PepsiCo, Inc. was incorporated in 1919, primarily as a beverage company. Its main product, at the time, was Pepsi Cola. However, since then Pepsi has grown by leaps and bound and today holds the #2 spot in the global beverage industry, surpassed only by archrival, Coca-Cola. The company owns several leading beverage and snack brands such as:
a) Pepsi-Cola – Variants of Pepsi, SoBe, Sierra Mist, Slice, Tropicana, Aquafina, Ocean Spray, Mountain Dew, AMP Energy, Mug Root Beer, No Fear, Seattle’s Best Coffee, Tazo, in addition to partnerships with Starbucks and Lipton.
b) Frito-Lay – Lay’s, Ruffles, Doritos, Tostilos, Cheetos, Grandma’s Cookies, Sunchips, Munchos, Smartfood popcorn.
c) Gatorade – Gatorade G, Gatorade X-factor, G Natural, G2, G2 Natural, Gatorade Rain and Propel.
d) Tropicana – Pure premium, Twister, Smoothies, Pure Tropics, Tropicana 100, Dole Juices and Naked Juices.
e) Quaker – Quaker Oats, Cap’n Crunch, Life Cereal, Quisp, King Vitaman, Mother’s Cereal, Rice-A-Roni, Pasta Roni, Puffed Wheat.
PepsiCo has four main business units: PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa or AMEA. Indra Nooyi has been its CEO since 2007. The company operates in over 200 countries, employs over 285,000 people globally and has an annual revenue of over $60 billion . It is currently focused on maintaining a balance between sustainability and profitability.
PepsiCo HR Objectives and Challenges
As per its 2010 Annual Report, PepsiCo had identified the following key areas of focus for HR: i) Match and maintain employee engagement and job satisfaction levels at par with Fortune 500 Companies, ii) Include local communities in the global workforce to encourage diversity, iii) Introduce fitness and wellness programs across global offices to promote a healthier lifestyle among employees, iv) Create a safer work environment by incorporating industry best practices, v) Renew commitment to human rights, dignity and respect by continued annual training in Code of Conduct, vi) Be recognized as one of the world’s top companies for leadership development, vii) Build a work environment that encourages learning and development, viii) Invest in training for employees across all organizational levels, ix) Expand operations to create bigger job markets, x) Support, employee education, community service and charity through various initiatives.
The following have been identified as potential HR challenges and risk that PepsiCo might face and that may adversely affect its operations, profitability and reputation:
i) Failure to attains talent sustainability goals.
ii) Implementation of technological upgrades, business transformation and the profitability of outsourcing across its global operations.
iii) Recruiting and retaining top talent to keep pace with growth, reducing employee turnover.
iv) Renewing agreements with workers unions to avoids strikes and outages.
v) Effectively managing transition of Mergers and Acquisitions or M&As.
PepsiCo Legal Challenges
Considering the global nature of its business, PepsiCo has to deal with a constantly changing legal and regulatory environment on a daily basis. Everything from how the company carries out its business, supply chain, manufacturing, sales, marketing, advertizing, distribution and even the products that are being sold are governed by domestic as well as international laws. These laws, government or agency, are subject to change based on political, social as well as economic reasons. Food and drug laws, advertizing and marketing censorship, accounting and taxation laws, competition laws as well as environmental control, all affect how PepsiCo’s operations in a given country run.
Recommendations to Meet Challenges
PepsiCo is well aware of the challenges it faces in the HR and legal spheres and being one of the largest companies in the world, has several controls already in place to manage the inherent risks. Some of these measures include: i) The PepsiCo Risk Committee or PRC to manage strategic and reputational risks, ii) Division Risk Committee or DRC to manage risks pertaining to specific divisions, iii) PepsiCo Risk Management Office for coordinating with and supporting the PRC and DRCs, iv) PepsiCo Corporate Audit for controlling internal processes and procedures, and v) PepsiCo Compliance Department for constant reviewing, updating and coordinating of legal and compliance practices and policies.
PepsiCo is constantly expanding its operations and looking to conquer new and untapped markets. For this purpose, it merges with or acquires several organizations, such as the Russian dairy and juice company Wimm-Bill-Dann or WBD acquisition of 2010. M&As always tend to call for reorganization of workforces and tend to shift the managements focus and efforts from core objectives. As such, PepsiCo will need to ensure that its employee engagement and job satisfaction initiatives are not negatively impacted by this. Also, expanding to new markets would require the company to hire new talent. However, internal talent waiting to be promoted should not end up being overlooked in the process. PepsiCo will need to ensure that key positions are, wherever possible, filled by internally promoting employees. This is crucial for keeping employees motivated and enabling to grow within the organization. On the legal and regulatory front, keeping a keen eye on economic and political development in key regions, with enhanced focus on crisis hit countries will help the company to anticipate changes and adapt its policies and procedures accordingly.
Bibliography
PepsiCo. (2011). Corporate Profile. Retrieved November 26, 2011, from www.pepsico.com: http://www.pepsico.com/Investors/Corporate-Profile.html
PepsiCo. (2011). PepsiCo Annual Report 2010. Retrieved November 26, 2011, from www.pepsico.com: http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf
