Final Presentation is on PepsiCo
Please read the instruction very carefully
Final Presentation– 200 Points
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Submission of presentation material: due by 8 pm the night before present
Time: 15 minutes + 5 minutes Q&A
Format: upon your team decision
Dress code: professional
Grade is based on:
– Content of the presentation
• Summarize properly of firm’s current situation with strategy knowledge framework
• Present a strategic initiative that meets the strategic goal
• Able to justify the strategic initiative based on evidence from previous research
• Demonstrate detailed strategy implementation plan
• Able to answer questions satisfactorily
– With consideration of peer evaluation score on the presentation.
– Participate actively in providing feedback to other team presentation
– Dress professionally for all team members
– Timely submission for presentation slides
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Presentation
1. One or Two Strategic Initiatives:
Find the right thing to do.
2. Implementation (PARTS+MM):
Do it in the right way.
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Profit allocation
Blue
Ocean
Strategy
Int’l
Strategy
Diversific
ation
Matrix
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Strategic Management Process
External
Analysis
Vision &
Mission
Objectives
• who we are
•PESTLE
•Five-Forces
•Industry Lifecycle
•Industry Convergence
•Competitive dynamics
(Strategic group, AMC
Framework, Game Theory)
Internal
Analysis
• what we do
• where we are going
• Value Chain analysis
• VRIO analysis
• Measurable
• Specific
• Attainable
• Aspiration level
Strategic
Choice
Strategy
Implementation
Competitive
Advantage
•Organizational Structure
•Control processes
•Compensation
• Routines
Strategic Initiative (SI): proactive
temporary team undertakings intended
to renew or expand the capabilities of
an organization.
- Corporate level: Diversification, M&A,
Alliance, Divestitures, Organic growth, Spinoff, Corporate ventures, etc.
- Business level: low cost, differentiation,
blue ocean, alliances, etc.
•Temporary vs. sustained
• Parity
•Disadvantage
•Survival
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SI Types
Initiative Type
Definition
New products and
services
New products and services are actions such as launching new products/services which are
associated, among others, with search, variation and risk-taking. These actions do not include
actions such as improvements to existing product quality which are associated, among others, with
refinement and efficiency.
Process innovation
Actions such as entering new technology fields and research on e and the corresponding utilization
of e new process technology.
Internal venturing
Actions such as initiating new ventures without cooperation with external parties.
Actions such as mergers, acquisitions, and joint ventures. These include strategic projects started up
in a joint venture and strategic alliances. In addition, acquisitions of interests/territories are coded
External venturing
as external venturing actions since they imply participation of parties outside Shell.
Organizational
Actions such as reorganizations of organizational structure, consolidation, down-scoping, or closure
restructuring
of functions.
(Ben-Menahem, Kwee, Volberda and Van Den Bosch, 2013)
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SI Examples
Initiative Type
Examples
“New product initiatives continued with the launch of Shell Formula Diesel in more countries in 1988 and
New products and increased availability of unleaded gasoline.” (Shell Annual Report 1988, p. 12; initial plan was mentioned
services
in Shell Annual Report 1987, p. 14)
“Process innovations and applications research have led to the development of water-based epoxy resin
systems for use in paints and coatings. The award-winning Shell DeNOx catalyst system, which removes
Process
nitrogen oxides from flue gases, is both less expensive and easier to install than conventional methods.”
innovation
(Shell Annual Report 1992, p.10)
“In the USA, Shell Oil has established a [wholly-owned] subsidiary through which it plans to explore
Internal venturing
biomedical business opportunities.” (Shell Annual Report 1983, p. 8)
“Shell Nederland Chemie and Akzo Zout Chemie in the Netherlands have entered into a joint venture for
the manufacture of vinyl chloride and PVC, thereby achieving complete integration from feedstocks to
External venturing
end product.” (Shell Annual Report 1982, p. 10)
“Building the future: Achieving a satisfactory return drives continuing restructuring in Group Operating
Companies and business functions, complemented now by the new Service Companies’ organisation
which was put in place in January 1996. Together these form the base on which to build what we call the
Organizational ‘New Shell’, a truly competitive business organisation, retaining the best values of the past, but increasing
restructuring
its focus on the realities of modern-day business life.” (Shell Annual Report 1995, p. 4)
(Ben-Menahem, Kwee, Volberda and Van Den Bosch, 2013)
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Example of SI: Best Buy
“Renew Blue” Turnaround Background:
• Best Buy (BBY), once lauded “Company of the Year” by Forbes (2004) and a “Most
Admired Company” by Fortune (2006), experienced precipitous declines in its stock
price and earnings from 2010-2012 due to slowness in capturing online
opportunities.
• Investors concerned that BBY’s future as a publicly-traded company may go the way
of its vanquished competitor, Circuit City (bankrupt and liquidated in 2009).
Reference: “Renew Blue: Best Buy Analyst and Investor Day”, Nov. 13, 2012
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Example of SI: Best Buy
• Best Buy identified two problems to solve:
COMPS compare the degree of
revenue growth/decline that a
firm's stores achieve relative to
their sales in previous years. Sales
numbers from stores that have
been operating for more than a
full year are used in the
comparison.
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Example of SI: Best Buy
• Best Buy announced Renew Blue in November of 2012.
• Renew Blue project is defined as a winning online strategy to
reinvigorate customer’s online shopping experience
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Example of SI: Best Buy
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Example of SI: Best Buy
• Is Renew Blue a Strategic Initiative?
✓ Temporary: Undertaking of finite duration intended to improve firm
performance
✓ Coordinated: Focused on important benefits for many stakeholders, such as
customers, suppliers, investors, leaders, etc.
✓ Renew/Expand: Reinvigorated & redesigned website & spaces
✓ Capabilities: Strengthened innovative revenue streams & efficient cost
structure
✓ Long-Term Evolution: Transformation of the organization through increased
return on invested capital
• Is Renew Blue executable?
❑ Competitive diagnosis of BestBuy’s current issues
❑ Renew Blue has linked its initiatives to its value chain activities
❑ Resources have been assigned and implementation plan has been identified
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A bad example of SI
Starbucks to encourage baristas to discuss race
relations with customers
http://fortune.com/2015/03/16/starbucks-baristas-race-talk/
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How to implement SI also matters:
the example of Netflix
• https://www.youtube.com/watch?v=c8Tn8n5CIPk
• https://www.youtube.com/watch?v=s4d-di_n3QE
The economics of video streaming and DVD rental brought Netflix to conclude
that the businesses were better off separated. However, they erred in assuming
that the separation would be well accepted by their customers. Above is the
explanation of the separation and how it would affect users after the uproar
ensued. Ultimately, the customer pressure pushed them to reverse their
decision.
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Final Presentation
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Final Presentation:
Recommendation to Enhance the Strategic
Position of your Firm
Given:
Develop:
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• Detailed strategic action/move
designed to increase the
competitive position of the firm
which should lead to an increase
in the firm’s stock price
• The strategic action should
address opportunity/threat
and/or firm’s capabilities
/disadvantages
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Financial benchmarketing,
resources, capabilities, stock price
Mission , Objectives and top
management team’s value/
capabilities
Strategic analysis of each segment
Vertical integration
Corporate diversification
M&A and alliances
International strategies
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Steps for Final Presentation
• Overview of key issue within the context of
“givens”
– Provided concise set conclusions/implications derived
from the “givens” and summarize in appendices -make
sure it is performance-related
• Strategic action
– From your assessment of the “givens”, identified an
action/strategic move that will enhance the firm’s
competitive position and hence its stock price
• Implementation details
– Developed a detailed implementation plan related to
the PARTS + M&M framework
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Investors like profitable growth so cost cutting measures are often
not rewarded unless they are accompanied by growth
Steps for Final Presentation
1. Provide a concise set conclusions/implications derived
from the “givens” and summarize in appendices make sure it is performance-related
2. From your assessment of the “givens”, identify an
action/strategic move that will enhance the firm’s
competitive position and hence its stock price
3. Develop a detailed implementation plan related to
the PARTS + M&M framework (see next slide)
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PARTS + M&M framework
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Gant charts are useful for visualizing the steps
People involved
Activities to be done
You will need one table for each of your
Resources needed
strategic initiatives.
Timing of activities
Please refer to the examples on BB.
Symbolic activities for motivation
• Measurements to evaluate implementation
• Milestones along the way to see if corrective
action is needed
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GANTT Chart for Project Management
https://www.youtube.com/watch?v=WBUnbrN4UvY
Instruction as to how to make the chart
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Appendix
Strategic Initiative Examples
https://www.youtube.com/watch?v=4Vean4_-Mqs
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Strategic Initiative Examples
Strategic Initiative: How many
shirts to produce for the World
Cup?
• Design and marketing company
•Outsources manufacturing – over 1 million
people employed making shoes
• If a roll-out is unsuccessful, it takes 2 years to fix
(3-4 roll-outs a year
•Brazil is Nike’s 3rd largest market
•Price of Nike shoes in Brazil 2x U.S.
Strategic Initiative Examples
Strategic Initiative:
How to generate sufficient
M&A business given that a lot
of money that left Europe
and U.S during financial crisis
is move back
•Few M&A deals done with debt because interest rates are so high (e.g.,
checking accounts pay 10% interest)
•Middle class now is close to 40-50% - they have access to products now
they want quality and variety
•Firms’ formal processes are lagging and there is a talent gap – HR
departments are very important
Strategic Initiative Examples
Strategic Initiative:
How to leverage the Olympic
Sponsorship to gain market share
•1st time to be an official sponsor of the Olympics
•Sponsorship is not corporate wide but limited to Brazil
•Gained experience during the Confederation Cup – preview to the World
Cup
•J&J products widely known in Brazil
• “We Care” theme “INSPIRING THROUGH CARING”
Strategic Initiative Examples
Strategic Initiative:
How to leverage World Cup
coverage into increased
penetration of “pay TV”
•ESPN of Brazil and owned by a company similar to Comcast
•70% of TV is free
•Pay-for-view is relatively new to Brazilian market
•Will cover every game (64) – only TV station to do so
Strategic Initiative Examples
Strategic Initiative: How to work with farmers to increase their
yield (productivity) given images of bio-engineering and high
price of seeds
• The arable land used to feed the world is the size of South America
• World population is to rise to 9billion by 2050 from 7 billion today
• Would need arable land size of North and South America to feed the world if no new
technological advances → innovation is key
•Farming of any land that is not currently being farmed is prohibited in Brazil
•Collective farming comprised of many small farms is common
• bio-engineering has negative image
Strategic Initiative Examples
Strategic Initiative:
How to use social media to
assist their outsourced sales
consultants
•Beauty products
•Darling of Brazil based on image of environmental
sustainability
•Yearly votes as one of the “best places to work” and
“innovation”
•Direct sales model (e.g., Avon) with over 1 million sales
consultants – outsourced
• low cost imitators
•Increasing international expansion (e.g., France)
Management 6890
Wayne State University
Fall 2019
By: Samantha Berry, Steven Michael, Fariha Peuly, Mikayla Thompson, & Ronaldo
Xhaja
Company Background-Steven
Company Metrics- Steven
Strategic Initiative
Risk Factor for PepsiCo: As consumer health concerns continue to rise and dietary
preferences change, demand for PepsiCo products may adversely be affected if the
company does not have the ability innovate, market, or distribute products effectively to
meet these needs (Annual Report, 2018).
Strategic Initiative: New Services and Products
● Includes launching new products & services, which are associated, among
others, with search, variation, and risk taking.”
Reformulating and refining products ingredients to accommodate for rising health
concerns
Strategic Initiative - Problem Identified
Problem
Consumers are
trending toward
healthier beverage
and snack options,
and are willing to
give up familiar
favorites to do so
(IFICF, 2018)
Driven By
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Changes in consumer
health habits and
concerns
Worldwide obesity rates
doubling since 1980
brings concerns to the
WHO (World Health
Organization)
Laws and regulations
regarding health and
safety of consumers
Solutions
Expanding PepsiCo’s product portfolio:
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Innovating and reformulating
products to reduce sugars,
sodium, and saturated fats
Developing nutritious products
to increase customer options
Collaborating with other food
and beverage companies to
form products targeted towards
healthier options.
PepsiCo 2025 Sustainability Agenda- Performance With A Purpose
● PepsiCo launched their sustainability agenda in 2016 which is designed to foster
continuous business growth in a way that responds to changing consumer and
societal needs (PepsiCo Website).
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A focus on creating a healthier relationship between people and food
Goals specifically related to the transforming PepsiCo’s food and beverage product
portfolio
Contribute to a more sustainable global food system
● This initiative falls hand in hand with their long term goal of “Performance With A
Purpose” (PepsiCo Website).
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Helping to improve health and well being with the products PepsiCo sells
PepsiCo 2025 Sustainability Agenda- Performance With A Purpose
● Mission → enable better nutrition at scale by continuing to develop a broader
portfolio of food and beverage choices, and increasing access to great tasting,
nutritious options
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At least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added
sugars per 12-oz serving.
At least three-quarters of its global foods portfolio volume will not exceed 1.1 grams of saturated fat per
100 calories.
At least three-quarters of its global foods portfolio volume will not exceed 1.3 milligrams of sodium per
calorie.
Potential Results of Implementing SI- 2025 Sustainability
Reformulate Products
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Reduce fats, sodium, and
sugars
Develop relationships
with sustainable
farmers/agriculture to
produce products that are
GMO free, organic, ect.
Expand Product
Portfolio
+
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Develop new product lines
that provide healthier options
Ex: Lay “Baked” Line
Introduce zero calorie
beverage options (Ex:
Gatorade Zero, Unsweetened
Pure Leaf)
Invest in R&D to identify
new ingredients, recipes, and
sweetners to help develop
new products (Forbes, 2017).
Increase Business
Growth
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As PepsiCo refines its product
portfolio and modifies
ingredients → creates a larger
demographic of consumers
Sales will increase → revenue
growth
Stronger brand recognition
Better to begin with activities and then move onto
people
Activities to be done:
Look at the major activities first and then break them down into little activities
inside.
Look at the 5 steps in the scale for food article and do research on each step and
find out hat smaller tasks make up the big ones. And find out who is responsible
for getting that step done. Also find out how long it takes on average to get steps
done. This how long part might vary based on how many things you are doing.
So take an example product and do research on how long it look int the b=past to
develop it from an idea to the final product. Example: how long did it take to do
these things with baked lays chips. Try to look at specific factories if there isn’t a
lot of information out there. Be flexble. You don’t have to stick with my plan if you
Strategic Implementation Plan-PARTS
Strategic Implementation Plan-M&M Framework
-Mikayla
Conclusion- Ronaldo
References -APA Format
https://www.pepsico.com/docs/album/esg-topics-policies/health-and-wellness-approach-and-engagement.pdf?sfvrsn=e5c67405_8
https://foodinsight.org/wp-content/uploads/2018/05/2018-FHS-Report-FINAL.pdf
https://www.pepsico.com/news/press-release/pepsico-launches-2025-sustainability-agenda-designed-to-meet-changing-consumera10172016
https://www.forbes.com/sites/greatspeculations/2017/05/19/how-pepsico-is-transforming-itself-into-a-healthiercompany/#5f49d9643890
Q&A
-Ronaldo
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