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Strategic Management Essay

3498 words - 14 pages

Question 1: Why was PepsiCo essentially organised into North American and international divisions? Why were there some variations in this structure? Examining the organisation structures outlined in this chapter, in which category would you put PepsiCo?Why PepsiCo was essentially organised into North American and international divisions?Pepsi Co is the world's largest snack and crisp manufacturer with a series of brands in regions of the world. PepsiCo was very famous and successful in almost every product category in North America, therefore it was decided to realign its organisational structure, in order to position the company for continue growth and simultaneously leverage the talents of senior leaders. (Lynch 2009:450).PepsiCo's strategy to build on its strengths in different markets resulted in their decision to combine its international and beverage operations. (Lynch 2009:451). This strategy was clearly extremely successful as PepsiCo is ranked (by net revenue) as the largest food and beverage business in North America. (www.drinks-business-review.com 2007 Online).By restructuring the North American business PepsiCo ensures that its assets in the continuous developing of non-carbonated drinks market could be exploited across its full range of drinks. (Lynch 2009:455).By creating units that span North American and international markets, as well as developed and developing markets, allows PepsiCo to:Share best practices among North America and international businesses,Providing valuable development opportunities for management who will deliver the organisational strategy,Introduce the brands which are largely unknown outside the American continent by combining these product areas internationally with other known product groups,Deliver strong top-line performance and consistent profit growth. (www.drinks-business-review.com 2007 Online).PepsiCo was aiming to build on its strong competitive resources which included its major network of contacts with supermarkets across North America and to a lesser extent other countries. To achieve this aim, the decision was made to develop a new organisational structure for PepsiCo. The purpose of the new organisational structure is to exploit the full acquisition potential. (Lynch 2009:450). By restructuring the North American business PepsiCo ensures that its assets in the continuous developing of non-carbonated drinks market could be exploited across its full range of drinks. (Lynch 2009:455).How PepsiCo Reorganised in 2004.Organisational Structure in 2004Organisational Structure in 2001Figure XXX How PepsiCo Reorganised in 2004. (Sourced from Lynch (2009:451)PepsiCo decided to build on its strengths in different markets and therefore they combined its international and beverage operations. The following contributed for variations to the structure:Table www: PepsiCo further reorganisation - 2004 (Lynch 2009:455)
Divisions Combined

New Division Name

Reason

PepsiCo Beverages International & Frito...

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