PepsiCo Restaurants - Case Study Example

Task: PepsiCo Restaurants Introduction PepsiCo started in 1898 as a soft drink business by selling Pepsi drinks. It became famous in 1965 when the by then company’s CEO Donald Kendall combined it with a snack food company called Frito-Lay. After some years, PepsiCo collaborated with other external companies such as Pizza Hut, Taco Bell and KFC thus increasing its external growth (Harvard business school 1).“Should PepsiCo acquire California Pizza Kitchen and Carts of Colorado, Why or why not?

”PepsiCo should acquire both Carts of Colorado (COC) and California Pizza Kitchen (CPK) because both businesses make profits therefore, this will increase the total profits made at PepsiCo. Secondly, both businesses have the capabilities of growing as COC has invested in technology, which might end up being cost effective while CPK has replaced advertising with store openings, which is more profitable. In addition, COC has many clients around the globe, therefore this will benefit PepsiCo by enabling it to enter the new competitive market and supply its products to big entities in the globe.

Concurrently, acquiring CPK will be beneficial to PepsiCo because CPK has committed employees, which will increase PepsiCo’s task force (Harvard business school 13).“How does PepsiCo add value to its restaurant units, what corporate resource or core skill does PepsiCo bring to the restaurant business?”PepsiCo adds value to all its restaurant business because before it purchases any restaurant or launches a product, it formulates a strategic plan to direct it. In the restaurant industry, the strategic plan that guides PepsiCo believes that fast food restaurants will be on demand for the coming decades; therefore, it is a preferable business for investment (Harvard business school 6).

To gauge the value that PepsiCo adds to these restaurants, one can consider the situation in Pizza Hut, Taco Bell and KFC. The cooperate resources and core skills that PepsiCo apply in its business include the marketing strategies, finance, operations, human resources and information systems (Harvard business school 3).“Let us say that PepsiCo makes the acquisition of the two aforementioned companies, how should PepsiCo structure the reporting relationship of its newly acquired units with the rest of the company?

”After acquiring CPK and COC, PepsiCo CEO will structure his reporting so that he explains to the rest of the company that each of the acquired restaurants operates on its own, but they just collaborated to share their views. The COE will insist that they conduct their business transparently; concurrently, they are helping other businesses to grow (Harvard business school 10).“Does PepsiCos current organization of its restaurant business make long-term sense?”The current organization of PepsiCo restaurants makes long-term sense because it is a great business operating at a fair price.

The current restaurant chain works in a decentralization manner whereby every chain operates on its own and maintains loyalty of keeping the chain’s secrets. PepsiCo gives out an attractive yield together with dividends to its customers; it aspires to have an above average long term growth on a sensible valuation. In addition, PepsiCo produces dissimilar snacks and beverages, which it supplies to top consumer brands in the world. It consists of varying portfolios such as the Pepsi, Tropicana and Quaker among others (Harvard business school 6).

ConclusionPepsiCo has carefully observed its mission and objectives, which helped it to emerge the worlds’ leading producer of food and beverage. PepsiCo is also among the companies that supply the best products and offer high quality customer services. Therefore, for it to progress on its performance and maintain its position as the leading food and beverage manufacturing company, it should consider the following recommendations. i. PepsiCo should consider supplying its products all over the globe so that it can compete with leading companies such as coke.ii. Pepsi should gain interest in expanding its beverage section by increasing supply in the beverages that show high potentials.iii. PepsiCo should consider acquiring restaurants that are more vibrant and reformist in order to increase their total profits.iv. PepsiCo should work on improving their employee relationship so that they can increase mouth marketing around the globeWorks CitedHarvard Business School.

PepsiCo’s Restaurants. 2001: Rev. February 27