It is necessary to understand the issues that surround strategies used by businesses to improve their sales. An organization must have objectives it aims to achieve within specified periods (Youngman 2009). It is necessary to explain that businesses cannot measure their performance if they do not have objectives. Therefore, it is important to set objectives that can be achieved to ensure the operations of a business are relevant. A strategy is like an umbrella that covers a lot of aspects that work together or in isolation to ensure a business achieves its targets.
A common strategy employed in most businesses is organizational purpose. All businesses need to identify their purposes because this will help them to achieve their targets (Grant 2013). For instance, the purpose of the Coca-Cola Company is to offer quality drinks to its customers. Therefore, this company will ensure its strategies are focused on providing quality products to consumers. This means that an organizational purpose directs the strategies used by a company to promote its sales. It is necessary to explain that organizational purposes ensure companies do not just focus on making profits and ignore the need to produce high-quality products.
PepsiCo: Profit and Responsibility
The beverage industry is not controlled by many players because it is only coca-cola and PepsiCo that operate beyond many international boundaries. This means that these companies enjoy a monopoly in supplying their products to almost all countries in the world (Connrills 2011). However, Coca-cola seems to enjoy and dominate most markets compared to PepsiCo that keeps struggling to gain ground. It is important to explain that PepsiCo has employed different strategies to try to salvage its operations, but things seem to be getting harder when this company thinks it is achieving its targets (Yazijian 2010).
Indra Nooyi (Chairman and CEO of PepsiCo) embarked on a growth strategy that ensured this company produced healthy and environment-friendly products. She helped this company to merge and acquire Quaker Oats and Tropicana respectively. This company tried to strengthen its market base by acquiring these companies, but this did not produce the expected results. Consumers had prior knowledge that Quaker Oats and Tropicana produced fruity concoctions that were not healthy (Kombluth 2010). This was a major setback for this company and other beverage producers due to consumers’ preferences because they were shifting to juices from fresh fruits.
This company made an unwise move by announcing that it would sack 8,700 employees to ensure the price of its market share improved. It had under-invested in this industry and just realized the need to inject more funds into its activities at the expense of sacking workers (Capparell 2008). The marketing and advertising expenses of that year (2010) doubled that of Coca-cola yet there was an insignificant impact on the price of its shares and market penetration.
The CEO is working hard to rebrand this company by participating in corporate social responsibility to appreciate the community’s support. However, this move is wasting a lot of PepsiCo’s money at the expense of reduced sales. In addition, it re-employs their staffs that have excellent performance records in other organizations to try to restructure its management (Hays 2012). However, PepsiCo does not have the right balance between producing healthy drinks and spending money on marketing, advertising, and corporate social responsibilities and this means it has a dark future.
References
Capparell, S 2008, The Real Pepsi Challenge: How One Pioneering Company Broke Color Barriers in 1940s American Business, Free Press, New York.
Connrills, J 2011, Good to Great: Why Some Companies Make the Leap…and Others Don’t, Harper Business, New York.
Grant, R 2013, Contemporary Strategy Analysis: Text and Cases, Wiley, New York.
Hays, C 2012, The Real Thing: Truth and Power at the Coca-Cola Company, Random House, New York.
Kombluth, J 2010, The Other Guy Blinked: How Pepsi Won the Cola Wars, Bantam Books, New York.
Yazijian, H 2010, The Cola Wars: The Story of the Global Battle between the Coca-Cola Company and PepsiCo, McGraw-Hill, New York.
Youngman, I 2009, Competitor Analysis in Financial Services, Woodhead Publishing Limited, Cambridge.