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Pepsico

Satisfactory Essays

CASE 21

PepsiCo’s Diversification Strategy in 2014

John E. Gamble
Texas A&M University–Corpus Christi

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epsiCo was the world’s largest snack and beverage company, with 2013 net revenues of approximately $66.4 billion. The company’s portfolio of businesses in 2014 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft-drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker
Oatmeal, Cap’n Crunch, Aquafina, Rice-A-Roni,
Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the lineup as highly complementary since most of its products could be consumed together. For example,
Tropicana orange juice might be consumed during breakfast with …show more content…

In addition, the company’s Performance with Purpose plan was focused on minimizing the company’s impact on the environment by lowering energy and water consumption and reducing its use of packaging material, providing a safe and inclusive workplace for employees, and supporting and investing in the local communities in which it operated. PepsiCo had been listed on the
Dow Jones Sustainability World Index for seven consecutive years and listed on the North America Index for eight consecutive years as of 2013.
Even though the company had recorded a number of impressive achievements over the past decade, its growth had slowed since 2011. In fact, the spikes in the company’s revenue growth since 2000 had resulted from major acquisitions such as the $13.6 billion acquisition of Quaker Oats in 2001, the 2010 acquisition of the previously independent Pepsi Bottling Group and PepsiCo Americas for $8.26 billion, and the acquisition of Russia’s leading food-and-beverage company, Wimm-Bill-Dann (WBD) Foods, for
$3.8 billion in 2011. A summary of PepsiCo’s financial performance for 2004 through 2013 is shown in
Exhibit 1. Exhibit 2 tracks PepsiCo’s market performance between 2004 and July 2014.
Copyright © 2014 by John E. Gamble. All rights

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