The figure below shows how the company is divided.
According to the figure above it is evidenced that each respective figure portrays the company
R&D team which are aligned to the meeting every consumers expectations (Kumar, 2013). Thus
it elaborates the extensive product line underlying the company’s broad acquisition process.

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Vision Statement
PepsiCo vision is to uphold and develop all sector of the world where its branches are by
boosting the environmental, economical, and social conditions which will give way to a brighter
future to the company. This vision statement is in-directed by PepsiCo Company (Matthews,
2018). This will enable the company also be in a position of enhancing in terms of food and
beverages and the market, its economy and its social environment.
Mission Statement
The company’s mission statement is, “Be the leader in terms of products consumed targeting its
food and beverage collection. They aim at providing financial rewards to entrepreneurs due to
the vast opportunities in the society operates in. Additionally, everything we execute is fair and
upholds high integrity”.
The company’s statement is deprived of essential factors which should be incorporated in its
stated mission (Dermol, 2012). According to the company’s current statement it only accounts of
the concern of public visage, profitability, growth, the concern of survival, and its product. The
present mission’s statement does not comprise of the company’s concern of its employees, self-
concept, technological levels, and philosophy, market, and consumer factors.

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Corporate strategy relating to the HR
According to research analysis it is known the PepsiCo Company is the global leader in the
provision of snacks and beverages to its consumers. More specifically, the PepsiCo’s company
corporate strategy had classified the company products to sweet and salty snacks, bottled water,
orange juice, soft drink and ready to drink tea and coffee (Kayabas, Boyraz & Derdiyok, 2018).
Based on the selection of the appropriate human resource issues for the company PepsiCo
managers employed the health and safety measures together with institution of low production
levels to cater for the HR problems that would affect boosting the company’s efficiency (Simon,
2011).
Business strategy relating to the HR
The PepsiCo business strategy is subdivided into 2 fundamental business divisions, which all
abide by the company’s overall HR strategic approaches they include:
1. The Fristo-Lay North America – the segment’s business strategy
One factor which should be put into consideration is how the PepsiCo Company provides healthy
products and maintains safety conditions of its consumers in the marketplace. For instance, the
company manufactures healthy snacks in bags which are free of calories thus minimizing the
health risks of consumers. Such product includes both the sweet and salty snacks (Sharma &
Mishra, 2014). Abiding by the current health conditions which should be maintained the
company has provided healthy ingredients which are good for your snacks. The company has
upheld the positive progress of the salty brands which maintains the company health reputation
thus attaining a good position in the market place. Initially the company was providing fruits and
vegetables which were unhealthy.

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2. PepsiCo beverage in North America
On the other hand, the PepsiCo soft drinks employ a slogan of the ‘Power of one’ which is an
approach considered by all supermarkets in aligning Pepsi and Frit-Lay product first on the
counter. Aside from that the company has struggled in boosting the domestic supply chain, the
flow of data which emanates from several retailers in Innovation summits globally (Shimp &
Andrews, 2013). Consequently, the company has augmented the carbonated drinks nutritional
components with a challenge of coming up with brand new sweeteners which would contain low
caloric levels. This will enable PepsiCo provide healthy beverages such as enriched water, flavor
etc.
Organization’s Affair
Internal environment
Marketing – PepsiCo is globally recognized since it comprises of different products which are
Pepsi cola, Lay’s, Tropicana, and Oats. The mentioned products are frequently purchased by the
company’s customers who buy according to the healthy conditions based on the ingredients used
in making the product (Peter & Donnelly, 2013). Moreover, the improved products comprising
fruits, nuts, and whole grains are all categorized in the snack segment. These make its 40 healthy
brands be introduced in all industrialized countries.
Management – The main objective of PepsiCo is employing the use of rigid corporate leadership
which will aid in attaining high healthier products in terms of value and the production rates
(Bateman & Snell, 2013). The company provides a good example for other companies in the
marketplace with experienced professionals such as John Compton (26 years experience), and
Eric Floss (28 years experience).

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Operation and Technology – The main aim of the company is conducting deep research into
acquiring cheap, healthier products and also minimize waste levels which will enable the
company maintain its effectiveness (Blanding, 2014). The company aims also at maintaining its
healthy standards and introducing additional collection of snacks which will meet different
customer’s expectations. The product packaging cost of the company is targeted to reduce in the
coming years by 350 pounds. According to the company’s operational perspective there are plans
of consolidating the company’s bottling plants, and minimizing the water consumption rates.
External environments
Economic Forces – Majority of the food producers have experienced inflation problems which
have resulted in the increase of prices of commodities and depreciation in terms of item gain. As
a result it has boosted the production expenses for these products. Therefore the company’s
customers in European countries have declined due to extended decline as well as the American
customers purchase rate that would have been hindered due to a reduced rate.
Social, cultural, demographic forces – according to the social perspective, most PepsiCo
consumers are aspiring for healthy commodities. Therefore, venturing into other regions will
need clear reformulation of the customer initial products which will create need to developing
healthier brand new regionalized products. This is because there is a high increase in the cost of
storage and packaging of the items. Lastly, due to a high increase in the fuel cost the
transportation and supply expenses will thus rise (Cherunilam, 2010).
Legal and political factors – The worthiness of the town food, insufficient access, and price will
result in obesity and malnutrition. There is huge distribution of the supply chain issues of various
local producers from where the food is grown to the manufacturing plants. Therefore, small scale
farmers where PepsiCo operates are in need of training in order to produce huge results.

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Technological factors – Over the years there has been a high increase in the energy and water
which are essential for the manufacture of the commodities. Therefore, low yield has also shown
significant influence of on the prices of raw materials include nuts, fruits, rice etc. On the other
hand, other additional bottling costs require more attention in the beverage sector (Worthington,
Britton & Thompson, 2018).
Competitive forces – The PepsiCo Company has a very competitive market all around the world.
The company contends against other powerful food producers which are smaller and privately
labeled. Additionally, they encounter firm competition from Coca Cola within the snack sector
although PepsiCo holds a significant portion in the marketplace.
Deductive and inductive Approaches
In this case the use of inductive and deductive approaches in the PepsiCo’s case is that the IVCC
should institute the crafting of a vending deal with the PepsiCo Company. Therefore from the
approach results it was found out that about 90% of individuals are supporting the need of
improving the healthy and security conditions at the company. Focusing our study on the
inclination of assessed beverages to the standard sodas that PepsiCo Company produces,
therefore a deductive theory employed is Realism which further research will be led. On the
other hand, positivism depends on the way that the truth exists autonomously independent of
what the general population or the things being examined trust, Realism considers reality i.e.
actualities and additionally the convictions and musings of the examination subject too.
Subsequently, the research paper supports Realism as the theory of my examination since I
should consider the real number of individuals that are prepared to devour the commodities and
also their convictions related with the company’s products.

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Experimental studies
SWOT analysis
SWOT
STRENGTH –S
1. Brand Recognition
2. The unification of bottling
plants
3. Diversified healthy product
line including
snacks, juice
4. Expanding into other
countries
5. Company is run by
experienced
management team
WEAKNESSES – W
1. Adjust costs downward in
economic climate
2. Increase healthy foods
divisions
3. Expand research and
development
3. Expand marketing to web
4. Related media outlets 5.
5. Reduce long term debt
OPPORTUNITIES – O
1. Gain shelf space through
product synergy
2. Increased demand for sports
drinks and flavored waters
3. Expand low cost line to
compete
against house brands
4. Expand into Brazil through
its
current acquisition of
Amacoco
Nordeste Ltda
5. Increase in carbonated soft
drink
usage in Asia and Europe
SO STRATEGIES
Increase brand name low cost
line for bargain shoppers.
Use Brazilian bottler to
expand into
Brazil and other regions in
South
America.
Increase variety of sports or
healthy type snacks aligned
with flavored waters.
WO STRATEGIES
Expand global sale to offset
long term debt.
Develop new low cost snacks
and beverages.
Create carbonated health
waters.
THREATS – T
1. Extensive marketing needed
driving marketing costs up
2. Carbonated soft drink
market in
decline
3. Kellogg and Nabisco’s
growing
snack divisions
ST STRATEGIES
Management signing strategic
Partnerships with smaller
snack companies.
Develop powdered drinks.
Experiment with other types
of beverage containers based
on Regional market.
WT STRATEGIES
Redesign water bottles for less
plastic, or develop
biodegradable bottles.
Restructure company by
paying down debts.
Increase marketing of colas on
alternate media outlets.

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4. Campaign against bottle
water
affecting usage
5. Industry operates
unchanged
The PepsiCo Company’s SWOT analysis exhibits that there is still room for the company
expansions which will be achieved through the creation of healthy products and other packages
which will aid in boosting production processes (Ingaldi & Škůrková, 2014). The healthy
products can be regionalized as the company aims producing other products that abide by healthy
and safety standards.
PESTLE analysis
Political and legal forces – Due to the fact that PepsiCo operates in different countries like Asia,
Africa, Europe, United states etc, there are certain political and legal forces which should be
considered in the prospective nation the company is. The company has to formulate effective
policies which will provide a suitable internal control which are in compliance with the state law.
Various considerations should be prioritized such as the country’s tax laws, the labor unions, and
the environmental laws (Hashem & Irshaidat, 2014). Therefore the company should abide by the
relevant laws of the country in order to attain corporate governance of the company.
Economic forces – the economic conditions of the PepsiCo Company greatly affects the
company’s production activities (Thomas, 2013). When the per capita increase, it will have a
substantial effect on the consumption rates of the products. Thus if the inflation level reduces
then there will be a negative implication on PepsiCo due to the reduced purchasing levels of the
consumers. In view of the fact that PepsiCo Company is operating and supplying products in vast
number of states, its headquarters are based in the US, thus implying the strength of the Dollar

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will affect the business processes. A rapid decline in the dollar value will thus lead to a high
opportunity cost for the PepsiCo exported products.
Social, demographic, cultural, and environmental factors – The living standard of various
people will institute the different consumption rates in different countries (Po Li, Kirana Yahya
& Fee Yean, 2016). Thus this can either be a risk or an opening for the products produced by the
PepsiCo Company. Additionally, PepsiCo can be in support of the sports conducted worldwide,
which portrays a signal that the company objective is improving people’s health. Therefore, the
main target of the company should be individuals who consume soft drinks or snacks regularly.
Other additional products such as Pepsi, Lay’s should be aimed at targeting young population,
while Quaker oats should be focused on the aging group. On the other hand, PepsiCo should
consider the educational levels in a particular country before initializing their advertising and
promotional strategies. Therefore, the company should make use of promotional campaigns
which will create awareness of the company’s products. Moreover, the company should maintain
conducive and natural environment in which it operates, this will ensure that the community is in
support of their objectives.
Technological Forces - Considering the extent at which the food and beverage sector is, the
PepsiCo Company needs to strive to stay ahead of its competitors using progressive
technologies. The company needs more mechanized assembly of initiatives to enhance
production and flexibility of products and services (Melović, Đurišić & Rogić, 2018). Moreover,
the company’s enhanced technologies give the food and beverage sector a new form of
marketing its products. A prolific approach of interacting with potential clients through the
internet enhances more chances of displaying the business to other global markets.

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Competitive Forces - The Company is regarded to have the second largest share of the market.
The table below shows a summary of the company’s performance in relation to relevant
competitors (Kraft and Coca Cola) in the food/beverage sector.
The table above shows that the penetration into the market of the company’s products is easy
since it functions in the rapidly developing sector. The company also transforms is social media
reach in terms of advertising its products (Gamble, Thompson & Peteraf, 2013). Moreover, the
company has embraced the opportunity and model of partnership with other industries e.g.
Starbucks. Apart from the progressive partnership the company has, it is faced with stiff
competition from Coca-Cola and the Kraft due to fact that it competitors operate using top
management strategies considering that they work as a mature food and beverage sector.
Moreover, the advancement of the carbonated beverage has also enhanced an entry and
substitution of products. Additionally, there also some health concerns that have been reported
regarding the company’s products.
Competitive Analysis