PepsiCo Case

University of Illinois, Urbana Champaign **We aren't endorsed by this school
BADM 449
Oct 23, 2023
Uploaded by sgregus16 on
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Recommendations for Carts of Color: My recommendations for Carts of Color include lowering their prices to develop a cost leadership strategy. It was mentioned that they were 18 months ahead of their competitors in terms of engineering and design, but were still not the lowest-cost cart and kiosk manufacturer. If they could figure out a way to lower their manufacturing costs and consider outsourcing some of their materials needed in their production process while still keeping their in house costs low, they could become a lot more attractive to customers. Another recommendation I have for COC is to narrow their focus onto one certain industry and really capitalize on it. The carts do not have a specific industry they are focused on and I think that is why PepsiCo is not sure if the existing relationship is sufficient enough or what value COC will add to PepsiCo. In order to determine which industry or market to hone in on, they can observe who their target customers are and who these carts are most to benefit and attract. Location and geography is also a huge factor that they should consider when deciding which industry to focus on. Recommendations for CPK: Although CPK has a lot of differentiation in terms of their menu items, they mainly just highlight their pizzas and all of the different toppings and kinds that are available. I think that if they did more to market their differentiated menu, that would give them a competitive advantage over other pizza places that strictly serve pizza. It was mentioned that CPK limited its advertising to store openings but I think investing even a little bit more into their wide variety of menu options would make it more well-known to those who are not familiar with the chain, as the name of the restaurant is "California Pizza Kitchen." I also think that offering a delivery service would help them compete with other pizza chains as I cannot even count how many times I have had pizza delivered or someone I am with offers the idea of "let's just order a pizza." The in person experience is always great, but especially in the American culture and with the busy schedules, having a delivery option could entice a lot more customers to CPK. In my opinion, Pepsi should continue in the restaurant business. They have had a large amount of success in the restaurant industry in the past, as their restaurant segment attained the highest revenue of the company's three segments. Their reputation and willingness to move people within and across divisions gave them a competitive advantage in restaurants, contributing to their overall success. They found their targeted audience in the restaurant business, which was "quick service restaurants" or fast food chains. As these are American staples due to their convenience and simplicity, they rarely have to worry about a lack of customers or business generating from these chains. These chains have also adapted well to competitors' advances, as Pizza Hut became a "generalist", offering drive thru, delivery, casual dining and carry out while their competitors remained "specialists' ' and either did delivery or carryout or dine-in. Taco Bell rapidly added new products to their menu, reduced the size of their kitchen, purchased prepared items and improved the speed of service to successfully compete against competitors. KFC restructured their operations, renovated their units, drive thru windows and headquarters to keep up to speed with competitors. Their PFS also gave them a competitive edge by reducing supply costs and saved them between one half and five points on their food costs while providing tailored distribution to customers to enhance competitiveness. Their focus on efficiency and growth will continue to serve them well and expanding into this market space and staying there will continue to build and diversify their portfolio.
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