314235540 Design Strategic Plan Individual Case Analysis (PepsiCo-2009) NAZIFA BTE ABD. GHANI (MR111037) Assoc. Prof. Dr. Mas Bambang Baroto International Business School University Technology Malaysia April, 2013 [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Contents 1.0 Company background ....................................................................................................................... 3 2.0 Description of Industry ..................................................................................................................... 4 3.0 External Assessment ......................................................................................................................... 5 3.1 Positioning Diagram Strategic Group Identification ..................................................................... 5 3.2 Opportunities & Threats ............................................................................................................... 7 3.3 EFE matrix................................................................................................................................... 10 4.0 Internal Assessment ........................................................................................................................ 11 4.1. Strengths & weaknesses ............................................................................................................ 11 4.2 IFE Matrix .................................................................................................................................... 12 4.3 Value Chain Analysis (Non-Alcoholic beverages Segment)......................................................... 13 5.0 Strategy Formulation ...................................................................................................................... 16 5.1. SWOT Matrix .............................................................................................................................. 16 5.2 IE Matrix ...................................................................................................................................... 18 5.3 Strategy Formulation Conclusion ................................................................................................ 18 6.0 Strategy Implementation ............................................................................................................ 19 6.1 Operation Management Process.................................................................................................. 19 6.1.1 Supply Management Process .............................................................................................. 19 6.1.2 Production Management Process ........................................................................................ 25 6.1.3 Distribution Process ............................................................................................................. 30 6.1.4 Risk Management Process ................................................................................................... 33 6.2 Customer Management Process .................................................................................................. 47 6.2.1 Customer Selection Process ................................................................................................ 47 6.2.2 Customer Acquisition Process ............................................................................................. 52 6.2.3 Customer Retention Process ............................................................................................... 57 6.2.4 Customer Growth Process .................................................................................................. 61 2|Page [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 1.0 Company background Founder Caleb Bradham in New Bern, North Carolina, 1898 Division Non-alcoholic Beverage Industry Net revenue Net revenue by division Mission & vision The salty or Savory Snack Food Industry Breakfast Food Industry * PepsiCo is organized into three business units. However, its three business units are comprised of six divisions: FLNA, QFNA, LAF, PAB, EKEU, and MEAA 2006 2007 2008 $ $ $ (million) (million) (million) 35,137 39,474 43,251 2,615 2,845 2,959 FLNA 554 568 582 QFNA 655 714 897 LAF 2,315 2,487 2,026 PAB 700 774 811 UKEU 401 535 667 MEAA Mission statement: Our issio is to e the orld’s pre ier o su er produ ts company focused on convenient food and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in we operate. And in everything we do, we strive for honesty, fairness and integrity. Vision statement: PepsiCo’s respo si ilit is to o ti uall i pro e all aspe ts of the orld i hi h e operate-environment, social, economic-creating a better tomorrow than today. Our vision is put into action through programs and a focus on environmental stewardship, activities to benefits society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. 3|Page [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 2.0 Description of Industry * Because of the lack information given in the case study and time limitation, the whole analysis for this report will be only focused on Non-alcoholic beverages segment. Name of the industry Industry Market Cap Industry Net Income Main competitors in the industry Non-Alcoholic Beverage Industry Industry products and services PepsiCo: PepsiCo of late has a more focused strategy in the snack, breakfast food and non-alcoholic beverage markets. The company produces Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, Dola Juices and SoBe. Make up a $395billion world market with carbonated drinks the largest share of the market at $150 billion. 1. Coca-Cola 2. PepsiCo Coca Cola: Coca Cola has continued to strengthen their juice, ready-to-drink tea and coffee products, water and sport drinks along with the introduction of Truvia as a sweetener. *The industry composed of carbonated soft drinks, fruit and vegetables juices, bottled water, sports and energy drinks, concentrates and ready-todrink coffee and teas. 4|Page [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 3.0 External Assessment 3.1 Positioning Diagram Strategic Group Identification *Because of lack of information on Non-alcoholic beverages segment’s competitors, the analysis is only focused on PepsiCo and Coca Cola Company since it is clear mentioned in the case study that both of them are the major player in the industry. Case facts of X axis - Market Share Coca Cola and PepsiCo holding the largest share of the U.S market at 23 percent and 25percent respectively .Coca Cola however holds the largest share of the U.S cola market at 41 percent with Pepsi second at 36.7 percent (Pg 74, Para 5). Pepsi and Coke have fought the cola wars for decades and has generally beaten out Pepsi for market share (Pg. 78, Para 3) Case facts of Y axis – Financial Position The financial for Coca Cola shows a strong cash position of $4,979 billion and long term debt only $2,781 billion. Coca Cola net profits of $5,807 billion in 2008 (See Exhibit 8) (Pg. 76, Para 1). Coca Cola shows a strong financial position and smaller long term debt compare to PepsiCo. Cost of sales for PepsiCo has increased as would be expected. These costs have increased from 41.32 percent of sales to 43.43 percent of sales net income has decreased from $5.6 billion to $ 5.1 billion , return on assets has dropped from 18.81 percent to 15.17 percent , inventory turnover has decreased from 8.02 times to 7.81 times and long term debt has increased from $4,203 billion in 2007 to $7.858 in 2008 (Pg.73, Para1). 5|Page [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Size of circle – Product Diversification Pepsi as bottlers of soft drinks. The company produces alsoMountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, Dola Juices and SoBe (Pg.69, Para 4). In addition, Pepsi Co includes the brands of Tropicana and Gatorade and this is just a partial list of the branded products sold by Pepsi (Pg. 69, Para 4). PepsiCo has developed liquid refreshment products that are light, calorie free, sugar free, caffeine free, sport and energy directed and flavoured (Pepsi, Aquafina, Voltage). (Pg.70, Para1). Pepsi has ventured into conglomerate diversification from van moving lines to sporting goods to fast foods. PepsiCo of late has a more focused strategy in the snack, breakfast food and non-alcoholic beverage markets (Pg. 69, Para3). Today PepsiCo is a larger and more diversifies company than Coca Cola (Pg. 78, Para 3). Coca Cola has kept a fairly narrow focus. Coca-Cola seems to be following a very concentrated strategy by focusing almost exclusively on non-alcoholic beverages with little tendency to diversify. Additional as the demand for dark colas has diminished, Coca Cola has continued to strengthen their juice, ready to drink tea and coffee products, water and sports drinks along with the introduction of Truvia as a sweetener (Pg.76, Para 2). Strong Coca Cola (25%) Financial Position PepsiCo (23%) Weak 10% 6|Page 20% U.s Market Share [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 3.2 Opportunities & Threats To choose opportunities and threats I tried to find those that were critical for company and able to give greatest impact to PepsiCo. No. 1. 2. 3. Opportunities Steady overall growth for the last five years of around 9 percent with sports drinks, bottled water, and energy drinks showing the largest growth (Pg.74, Para 4). A recent environmental campaign against plastic containers has impacted the sales of bottled water and forced manufacturers to develop more environmentally friendly containers (Pg74, Para 6). The market for these products requires manufactures to constantly develop new products to meet those changing demands (Pg74, Para 6) Opportunities O1: Steady overall growth for the last five years of around 9 percent with sports drinks, bottled water, and energy drinks showing the largest growth (Pg.74, Para 4). O2: Growth in the carbonated drink market was largest in Asia and Europe (Pg74, Para 4). O3: The market for these products requires manufactures to constantly develop new products to meet those changing demands (Pg74, Para 6) 7|Page Probability Impact Justification Almost certain Extraordinary Perform highest impact to PepsiCo in conjunction to reduction demand on carbonated drinks. Consumers start to concern more on their healthy lifestyle. Possible Moderate Likely Major Expanding business on these countries might help increase PepsiCo revenues and sales. Able to give impact on PepsiCo revenues and profits since the taste of consumers always change. [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Probability Almost certain Insignificant Low Minor Medium Moderate High Major High Extraordinary High 1 Likely Low Medium Medium High Possible Low Low Medium O2 High High Unlikely Rare Low Low Low Low Low Low Medium Medium Medium Medium O3 High No. Threats 1. The downturn in the economy has also affected the sales of colas and water as some consumers have switched to store brands and tap water as cheaper alternatives to the national brands (Pg.74, Para 6). 2. Consumer taste continues to change, and Pepsi must also continue to change (Pg 69, Para 3). In United States, the carbonated soft drinks market has shown a decline of 0.4 percent as consumers shifted from soft drinks to bottled water and sports drinks (Pg. 74, Para). 3. Fought the Cola wars, Coca Cola holds the largest share of the U.S cola market at 41 percent (Pg74, Para 5). Coca Cola is the largest producer and distributor in the world a d is PepsiCo’s major competitor (Pg. 76, Para 1). Threats T1: The downturn in the economy has also affected the sales of colas and water as some consumers have switched to store brands and tap water as cheaper alternatives to the national brands (Pg.74, Para 6). T2: Consumer taste continues to change, and Pepsi must also continue to change (Pg 69, Para 3). In United States, the carbonated soft drinks market has shown a decline of 0.4 percent as consumers shifted from soft drinks to bottled water and sports drinks (Pg. 74, Para). T3: Fought the Cola wars, 8|Page Probability Impact Likely Major Able to reduce PepsiCo sales and revenues since the consumers have an ability to switch to their national brands as well as interested more on cheaper price. Almost certain Extraordinary In order to avoid competition from other rivals and as to retain loyal consumer, the company should fast responsive to the consumer preferences. [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Coca Cola holds the largest share of the U.S cola market at 41 percent (Pg74, Para 5). Coca Cola is the largest producer and distributor in the world and is PepsiCo’s ajor competitor (Pg. 76, Para 1). Likely Probability Almost certain Likely Major Able to give major impact towards PepsiCo’s usi ess, gro th a d position in the industry since Coca Cola is the closest competitor. Coca Cola has a strong brand reputation and even posses strong financial position if compare to PepsiCo. Insignificant Low Minor Medium Consequences Moderate Major High High Low Medium Medium High T1 Possible Low Low Medium High Unlikely Rare Low Low Low Low Low Low Medium Medium 9|Page Extraordinary High T2 1 High T3 1 High Medium Medium [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 3.3 EFE matrix No. 1. 2. 3. EFE Opportunities Steady overall growth for the last five years of around 9 percent with sports drinks, bottled water, and energy drinks showing the largest growth (Pg.74, Para 4). Growth in the carbonated drink market was largest in Asia and Europe (Pg74, Para 4). The market for these products requires manufactures to constantly develop new products to meet those changing demands (Pg74, Para 6) No Threats 1. The downturn in the economy has also affected the sales of colas and water as some consumers have switched to store brands and tap water as cheaper alternatives to the national brands (Pg.74, Para 6). Consumer taste continues to change, and Pepsi must also continue to change (Pg 69, Para 3). In United States, the carbonated soft drinks market has shown a decline of 0.4 percent as consumers shifted from soft drinks to bottled water and sports drinks (Pg. 74, Para). Fought the Cola wars, Coca Cola holds the largest share of the U.S cola market at 41 percent (Pg74, Para 5). Coca Cola is the largest producer and distributor in the world and is PepsiCo’s major competitor (Pg. 76, Para 1). 2. 3. Weight Ratings Weighted score 0.18 4 0.72 0.13 3 0.39 0.17 3 0.51 0.16 3 0.48 0.20 4 0.80 0.16 3 0.48 Total 1 10 | P a g e 3.38 [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 4.0 Internal Assessment 4.1. Strengths & weaknesses In order to choose the Strengths and weaknesses, I have classified the strength level into three significant categories (Competence, Core Competence and Distinctive Competence). In this case, Distinctive Competence will be chosen for further assessment as this category shows that PepsiCo able to perform unique capabilities that distinguish the organisation from its competitors . No. 1. 2. 3. 4. 5. 6. 7. Strengths Competence Pepsi has ventured into conglomerate diversification from van moving lines to sporting goods to fast foods (Pg. 69, Para3). PepsiCo must appeal to the ultimate consumer through extensive advertising and promotional activities. This Pull marketing strategy is highly dependent on creative marketing and development of catchy slogans along with Pepsi Cola brands (Pg. 70, Para 1). PepsiCo recently offered $6billion to retake ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and Pepsi Americas(PAS) (Pg. 68, Para 5). Core Competence Bradham followed the example of Coca Cola and used the bottling franchise system in which he produced the syrup and others bottled and distributed. This business model allowed for quick expansion and market penetration (Pg.69, Para69). Pepsi and Coke become the largest worldwide producer of non-alcoholic beverages (Pg. 69, Para3) PepsiCo., I . is i deed a large o pa a d is defi ed i the K as “a leadi g glo al e erage………….. i appro i atel 200 countries with largest operations in North America (Unites States and Canada) Mexico and United Kingdom (Pg. 69, Para5) Distinctive Competence Doubled the size of its bottle to 12 ounces, charging one nickel, when the standard was 6ounces. This low- cost differentiation strategy proved very successful and become a major player in Cola industry (Pg.69, Para 2) 8. Pepsi seems to be developing synergy between product categories with breakfast foods, and non alcoholic beverage markets and at the same time moving into the water and sport beverage market.(Pg69, Para3). These combinations and promotions allow PepsiCo’s bottlers enhanced ability to gain retail shelf space (Pg. 78, Para 4). 9. Pepsi continues to expand its markets in beverage through market penetration, mergers and acquisitions (Pg. 69, Para6). Acquired Amacoco Nordeste Ltda and Amacoco Sudeste Ltda, Brazil largest makers of packaged coconut water drinks and is expanding its presence in South A eri a’s largest nation (Pg. 78, Para 6). 11 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 No. Weaknesses Highly dependent on supplies 1. of clean water (Pg.74, Para 6). 2. 3. Cost of sales has increased as would be expected, net income has decreased, return on assets has dropped , inventory turnover has decreased and long term debt has increased. The trends might indicate future problem areas.(Pg.73, Para1). Force PepsiCo to innovate new products and at the same time re-evaluate current product offerings (Pg.78, Para4). Most Incompetence Justification Compare to PepsiCo closest competitor Coca Cola, PepsiCo should be able to establish its own water sources as producing contaminated carbonated drink results to damage PepsiCo brand reputation. Most Incompetence As Coca Cola posses strong financial position, PepsiCo encountered financial problem that need to be resolved. This financial instability gives impact towards PepsiCo performance and profitability in future. Most Incompetence As meeting consumer demands is critical in this industry, innovation is the key success for PepsiCo 4.2 IFE Matrix No. 1. IFE Strengths Weight Ratings Weighted score Doubled the size of its bottle to 12 ounces, charging one nickel, when the standard was 6ounces. This low- cost differentiation strategy proved very successful and become a major player in Cola industry (Pg.69, Para 2) 0.22 4 0.88 2. Pepsi seems to be developing synergy between product categories with breakfast foods, and non alcoholic beverage markets and at the same time moving into the water and sport beverage market.(Pg69, Para3). These combinations and promotions allow PepsiCo’s bottlers enhanced ability to gain retail shelf space (Pg. 78, Para 4). 0.16 3 0.48 3. Pepsi continues to expand its markets in beverage through market penetration, mergers and acquisitions (Pg. 69, Para6). Acquired Amacoco Nordeste Ltda and Amacoco Sudeste Ltda, Brazil largest makers of packaged coconut water drinks and is expanding its presence in South America’s largest nation (Pg. 78, Para 6). 0.20 4 0.80 12 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 No. 1. Weaknesses Highly dependent on supplies of clean water (Pg.74, Para 6). 2. Cost of sales has increased as would be expected, net income has decreased, return on assets has dropped , inventory turnover has decreased and long term debt has increased. The trends might indicate future problem areas.(Pg.73, Para1). Force PepsiCo to innovate new products and at the same time re-evaluate current product offerings (Pg.78, Para4). 3. Total 0.18 1 0.18 0.12 1 0.12 0.12 2 0.24 1 2.70 4.3 Value Chain Analysis (Non-Alcoholic beverages Segment) Value Chain provides a model of how PepsiCo, makes revenue and profit from the raw materials. The facts in Value chain is the critical facts based on an internal assessment. 13 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Culture Management Pepsi’s desire to own its own bottlers is to spur its non-carbonated health and wellness products, which are often smaller volume, slower moving products (Pg. 68, Para 5). And in everything we do, we strive for honesty, fairness and integrity. At PepsiCo, we’re committed to achieving business and financial success while leaving a positive imprint on society-delivering what we call Performance with Purpose. (Pepsi Co Mission &Vision, March 2009). PepsiCo recently offered $6billion to retake ownership of its two largest bottlers, Pepsi Bottling Group (PBG) and Pepsi Americas(PAS) (Pg. 68, Para 5). Pepsi has ventured into conglomerate diversification from van moving lines to sporting goods to fast foods (Pg. 69, Para3). PepsiCo is organised using three business units of PepsiCo Americas Foods, PepsiCo America beverages and PepsiCo International. (Pg. 69, Para7). Finance First quarter 2009 PepsiCo’s net revenue of $8,263 million were down $70 million from the same quarter in 2008 (Pg.68,Para2). PepsiCo invest $1bilion in Russia over the next three years, bringing its total investment to$4billion over a ten year time span. PepsiCo will also invest over $1billion in China over the next 4 years (Pg.68, Para4) . Production PepsiCo opened a new factory in Shanghai in June 2009and plans to open another five plants in China over the next two year. The new plant will manufacture Pepsi Cola, Mountain Dew, Gatorade, Tropicana juices and bottled water. The new Pepsi plant uses 22 percent less water and 23 percent less energy than the average Pepsi plant in China (Pg.68, Para3). PepsiCo control costs by decreasing cost of goods sold by $90million (Pg.68,Para2). Initiated projects to increase recycled materials and reduce materials used in packaging (Pg.74,Para2). R&D/ MIS Raw Material The principal ingredient of its primary product is water…devel oped countries (Pg.74, Para2). 14 | P a g e Appealing Web pages with the latest ads and product-related games (Pg.70, Para2). Production/ Operation Product/ Service Marketing Distribution PepsiCo results continued the down ward trend with beverage volume down 6 percent. However international beverages volume was up 6 percent (Pg.68, Para2). Loft doubled the size of its bottle to 12 ounces, charging one nickel, when the standard was 6ounces. This lowcost differentiation strategy proved very successful (Pg.69, Para 2). Pepsi manufacture the concentrates and syrups which are then sold to bottlers ( Pg.74, Para 6). Operates in Canada, Latin America, Europe, Middle East, Asia, Northern Asia, Australia and Asia Pacific (Pg. 69, Para5). Bradham followed the example of Coca Cola and used the bottling franchise system in which he produced the syrup and others bottled and distributed (Pg.69, Para69). . The company produces Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, Dola Juices and SoBe (Pg.69, Para4). Developed liquid refreshment products that are light, calorie free, sugar free, caffeine free, sports and energy directed and flavoured (Pepsi, Voltage, Aquafina) (Pg. 70, Para1) Pepsi and Coke become the largest worldwide producer of nonalcoholic beverages (Pg. 69, Para3). PepsiCo…. in approximately 200 countries with largest operations in North America Mexico and United Kingdom (Pg. 69, Para5). PepsiCo must appeal to the ultimate customer through extensive advertising and promotional activities. This pull marketing strategy highly dependent on creative marketing and development of catchy slogans(Pg70, Para1). Uses all available media to promote its products and attempts to attract younger consumers through Web-related media such as You tube and have appealing Web pages with the latest ads and product related games (Pg.70, Para2). PBG and PAS distribute nearly 75 percent of Pepsi drinks in the United States, excluding Gatorade (Pg. 68, Para5). PepsiCo works closely with its bottlers and retailers (Pg.70,Para2). Distribute the finished products to grocery stores, convenience stores, restaurant and vending machines (Pg.74, Para6). [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Value Chain Flowchart (Non-Alcoholic beverages Segment): Products: Received Raw materials from Supplier Manufacturing Serves non-alcoholic beverage markets: Pepsi-Cola, Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, Dola Juices and SoBe projectors, Gatorade, Tropicana juices &bottled water (concentrate and syrups) (The principal ingredient is water) Marketing efforts: (Value Propositioning, brand development and management, market development, Channel management). Spent heavily on sales incentives, discounts, advertising and promotions. Works closely with bottlers and retailers in promoting and advertising its products. Creates memorable and catchy slogans to attract and hold consumers.  Customers/ Retailers Distribution (Value Delivery): (Its major customers are large retailers Wall Mart) PBG and PAS distribute nearly 75 percent of Pepsi drinks in the United States, excluding Gatorade (Pg. 68, Para5). Bottlers Distribute the finished products to grocery stores, convenience stores, restaurant and vending machines (Pg.74, Para6). Consumers Reference: Process Flow : Information and Money Flow 15 | P a g e Service: Customer liaison  Distributor liaison Product and service liability  : [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 5.0 Strategy Formulation 5.1. SWOT Matrix SWOT Matrix Opportunities 1. Steady overall growth for the last five years of around 9 percent with sports drinks, bottled water, and energy drinks showing the largest growth (Pg.74, Para 4). 2. Growth in the carbonated drink market was largest in Asia and Europe (Pg74, Para 4). 3. The market for these products requires manufactures to constantly develop new products to meet those changing demands (Pg74, Para 6) Strengths 1. Doubled the size of its bottle to 12 ounces, charging one nickel, when the standard was 6ounces. This low- cost differentiation strategy proved very successful and become a major player in Cola industry (Pg.69, Para 2) 2. Pepsi seems to be developing synergy between product categories with breakfast foods, and non alcoholic beverage markets and at the same time moving into the water and sport beverage market.(Pg69, Para3). These combinations and promotions allow PepsiCo’s bottlers enhanced ability to gain retail shelf space (Pg. 78, Para 4). 3. Pepsi continues to expand its markets in beverage through market penetration, mergers and acquisitions (Pg. 69, Para6). Acquired Amacoco Nordeste Ltda and Amacoco Sudeste Ltda, Brazil largest makers of packaged coconut water drinks and is expanding its presence in South America’s largest nation (Pg. 78, Para 6). 16 | P a g e SO Matches SO1 : Utilize Total Quality Management Practice aiming for high quality of end products by simultaneously driving down cost (S1, O1,03) SO2: Develop Innovative Customer-Oriented Product by relying on well-research customer needs to respond towards the growing demand of sports drinks, bottled water and energy drinks (S3,O1,03) Threats 1. The downturn in the economy has also affected the sales of colas and water as some consumers have switched to store brands and tap water as cheaper alternatives to the national brands (Pg.74, Para 6). 2. Consumer taste continues to change, and Pepsi must also continue to change (Pg 69, Para 3). In United States, the carbonated soft drinks market has shown a decline of 0.4 percent as consumers shifted from soft drinks to bottled water and sports drinks (Pg. 74, Para). 3. Fought the Cola wars, Coca Cola holds the largest share of the U.S cola market at 41 percent (Pg74, Para 5). Coca Cola is the largest producer and distributor in the world and is PepsiCo’s major competitor (Pg. 76, Para 1). ST Matches ST1: Innovate product line by offering healthier alternatives in order to differentiate PepsiCo from Coca Cola (S1,T3) ST2: Satisfy the buyer's requirements by offering more promotions and discounts to prevent sales from decreasing (S2,T1) [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Weaknesses 1. This company highly dependent on supplies of clean water (Pg.74, Para 6). 2. Cost of sales has increased as would be expected, net income has decreased, return on assets has dropped , inventory turnover has decreased and long term debt has increased. The trends might indicate future problem areas.(Pg.73, Para1). WO Matches Improve business sales by responding towards increasing demands for sports drinks, bottled water and energy drinks (W2,O1) Increase presence in the International market and expand Pepsi Soda product in Asia and Europe in order to improve financial stability (W2,O2) WT Matches Forecast the trends by relying on marketing intelligence and Research & Development to distinctively different from the rest of the market.(W1,W3,T3) Adjust production of bottlers with downturn in economy by utilising flexible manufacturing system to create differentiated products at low cost (W2,W3,T1) 3. Force PepsiCo to innovate new products and at the same time reevaluate current product offerings (Pg.78, Para4). SWOT conclusion: Based on the SWOT analysis the corporate level and business level strategies are as follows: Corporate Level Strategy No 1. Type of strategy Cost Leadership (Type 2) SO1 : Utilize Total Quality Management Practice aiming for high quality of end products by simultaneously driving down cost (S1, O1,03) Business Level Strategy No Type of strategy 1. Product Development SO2: Develop Innovative Customer-Oriented Product by relying on well-research customer needs to respond towards the growing demand of sports drinks, bottled water and energy drinks (S3,O1,03) *IE matrix will be used in the analysis in order to support the company strategy chosen from SWOT analysis. 17 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 5.2 IE Matrix The IFE Total Weighted Score Strong Average Weak The EFE Total Weighted Score 1.0 4.0 High 3.0 2.0 Grow and Build 3.0 Medium 2.0 Low 1.0 EFE IFE 3.38 2.70 The division falls into cell II which can be described as grow and build. Intensive strategies such as product development can be most appropriate for this division. 5.3 Strategy Formulation Conclusion IE matrix results, shows that PepsiCo should Grow and Build its position. This means intensive and aggressive tactical strategies should be done. Therefore, related strategies with grow and build (market penetration, market development, and product development) will be extracted from S/O strategies (SWOT Matrix). These alternative strategies: 18 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Original Sentences: Business Level Strategy  Cost Leadership (Type 2): SO1 : Utilize Total Quality Management Practice aiming for high quality of end products by simultaneously driving down cost (S1, O1,03) Corporate Level Strategy  Product Development: SO2: Develop Innovative CustomerOriented Product by relying on well-research customer needs to respond towards the growing demand of sports drinks, bottled water and energy drinks (S3,O1,03) 6.0 Strategy Implementation 6.1 Operation Management Process The theme of Operational Management Processes: Implement TQM practice for lowering the costs of production with better quality of produced products Produce new healthier drinks and sports drinks from well-research customer needs 6.1.1 Supply Management Process Define the objectives in Supply Processes Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Achieve Just-In-Time supplier capability Implement efficient supplier quality management 19 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Objective Balance Scorecard (BSC) Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Measure Target Price/cost of product, customer profitability 10% reduction target 5% Increase in terms of customer profitability (compare to competitor selling price) Achieve Just-In-Time supplier capability Quick response time, On-time delivery, correct quantity, Percent of late orders flexibility to respond to unexpected demand changes, willingness to participate in PepsiCo new product development 5 % Increase in terms of speeding up customer response while minimizing inventories (compare to year before) Implement efficient supplier quality management Supplier feedback survey, supplier performance survey, quality level, presence of certification/ other documentation Percent of perfect order received, percent of supplier qualified to deliver without incoming inspection Zero defect production Linkage to Production Operation Management Processes (Supply) Production Objectives Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Achieve Just-In-Time supplier capability Implement efficient supplier quality management LPCSDBW&ED LPCSDBW&ED EQCNPL Note: 1. LPCSDBW&ED = Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks 2. EQFNPL = Ensure Quality Control for New Production Line 20 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Risk Management Operation Management Processes (Supply) Risk Management Objectives Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks MSR, MTR1 Achieve Just-In-Time supplier capability MQR1, MOR1 Implement efficient supplier quality management Note MQR1 = Manage Quality Risk MTR1= Manage Technological Risk MOR1 = Manage Operational Risk MSR = Manage Supplier Risk (Supply) Linkage to Customer Perspective Operation Management Processes (Supply) Price Customer Perspective (Customer Value Proposition) Quality Availability Selection Brand OLPV IPA FOPSC ICS EQ IPA FOQSC ERBI* EQ IPR FOQSC ERBI* Objectives Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Achieve Just-In-Time supplier capability Implement efficient supplier quality 21 | P a g e LPC [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 management Note: (CVP) OLPV, IPA, FOPSC, ICS = Offer lower price with Value, Increase Product Availability, Focus on Price Sensitive Customer, Increase Customer Satisfaction LPC = Lower Production Costs FOQSC = Focus On Quality Sensitive Customer ERBI* = Enhance Reputation on Brand Image IPV = Increase Product Variety IPR = Increase product Reliability EQ = Enhance Quality *indirect objective through Customer Management processes Linkage to Financial Perspective Operation Management Processes (Supply) Objectives Financial Perspective Improve Cost Structure Increase Assets Utilization LPC Expand Revenue Opportunities Enhance Customer Value IBV DCC Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Achieve Just-In-Time supplier capability Implement efficient supplier quality management 22 | P a g e MIC TD,MROI GHS, IOM RDC, RCSE EQIM IRG LTRLT, OCC, PQP [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Note LPC = Lower Production Costs IBV = Increase Business Volume DCC = Decrease Customer Costs ISPSC = Increase Satisfaction Among Price Sensitive Customers GHS, IOM = Generate Higher Sell, Increase Operating Margin MIC = Minimum Inventory Cost TD = Timely Delivery OCC = Offer Customers Convenience PQP = Provide Quality Product MROI = Maximize Return on Investment RDC, RCSE = Reduce Defect Cost, Reduce the Cost of Supplier Errors LTR-LT = Long Term Relationship-Loyalty and Trust MSCQ = Maximize supply Chain Quality RWC= Reduce Waste Cost IRG = Increase revenue Growth (Supply) Those objectives should later be carried out to the Financial Pers. accumulatively Linkage to Learning & Growth Operation Management Processes (Supply) Learning & Growth Objectives Human Capital Information Capital Organizational Capital Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks LPST,ACBMSC DTFPI IFS Achieve Just-In-Time supplier capability LPST,ACBMSC DTFPI ECA , IFS,FQC DSK,DSM DFC,DPC,QPC IQMS,IFS, FQC Implement efficient supplier quality management 23 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Note: LPST,ACBMSC =Learning the Principles, Skills and Technologies , Adequate Communications between the Members of Supply Chain ECA,IFS, FQC = Enhance Completive Advantage, Improve Finance Situation, Foster Quality Culture DTFPI = Develop Technology for Process Improvement ESCE,QPC = Enhance Supply chain Effectiveness, Quality Policies Conformity QFD,QPC = Quality Function Deployment, Quality Policy Conformity ECA = Enhance Completive Advantage DSK,DSM = Develop Self-Knowledge, Develop Self-Motion DFC,DPC,QPC= Develop Fishbone Chart, Develop Pareto Chart, Quality Policies & Conformity IQMS,IFS,FQC,ICS = Improve Quality Management System, Improve Finance Situation, Foster Quality Culture 24 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.1.2 Production Management Process Define the objectives in Production Processes Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks (Linkage from Supply Process) Ensure Quality of Finished Product (Linkage from Supply Process) Produce Innovative products based on well-research customer needs (New Objectives) Objective Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product Produce Innovative products based on wellresearch customer needs Balance Scorecard (BSC) Measure Cost per unit of Output, Percent of operating income, Percent of cash flow improvement Target Increase 15% of company profitability (compared to year before) Percent of defect reduction Number of customer complains, Survey of customer satisfaction, Percent of shipments returned due to poor quality Percent of sales obtained from new products, Number of New Product Launches, Measure of how well the company identifies the customers’ future need Zero defect Increase sales from new products, customer needs met, customer satisfaction customer retention Linkage to Distribution Operation Management Processes (Production) Distribution Objectives Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product LCS PSDBWEDMQE Produce Innovative products based on well-research customer needs Note: LCS=lower Cost to Serve PSDBWEDMQE = Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation 25 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Risk Management Operation Management Processes (Production) Objectives Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product Produce Innovative products based on well-research customer needs Note MOR2 = Manage Operational Risk MTR2= Manage Technological Risk MFCR = Manage Forecast Cost Risk MQR2 = Manage Quality Risk 26 | P a g e Risk Management MOR2 MQR2 MFCR MTR2 (Production) [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Operation Management Processes (Production) Customer Perspective (Customer Value Proposition) Objectives Price Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product Produce Innovative products based on well-research customer needs Quality LCC Availability Selection HPA FOPSC EBV EBV, LTRCL&T EBV, LTRCL&T ORP EQP HPA,DOT FOQSC ORP ICL RRCP FOCHL Note: LCC =Lower usto er’s ost ORP = Offer Reasonable Price FOPSC = Focus on Price Sensitive Customers FOQSC = Focus on Quality Sensitive Customers FOCHL = Focus on Consumers Healthy Lifestyle EQP = Excellence Quality Product EBV = Enhance Brand Value DOT = Deliver on Time HPA = High Product Availability ICL = Increase Customer Loyalty RRCP = Rapid Respond to consumer Preferences LTR-CL&T = Long Term Relationship –Customer Loyalty & Trust * Those objectives should later be carried out to Customer Pers. Accumulatively. 27 | P a g e Brand [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Operation Management Processes (Production) Objectives Financial Perspective Improve Cost Structure Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product Produce Innovative products based on wellresearch customer needs DPC,RIC, RWC, IOI Increase Assets Utilization MROI, IPE&P Expand Revenue Opportunities ISG, IRFNPS Enhance Customer Value IRMCE ICP, ICS IRRRCP, IRCPI ICS ICP MFAU RD, RWC Note DPC, RIC, RWC, IOI = Decrease Production Costs , Reduce Incurred Cost, Increase Operating Income RD, RWC = Reduce Defects, Reduce Waste Costs MROI, IPE&P = Maximizing Return on Investment, Increase Process Efficiency &Productivity ISG = Increase Sales Growth IRMCE = Increase Revenue for Meeting Customer Expectation IRCPI = Increase Revenue for continual Product Improvement IRRRCP = Increase Revenue for Rapidly Respond to Consumer Preferences ICP = Increase Customer Profitability ICS = Increase Customer Satisfaction MFAU = Maximize fixed asset utilization IRFNPS = Increase Revenue From Number of Product Sold *Those objectives should later be carried out to the Financial Pers. Accumulatively 28 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Learning & Growth Perspective Operation Management Processes (Production) Learning & Growth Objectives Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks Ensure Quality of Finished Product Produce Innovative products based on well-research customer needs Human Capital Information Capital Organizational Capital ISTQM,CEPI, ETITQME ETIQA, DSK,DSM, PHACCPTP, PGMPTP DCS IABC DTQMC,IOE, IFS IQC, IQMS,GCA ICPI, ICSL, GMP,HACCP ICSL, ITFPI DP, FIC, CCII&C, DC-OC Note: ISTQM, CEPI, ETITQME= Improve Skills in Total Quality Management, Competence Employee in Process Improvement, Employees Training in TQM Environment IABC = Implement Activity-Based Costing DTQMC, IOE, IFS = Improve Operational Efficiency, Improve Finance Situation, Develop TQM Culture ITFPI = Improve Technology that Facilitates Product Improvement DP, FIC, CCII&C, DC-OC = Develop Patent, Foster Innovation Culture, Culture of Continuous Improvement, Innovation and Creativity, Develop Customer-Oriented Culture ETIQA, DSK, DSM = Employees Training in Quality Assurance, Develop Self-Knowledge, Develop SelfMotion ICPI, ICSL = Improve Customer Preferences Information , Improve Customer Satisfaction Level IQC, IQMS, GCA = Improve Quality Culture, Improve Quality Management System, Gain Competitive Advantage DCS = Develop Creativity Skills ICSL, ITFPI = Improve Customer Satisfaction Level, Improve Technology that Facilitates Product Improvement PHACCPTP = Provide Hazards Analysis Critical Control Points Training Program PGMPTP = Provide Good Manufacturing Practice Training Program GMP = Good Manufacturing Practices HACCP = Hazard Analysis Critical Control Points *Those Objectives should be carried out to the Learning &Growth Perspective accumulatively 29 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.1.3 Distribution Process Define the objectives in Distribution Processes Lower Cost to Serve (Linkage from Production) Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation (Linkage from Production) Responsively Delivery Capability (New Objective) Objective Lower Cost to Serve Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability Balance Scorecard (BSC) Measure *ABC cost of storage and delivery to customers, Cycle Time Percentage of shipments returned Due to poor quality, Number of items reworked Target 15 % Increase in Sales Growth, Decrease Cycle Time 5 % decrease of shipment returned, Increase quality Percent of Delivery On-Time Number of overdue deliveries, Customer Response Time Increase On-Time Delivery Linkage to Risk Management Operation Management Processes (Distribution) Objectives Lower Cost to Serve Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability Note MTR3 = Manage Technology Risk MOR3= Manage Operational Risk MDR = Manage Distribution Risk MQR3 =Manage Quality Risk Risk Management MOR3 MQR3 MDR,MTR3 (Distribution) Those objectives should later be carried out to the Risk Management as accumulative Objectives. 30 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Operation Management Processes (Distribution) Objectives Lower Cost to Serve Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability Customer Perspective (Customer Value Proposition) Price Quality Availability Selection Brand EQ HPA HPA FOPSC FOQSC, FOCHL EBI ILTBN EQ DOT DPP ILTBN Note: HPA = High Product Availability DOT = Deliver on Time EQ = Excellence Quality FOPSC = Focus on Price Sensitive Customers FOQSC = Focus on Quality Sensitive Customers FOCHL = Focus on Consumer Healthier Lifestyle BPA = Broader Range of Products ICT =Increase Customer Trust EBI = Enhance Brand Image ILTBN = Increase Loyalty to Brand Name Those objectives should later be carried out to Customer Pers. Cumulatively. 31 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Operation Management Processes (Distribution) Financial Perspective Improve Cost Structure Increase Assets Utilization Expand Revenue Opportunities Enhance Customer Value ICF,IRPSC,ISG ICP Objectives Lower Cost to Serve EVA, DCGS Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability IRMCE, IRQSC Note EVA,DCGS = Economic Value Added, Decrease Cost of Goods Sold ICF, IRPSC,DFG = Increase Cash Flow, Increase Revenue of Price Sensitive Customers, Increase Sale Growth IRQSC = Increase Revenue of Quality Sensitive Customers IRMCE = Increase Revenue for Meeting Customer Expectation IRQSC = Increase Revenue of Quality Sensitive Customers ICP = Increase Customer Profitability Those objectives should later be carried out to the Financial Pers. Cumulatively Linkage to Learning & Growth Perspective Operation Management Processes (Distribution) Human Capital Learning & Growth Information Organizational Capital Capital Objectives Lower Cost to Serve Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability MSC CEIQC CEDPI IQAP, SOCS, QPC DTFPI IFS IQMS, FQC IQMS Note CEDPI = Competence Employees in Distribution Process Improvement IFS = Improve Finance Situation MSC = Maintain Staff Competence CEIQC = Competence Employees in Quality Control IQAP, SOCS,QPC = Improvement on Quality Assurance Policies, Survey on Customer Satisfaction, Quality Policy Conformity DTFPI = Develop Technology for Process Improvement IQMS, FQC = Improve Quality Management System, Foster Quality Culture Those Objectives should be carried out to the Learning &Growth Perspective cumulatively. 32 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.1.4 Risk Management Process Define the objectives in Risk Management Processes (Importing from previous processes) Note: 1. 2. 3. 4. (Supply) MQR1 = Manage Quality Risk MOR1 = Manage Operational Risk MTR1= Manage Technological Risk MSR = Manage Supplier Risk Note: 1. 2. 3. 4. (Production) MOR2 = Manage Operational Risk MTR2= Manage Technological Risk MFCR = Manage Forecast Cost Risk MQR2 = Manage Quality Risk Note: 1. 2. 3. 4. (Distribution) MTR3 = Manage Technology Risk MOR3= Manage Operational Risk MDR = Manage Distribution Risk MQR3 = Manage Quality Risk Define the objectives in Risk Management Processes (New) MFR= Manage Financial Risk 33 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Define the objectives in Risk Management Processes 1. MOR1 = Manage Operational Risk from Supply 2. MOR2 Manage Operational Risk from Production 3. MOR3= Manage Operational Risk from Distribution 4. MQR1 = Manage Quality Risk from Supply 5. MQR2 = Manage Quality Risk from Production 6. MQR3 = Manage Quality Risk from Distribution 7. MTR1= Manage Technological Risk from Supply 8. MTR2= Manage Technological Risk from Production 9. MTR3 = Manage Technology Risk from Distribution 10. MSR = Manage Supplier Risk from Supply 11. MDR = Manage Distribution Risk from Distribution 12. MFCR = Manage Forecast Cost Risk from Production 13. MFR = Manage Financial Risk Linkages to Customer Perspective Operation management process Objectives Customer Perspective (Customer Value Proposition) Price Quality Availability Manage Operational Risk from Selection FOPSDB WED RRO P Service Partnership Brand JVP EBI Supply Manage Operational RRO P FOPSDB WED EBI FOPSDB WED EBI FOHQ SDBWED ICTL Risk from Production Manage Operational RRO P EOTD Risk from Distribution Manage EPQ Quality Risk from Supply Manage Quality Risk 34 | P a g e EPQ FOHQ SDBWED ICTL [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 from Production Manage FOHQ SDBWED EPQ Quality Risk ICTL from Distribution Manage Technological Risk from FOMTRR PSDBWE D EBI FOMTRP SDBWED EBI FOMTRP SDBWED EBI Supply Manage Technological Risk from Production Manage Technological Risk from Distribution Manage EOTD, ESD Supplier Risk ASRMFPS DBWED JVP EBI OTDSDB WED JVP ICTL from Supply Manage EOTD, ADR, HPA Distribution Risk from Distribution FOCHL EBI, ICTL FOPSC EBI Manage Forecast Cost Risk from Production Manage Financial Risk 35 | P a g e RCC [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Note RROP =Reduce The Risk of Overpaying FOHQSDBWED = Focus on High Quality Sports Drinks, Bottled Water and Energy Drinks FOPSDBWED = Focus on Production of Sports Drinks, Bottled Water and Energy Drinks FOMTRPSDBWED = Focus on Managing Technology Related to Production of Sports Drinks, Bottled Water and Energy Drinks ASRMFPSDBWED = Adequate Supply of Raw Material for Production of Sports Drinks, Bottled Water and Energy Drinks OTDSPBWED = On-Time Delivery of Sports Drinks, Bottled Water and Energy Drinks FOPSC = Focus on Price Sensitive Customers FOCHL = Focus on Consumer Healthier Lifestyle ESD = Ensure Secure Delivery EOTD = Ensure On-Time Delivery EBI = Enhance Brand Image EPQ= Excellence Product Quality ICTL = Increase Customer Trust and Loyalty RCC = Reduce Customer Cost HPA = High Product Availability ADR = Avoid Delay Risk JVP = Joint Venture Partners Those objectives should later be carried out to Customer Pers. Accumulatively. 36 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Operation management process Objectives Manage Operational Risk from Supply Manage Operational Risk from Production Manage Operational Risk from Financial Perspective Improve Cost Structure Increase Assets Utilization Expand Revenue Opportunities LIC, RSCC DOCFPSDBWED LIC, ROC, DOCFPSDB,WED Enhance Customer Value ICVTROC MFAU IBV, ICP IMS LIC, DOCFPSDBWED ICVTROC, SPSC ICVTROC Distribution IRTHQP ICSL, SQSC IRTHQP ICSL, SQSC IRTHQP ICSL, SQSC LIC IRTHTD OCC RSCC IRFNC Manage Quality Risk from Supply Manage Quality Risk from Production Manage Quality Risk from Distribution Manage RSCC Technological Risk from Supply Manage Technological Risk from Production Manage Technological Risk from Distribution Manage Supplier LIC Risk from Supply Manage Distribution LIC OCC Risk from Distribution Manage Forecast IRFMCD ICLL IBV, IMS, ICP SPSC Cost Risk from Production Manage Financial Risk 37 | P a g e LIC, IROI [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Note: LIC = Less Incurred Cost ROC = Reduce Operating Costs RSCC = Reduce Supply Chain Costs MFAU = Maximize fixed asset utilization ICP = Improve Company Profitability IRTHTD = Increase Revenue through High Technology Distribution ICVTROC = Improve Customer Value Through Reduction of Operational Cost SPSC = Satisfy Price Sensitive Customers SQSC = Satisfy Quality Sensitive Customers IRTHQP = Increase Revenue Through High Quality Product IRFMCD = Increase Revenue for Meeting Customer Demands DOCFPSDBWED = Decrease Operational Costs from Production of Sports Drinks, Bottled Water and Energy Drinks IBV = Increase Business Volume ICSL = Increase Customer Satisfaction Level ICLL = Increase Customer Loyalty Level OCC = Offer Customers Convenience IMS = Increase Market Share IROI = Increase Return On Investment Linkage to Learning &Growth Perspective Operation management process Objectives Learning & Growth Human Capital Information Capital Organizational Capital Manage PETQMTR, DCE ESC, IKS, ISCS DTQMC ,IOE, IKM PETQMTR, DCE, PHACCPTP, PGMPTP IKS, GMP, HACCP DTQMC,IOE, IKM PETQMTP ,DCE IKS DTQMC , IOE, IKM DEKOQMS, PETQMTP, PHACCPTP, PGMPTP DEKOQMS, PETQMTP, PHACCPTP, PGMPTP ESC, IKS, GMP, HACCP DTQMC , IKM IKS, GMP, HACCP DTQMC, IKM DEKOQMS, PETQMTP, PHACCPTP, IKS, IDP, GMP, HACCP DTQMC, IKM Operational Risk from Supply Manage Operational Risk from Production Manage Operational Risk from Distribution Manage Quality Risk from Supply Manage Quality Risk from Production Manage Quality Risk from 38 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Distribution PGMPTP Manage PETTMT ESC, IKS IKM PETTMT IKS IKM PETTMT IKS, IDP IDP, IKM IKS, ISCS IKM IKS, IDP IKM DCE RDTNP DC-OC, IKM RCE IKMS EPRBE Technological Risk from Supply Manage Technological Risk from Production Manage Technological Risk from Distribution Manage Supplier Risk from Supply Manage Distribution Risk from Distribution Manage Forecast Cost Risk from Production Manage Financial Risk Note: DEKOQMS = Develop Employees Knowledge on Quality Management System PETQMTP = Provide Essential Total Quality Management Training Program PETFTH = Provide Extensive Training to Manage Technology PHACCPTP = Provide Hazards Analysis Critical Control Points Training Program PGMPTP = Provide Good Manufacturing Practice Training Program ESC = Enhance Supply Chain DTQMC = Develop TQM Culture DC-OC = Develop Customer –Oriented Culture IKS = Increase Knowledge Sharing IKM = Improve Knowledge Management IOE = Improve Operation Efficiency IDP = Improve Distribution Process RDTNP = Reduce Development Time of New Products RCE = Retain Competence Employees ISCS = Improve Supply Chain System EPRBE = Enhance Performance Retain Better Employees IKMS = Improve Knowledge Management System GMP = Good Manufacturing Practice HACCP = Hazard Analysis Critical Control Points 39 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Summarizing the objectives Operation Management Processes No Operation Management Processes Objectives Measure Target 1 10% reduction Reduce the cost of ownership for raw materials of sports drinks, bottled water and energy drinks Price/cost of product, Customer Profitability target (ideal standard) 5% Increase in terms of customer profitability (compare to competitor selling Supply price) 2 Achieve Just-In-Time supplier capability Quick response time, On-time delivery, correct quantity, Percent of late orders flexibility to respond to unexpected demand changes, willingness to participate in PepsiCo new product development 5 % Increase in terms of speeding up customer response while minimizing inventories (compare to year before) 3 Implement efficient supplier quality management 5 Lower Production Costs of Sports Drinks, Bottled Water & Energy Drinks 7 Operation and Production Ensure Quality of Finished Product Supplier feedback survey, supplier performance survey, quality level, presence of certification/ other documentation Percent of perfect order received, percent of supplier qualified to deliver without incoming inspection Cost per unit of Output, Percent of operating income, Percent of cash flow improvement Percent of defect reduction Number of customer complains, Survey of customer satisfaction, Percent of shipments returned due to poor quality 8 Produce Innovative products based on well-research customer needs 40 | P a g e Percent of sales obtained from new products, Number of New Product Launches, Measure of how well the Zero Defect Production Increase 15% of company profitability (compared to year before) Zero defect Increase sales from new products, customer needs met, customer satisfaction [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Lower Cost to Serve 9 company identifies the customers’ future need customer retention *ABC cost of storage and delivery to customers, Cycle Time 15 % Increase in Sales Growth, Decrease Cycle Time 5 % decrease of shipment returned, Increase quality Distribution Production of Sports Drinks, Bottled Water and Energy Drinks Meet Quality Expectation Responsively Delivery Capability 10 11 Percentage of shipments returned Due to poor quality, Number of items reworked Percent of Delivery On-Time Number of overdue deliveries, Customer Response Time, Customer loyalty level Increase On-Time Delivery , 5 % Increase in terms of customer retention level (compare to year before Summarizing the objectives Operation Management Processes Linkages No Processes Objectives Measure Target Percent of supply chain target cost achieved 10% cost reduction target (ideal standard) 15% increase in terms of PepsiCo market share 5% Increase in terms of customer profitability (compare to competitor selling price) 5% Increase in terms of customer profitability (compare to competitor selling price 15% increase in terms of PepsiCo market share 1 SUPPLY: Lower Production Costs 2 Increase Business Volume Company market share 3 Decrease Customer Costs Customer cost ratio 4 Increase Satisfaction Among Price Sensitive Customers Customer profitability 5 Generate Higher Sell, Increase Operating Margin Customer growth, Profitability 6 7 Minimum Inventory Cost Timely Delivery 8 19 Offer Customers Convenience Provide Quality Product Financial Perspective PRODUCTION: 41 | P a g e Ordering Relative Response Time, time-based measures Customer feedback survey Quality-oriented measure, defect rates Met customers’ Needs [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 10 Decrease Production Costs , Reduce Incurred Cost, Increase Operating Income Cost per unit of sport drinks production, Cost per unit of bottled water production, cost per unit of energy drinks production, Non value-added costs Percent of target cost achieved, Manufacturing cost, warehousing cost, Number of defect produced, Supply Chain cost of ownership Quality-oriented measures 11 Reduce Defects, Reduce Waste Costs 12 13 Maximize supply Chain Quality Maximizing Return on Investment, Increase Process Efficiency &Productivity 14 Increase Sales Growth Customer growth, Profitability 15 Increase Revenue for Meeting Customer Expectation Customer growth, Profitability 16 Increase Revenue for continual Product Improvement Customer growth, Profitability 17 Increase Revenue for Rapidly Respond to Consumer Preferences Customer growth, Profitability 18 Increase Customer Profitability Customer profitability ratio 19 Increase Customer Satisfaction Customer satisfaction Level, CVR 20 Maximize fixed asset utilization Return on supply chain assets 21 DISTRIBUTION: Economic Value Added, Decrease Cost of Goods Sold Increase Cash Flow, Increase Revenue of 22 42 | P a g e Profit margin, supply chain cycle efficiency Customer Value Ratio, transportation cost, Profit margin 10% cost reduction target (ideal standard) Zero defects Customer margins earned should increase as the length of the relationship increase Sales growth Increase to 15%, The sales for any one customer should steadily increase each year Increase 15% of company profitability (compared to year before) Increase 15% of company profitability (compared to year before) Increase 15% of company profitability (compared to year before) 5 % Increase in terms of speeding up customer response while minimizing inventories (compare to year before) 5 % Increase in terms of customer satisfaction level (compare to year before) 10 % increase in efficiently use of its assets [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Price Sensitive Customers Increase Sales Growth 23 Customer growth for sports drinks, bottled water and energy drinks, Profitability 24 Increase Revenue Customers Sensitive Customer growth, Profitability 25 Increase Revenue for Meeting Customer Expectation Customer growth, Profitability 26 Increase Revenue Customers Customer growth, Profitability of of Quality Quality Sensitive 27 SUPPLY: Offer lower price with Value, Increase Product Availability, Focus on Price Sensitive Customer, Increase Customer Satisfaction 28 Lower Production Costs Customer Value Ratio, Percent of target cost achieved Sales growth Increase to 15%, The sales for any one customer should steadily increase each year Each new customers added should be profitable Each new customers added should be profitable Each new customers added should be profitable 5% Increase in terms of customer profitability (compare to competitor selling price) 10% cost reduction target (ideal standard) 29 Focus On Quality Sensitive Customer 30 Enhance Reputation on Brand Image 31 32 33 Customer Perspective Increase Product Variety Increase product Reliability Enhance Quality 34 PRODUCTION: Lower customer’s cost 35 Offer Reasonable Price 36 Focus on Price Sensitive Customers 43 | P a g e Measure of customer satisfaction level on product quality Measure of customer perception in terms of Number of defect Zero defects Quality-oriented measures Non value-added costs, , cost per unit of production Customer profitability ratio Measure of consumer satisfaction in terms of selling price of energy drinks, bottled water and sports drinks 5% Increase in terms of customer profitability (compare to competitor selling price) 5% Increase in terms of customer profitability (compare to competitor selling price) 5% Increase in terms of customer profitability (compare to competitor selling price [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 37 Focus on Quality Sensitive Customers 38 Focus on Consumers Healthy Lifestyle 39 Excellence Quality Product 40 Enhance Brand Value 41 Deliver on Time 42 43 High Product Availability Increase Customer Loyalty 44 Rapid Respond to consumer Preferences 45 Long Term Relationship –Customer Loyalty & Trust Measure of consumer acceptance on quality of sport drinks, bottled water and energy drinks produced Customer Perception of Flexible Response, Measure of consumer acceptance on sports drinks, bottled water and energy drinks produced Quality product checklist 5 % Increase in terms of customer satisfaction level (compare to year before) Measure of customer perception on PepsiCo brand image of healthier drinks Relative Customer Order Response Time Number of product delayed Measure of customer loyalty level Customer Perception of Flexible Response Customer feels free to make customized choices Measure of customer loyalty level 46 DISTRIBUTION : High Product Availability 47 Deliver on Time 48 Excellence Quality 49 Focus on Price Sensitive Customers 50 Focus on Quality Sensitive Customers Measure of quality survey 51 Focus on Consumer Healthier Lifestyle Measure of consumer acceptance on sport drinks, bottled water and energy drinks 52 Broader Range of Products 53 Increase Customer Trust 44 | P a g e Customer feels free to make customized choices Number of Customer Contact Points On-Time Delivery as defined by customers, Relative Customer Order Response Time Quality survey , measure customer retention level Measure of customer satisfaction level in terms of selling price Measure of customer retention level, Number of new products produced Measures for warranty, defects and returns 5 % Increase in terms of customer retention level (compare to year before 5 % Increase in terms of customer satisfaction level (compare to year before) 5 % Increase in terms of customer satisfaction level (compare to year before) 5 % Increase in terms of customer satisfaction level (compare to year before 5 % Increase in terms of customer retention level (compare to year before 5 % Increase in terms of customer retention level [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 54 Enhance Brand Image 55 Increase Loyalty to Brand Name 56 SUPPLY: Learning the Principles, Skills and Technologies ,Adequate Communications between the Members of Supply Chain 57 Enhance Completive Advantage, Improve Finance Situation, Foster Quality Culture Measure on customer retention level for brand image, Measure of customer perception on PepsiCo brand image of healthier drinks. Measure of customer loyalty level Percent of employees trained supply chain management techniques, The number of shared data sets relative to total data sets Measure of financial improvement (compare to year before 5 % Increase in terms of customer retention level (compare to year before 5 % Increase in terms of customer retention level (compare to year before Zero defect, reduce waste, cut cost 10% cost reduction target (ideal standard) , Learning & Growth perspective cost-centric culture 58 Develop Technology for Process Improvement Process improvement rate, Efficiency Rate 59 Enhance Supply chain Effectiveness, Quality Policies Conformity Quality-oriented measures 60 Quality Function Deployment, Quality Policy Conformity Forecast errors 61 Enhance Completive Advantage 62 Develop Self-Knowledge, Develop SelfMotion 63 Develop Fishbone Chart, Develop Pareto Chart, Quality Policies & Conformity Forecast errors 64 Improve Quality Management System, Improve Finance Situation, Foster Quality Culture Quality Control & Assurance checklists, quality- Oriented measure 65 66 PRODUCTION: Improve Skills in Total Quality Management, Competence Employee in Process Improvement, Employees Training in TQM Environment Implement Activity-Based Costing 67 68 Improve Operational Efficiency, Improve Finance Situation, Develop TQM Culture 69 Improve Technology that Facilitates Product Improvement 70 Develop Patent, Foster Innovation Culture, Culture of Continuous Improvement, 45 | P a g e Quality Control & Assurance checklists, quality- Oriented measure Self-Assessments In house Training Hours, Percent of employees trained quality management techniques, process improvement rate Activity-base-cost Production Schedule Percentage of sales from new products, process improvement rate Product Finalization Point, Product Category Commitment Ratio, Demand Continuous Innovation & learning Continuous Innovation & learning Continuous Innovation & learning Met Customer’s Needs Continuous Innovation & learning Met Customer’s Needs Continuous Innovation & learning Continuous Innovation & learning 10% cost reduction target (ideal standard), cost-centric culture Continuous Innovation & learning Continuous Innovation & learning To push sports drinks, bottled water and [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 71 72 73 74 Innovation and Creativity, Develop Customer-Oriented Culture Forecast for Healthier drinks Employees Training in Quality Assurance, Develop Self-Knowledge, Develop SelfMotion Improve Customer Preferences Information , Improve Customer Satisfaction Level In house Training Hours, Percent of employees trained quality management techniques Forecast Errors, customers survey Improve Quality Culture, Improve Quality Management System, Gain Competitive Advantage Develop Creativity Skills Human resource management measure, quality- Oriented measure Self-Assessment 75 Improve Customer Satisfaction Level, Improve Technology that Facilitates Product Improvement 76 Provide Hazards Analysis Critical Control Points Training Program In house Training Hours, Percent of employees trained HACCP procedures 77 Provide Good Manufacturing Practice Training Program 78 Good Manufacturing Practices In house Training Hours, Percent of employees trained GMP procedures Certification 79 Hazard Analysis Critical Control Points Performance trajectories of competing Technologies Certification energy drinks produced as close to the final customer in an effort to reduce inventories and minimize the risk of unsold product. Continuous Innovation & learning Met Customer’s Needs Continuous Innovation & learning Continuous Innovation & learning Assess which emerging technologies may become a threat to PepsiCo Operation HACCP Certification for production of energy drinks, bottled water and sports drinks. GMP Certification for production of energy drinks, bottled water and sports drinks HACCP Certification for production of energy drinks, bottled water and sports drinks DISTRIBUTION: 80 Economic Value Added, Decrease Cost of Goods Sold 81 Increase Cash Flow, Increase Revenue of Price Sensitive Customers, Increase Sale Growth 82 Increase Revenue Customers 46 | P a g e of Quality Sensitive Customer Value Ratio , The number of shared data sets relative to total data sets Point-of-sale data for sports drinks, bottled water and energy drinks Customer growth, Profitability Zero duplication, zero waste & respond flexibly to customers Increase 15% of company profitability (compared to year before) Each new customers added should be profitable [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 83 Increase Revenue for Meeting Customer Expectation 84 Increase Customer Profitability Number of Advance shipping Notices for sport drinks, bottled water and energy drinks. Customer Profitability Ratio Met Customer’s Needs 5% Increase in terms of customer profitability (compare to competitor selling price) 6.2 Customer Management Process The Theme of Customer Management Processes: Focus on Managing Customer Relationship with Continuous Product Innovation by relying on Well-Research Customer Providing High Quality and Low Price Product Offering to Respond towards the Growing Demand of Sports Drinks, Bottled Water and Energy Drinks 6.2.1 Customer Selection Process Define the objectives in Customer Selection Processes Understand Customer Segments Screen unprofitable customers Target High-Value Customers Objective Understand Customer Segments Balance Scorecard (BSC) Measure Target Profit contribution by segment Increase 15% of company profitability (compared to year before) Screen unprofitable customers Target High-Value Customers Percent of unprofitable customers Number of Strategic accounts 20% reduce in screening unprofitable customers 20% Increase in terms of strategic accounts number Allocate 10 percent marketing resources to active sports minded and health Conscious customer segments 47 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Acquisition Customer management processes (Selection) Objectives Understand Customer Segments Screen unprofitable customers Target High-Value Customers Customer Acquisition CVPQSDBWEDP CMMPSC,ASM&HCCS ANC Note: CVPSDBWED = Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products CMMPSC,ASM&HCCS = Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment ANC = Acquire New Customers Linkage to Customer Retention Customer management processes (Selection) Objectives Understand Customer Segments Screen unprofitable customers Target High-Value Customers Customer Retention PSE CV-P Note: PPCS = Provide Excellence Service CV-AP = Create value-added Partnership Linkage to Customer Growth Customer management processes (Selection) Objectives Understand Customer Segments Screen unprofitable customers Target High-Value Customers Note: 1.C-SC = Cross-Sell Customers 2. PWC = Partner with customers 48 | P a g e Customer Growth C-SC PWC [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Customer management processes (Selection) Objectives Understand Customer Segments Screen unprofitable customers Target High-Value Customers Financial Perspective Improve Cost Structure LCSPSC Increase Assets Utilization IRFPC IRPC IRPC Note: LCSPSC = Lower Cost Satisfying Price Sensitive Customer CNSRFNC = Create New Source of Revenue from New Customers ICP = Increase Customer Profitability IRFPC = Increase Revenue from Profitable Customers IRFHVC = Increase Revenue from High Value customers IRPC = Increase Revenue Per Customer 49 | P a g e Expand Revenue Opp CNSRFNC IRFHVC Enhance Cust Value ICP [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Customer management processes (Selection) Objectives Customer Perspective Price Quality Availability Selection Functionality Service LPCC EQ HASDBWED EFH&ED C-OP BONOTG Screen unprofitable customers EQ HASDBWED EFH&ED C-OP BONOTG Target High-Value Customers EQ HASDBWED HPSC, FOQSC, FOASM, HCC HPSC, FOQSC, FOASM, HCC HPSC, FOQSC, FOASM, HCC EFH&ED C-OP BONOTG Understand Customer Segments Partnership IBI DC-RP Note: LPCC = Lower Price Compare to Competitor HPSC, FOQSC, FOASM,HCC = Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers HASDBWED = High Availability of Sports Drinks, Bottled Water and Energy Drinks Products BONOTG = Based on needs of Target Group EQ = Enhance Quality EFH&ED, C-OP = Essential for health & Energetic Drinks, Customer-Oriented Products DZPDTC= Deliver Zero Product Defect to Customers PAVP = Perform Attractive Value Proposition IBI = Increase Brand Image IBV = Increase Brand Value DC-RP = Develop Community Researcher Partnership 50 | P a g e Brand IBV [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Learning and Growth Customer management processes (Selection) Objectives Understand Customer Segments Screen unprofitable customers Target High-Value Customers Learning and Growth Human Capital SSICS, RCE&N PGSPHVC Information Capital MR, DPCMI&DS EECAM&CSATS MR, IKS Organization Capital C-OC, PIC, CRM, RTIE RVC, IKS, DSCRMP PIC, CRM CRM Note: SSICS, RCE&N = Strategic Skills In Customer Segmentation, Research on Customer Expectation & Needs MR, DPCMI&DS, EECAM&CSATS = Market Research, Develop Portfolio of Customer Management Information & Data System, Establishing Effective Communication among Marketing& Customer Service about the Segmentation CO-C, PIC,CRM, RTIE = Customer-Oriented Culture, Positive Internal Culture , Customer Relationship Management, Respond to the Information Effectively MR, IKS, DSCRMP = Market Research, Increase Knowledge Sharing, Develop Strategic CRM Portfolio PGSPHVC = Particular Group Serve Particular High-Value Customers RVC, IKS= Records of Valued Customers, Increase Knowledge Sharing, PIC, CRM = Positive Internal Culture, Customer Relationship Management 51 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.2.2 Customer Acquisition Process Define the objectives in Customer Acquisition Processes Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products (linkage from Selection Process) Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment (linkage from Selection Process) Acquire New Customers (linkage from Selection Process) Develop Relationship with Dealer/distributor (New Objective) Objective Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers Develop Relationship with Dealer/distributor 52 | P a g e Balance Scorecard (BSC) Measure Target Brand awareness for sports drinks, bottled water and energy drinks 15 percent Increase in terms of (survey) Brand awareness Customer respond rate to campaigns, number of customer using promotions to sample the products Market share, Cost per new customer acquired, measure of customer lifetime value of new customers acquired Dealer feedback, dealer performance Allocate 15 percent marketing resources to active sports minded and health Conscious customer segments 15% increase in terms of PepsiCo market share 5% Increase in terms of respond to dealer feedback [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Retention Customer management processes (Acquisition) Objectives Customer Retention Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers Develop Relationship with Dealer/distributor PPCSPCSDBWED CHLC CHLC Note: PPCSPCSDBWED = Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks CHLC = Create Highly Loyal Customers Linkage to Customer Growth Customer management processes (Acquisition) Objectives Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers Develop Relationship with Dealer/distributor Customer Growth CI&H-IVP Note: CHI&H-IVP = Creating Innovative & High-Impact Value Propositions MSRB = Premium Price Customer Service ICSL = Increase Customer Satisfaction Level 53 | P a g e PPCS ICSL [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Customer management processes (Acquisition) Objectives Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers Develop Relationship with Dealer/distributor Financial Perspective Improve Cost Structure ISP Expand Revenue Opp. CNSORFNP Enhance Cust. Value ICP ISP CNSORFNP ICP ISP ISP CNSORFNC IBV CLTSV Note: CNSORFNC =Create New Sources Revenue from New Customer CNSORFNP = Create New Sources of Revenue from New Products ISP = Improve sales productivity ICP = Increase Customer Profitability IBV = Increased business volume CLTSV = Creating Long Term Shareholder Value *Customer management process (acquisition) is directly linked with expand revenue opportunity and enhance customer value. However, considering communicating proposition value, customised mass marketing, acquiring new customers , and developing relationship with dealer ; would also have indirect link with Improve Cost Structure through reduction in operating costs. 54 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Customer Customer Perspective management processes (Acquisition) Objectives Price Quality Availability Selection Service Partnership Brand HPSC, HASDBWED Communicate LPCC EQ ICA IBA FOQSC, Value Proposition FOASM,HCC for a quality Sport Drinks, Bottled Water and Energy Drinks Products HPSC, HASDBWED Customize Mass LPCC EQ ICA IBA FOQSC, Marketing to Price FOASM,HCC Sensitive customers, Active Sports Minded and Health Conscious Customer Segment HPSC, HASDBWED Acquire New EQ DPM ICA IBA FOQSC, Customers FOASM,HCC Develop Relationship with Dealer/distributor EQ RRCF DGU&EC IBA Note: LPCC = Lower Price Compare to Competitor HASDBWED = High Availability of Sports Drinks, Bottled Water and Energy Drinks Products EQ = Excellence Quality HPSC, FOQSC, FOASM,HCC = Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers RRCF = Rapidly Response to Customer Feedbacks DPM = Direct Purchasing Method ICA = Increase Customer Awareness IBA = Increase Brand Awareness DGU&EC = Demonstrate Great Understanding and Efficient Communication *Customer management process (acquisition) is directly linked with service, partnership and brand. However, considering Communicating Value Proposition, Customising Mass Marketing, Acquiring New Customers and Developing Relationship with Customer ; from customer perspective would also have indirect link with price, quality, availability and selection. 55 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Learning and Growth Customer management processes (Acquisition) Objectives Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers Develop Relationship with Dealer/distributor Learning and Growth Human Capital DSC Information Capital CD&TK Organization Capital C-OC, PIC, CRM, DMEL&TD IKS IKMC DEM&T ITPM&ST DPCMI&DS DPCMI&DS CRM PIC, CRM Note: DSC = Develop Strategi Competencies DEL& TD= Develop Marketing Effective leader & Teamwork Depth DEM&T =Develop Extensive Marketing & Sales Training CD&TK = Continually Develop & Transfer Knowledge C-OC, PIC,CRM = Customer-Oriented Culture, Positive Internal Culture, Customer Relationship Management DPCMI&DS = Develop Portfolio of Customer Management Information & Data System ITPM&ST= Interactive training programs for Management and Sales Teams IKS = Increase Knowledge Sharing IKMC = Increase Knowledge Management Culture 56 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.2.3 Customer Retention Process Define the objectives in Customer Retention Processes Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks (Linkage from Customer Acquisition Process) Create Highly Loyal Customers (Linkage from Customer Acquisition Process) Create Lifetime Customers (New Objectives) Objective Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Create Highly Loyal Customers Balance Scorecard (BSC) Measure Target Number of Premium Customers, quality rating from premium 20 percent increase of premium customers customers Percent captured of customers’ spending in sports drinks, Bottled water and Energy Drinks 20 percent Increase in creating Highly Loyal customers Customer Lifetime Value Increase 15 percent of company profitability (compared to year before) Create Lifetime Customers Linkage to Customer Growth Customer management processes (Retention) Objectives Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Create Highly Loyal Customers Create Lifetime Customers Note: ROSP = Retention-Oriented Sales Promotion C-SC = Cross-Sell Customers PWC = Partner with Customers 57 | P a g e Customer Growth ROSP C-SC PWC [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Financial Perspective Customer management processes (Retention) Objectives Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Create Highly Loyal Customers Create Lifetime Customers Financial Perspective Improve Cost Structure ISP Increase Assets Utilization IASEC, MFAU Expand Revenue Opp. LRTCOP Enhance Cust. Value ICP LCMCOT LCMCOT MFAU IBV PLTVTPFNP ICP Note: LCMCOT = Lower Customer Management Cost Over Time ISP = Improve sales Productivity IASEC, MFAU = Increase Account Share with Existing Customers, Maximize Fixed Assets Utilisation IBV = Increase Business Volume LRTCOP = Less Responsive To Competitors Offered Price PLTVTPFNP =Prediction of Lifetime Value to predict Future Net Profit ICP, LCC = Increase Customer Profitability 58 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Customer management processes (Retention) Objectives Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Create Highly Loyal Customers Create Lifetime Customers Customer Perspective Price Quality Availability Selection Functionality Service Partnershi p Brand EQ HASDB WED PCO SDBW EDP EFH&ED FSR ICS IBI&R LPCC EQ HASDB WED EFH&ED ECPS, ZDDTC MER ICL LPCC EQ HASDB WED HPSC, FOQS C, FOAS M,HCC HPSC, FOQS C, FOAS M,HCC EFH&ED ECPS, ZDDTC MER IBI&R Note: LPCC = Lower Price Compare to Competitor EQ = Excellence Quality MER = Maintain Excellence Relationship ICLT= Increase Customer Loyalty IBI&R = Increase Brand Image & Reputation EFH&ED = Essential for health & Energetic Drinks HASDBWED = High Availability of Sports Drinks, Bottled Water and Energy Drinks Products EQ = Excellence Quality ZDDTC = Zero Defects Delivery to Customers PCO SDBWEDP = Premium Customers of Drinks, Bottled Water and Energy Drinks Products HPSC, FOQSC, FOASM,HCC = Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers FSR = Fast Service Responsiveness ICS = Increase Customer Satisfaction ECPS = Ensure of Constant Product Supply *Customer management process (retention) is directly linked with service, partnership and brand. However, providing premium customer service, creating loyal customers and creating lifetime customers; would also have indirect link with price, quality, functionality, availability and selection. 59 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Learning and Growth Customer management processes (Retention) Objectives Learning and Growth Human Capital Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Create Highly Loyal Customers Create Lifetime Customers PCE CPGA ARTT Information Capital RPC CFOPI, IKS CFIOI Organization Capital CC-FC CRM,CIC, KMS,QMS CC-FC Note: RVSC = Records of Premium Customers CPGA = Create Personel Goal Alignment PCE = Personnel Commitments and Efforts ARTT = Attract and Retain Top Talent CFOPI, IKS = Customer Feedback on Product Improvement, Increase Knowledge Sharing CRM, CIC, KMS, QMS= Customer Relationship Management, Continuous Improvement Culture , Knowledge Management System, Quality Management System CC-FC = Create Customer Focus - Culture 60 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 6.2.4 Customer Growth Process Define the objectives in Customer Growth Processes Retention-Oriented Sales Promotion (Linkage from Retention Process) Cross-Sell Customers (Linkage from Retention Process) Partner with Customers (Linkage from Retention Process) Customer Education for Healthier and Energetic drinks (New Objective ) Objective Retention-Oriented Sales Promotion Cross-Sell Customers Partner with Customers Balance Scorecard (BSC) Measure Target Over 95 percent of the population use the Number of promotion sample of promotion sample sports drinks, bottled water and energy drinks used by customer Number of products per customer Target for sports drinks, bottled water and energy drinks per customer Increase 15% of company profitability Number or gain sharing agreement Customer Education for Healthier and Energetic drinks Hours with customers (compared to year before) Allocate 2 hours per each new customer to educate them understand the nutritious value of PepsiCo healthier drinks Linkage to Financial Perspective Customer management processes (Growth) Objectives Retention-Oriented Sales Promotion Cross-Sell Customers Partner with Customers Customer Education for Healthier and Energetic drinks Financial Perspective Improve Cost Structure ISP Increase Assets Utilization IASEC, MUEFA Expand Revenue Opp. IRPC Enhance Cust. Value ICP LCMCOT LCMCOT IASEC, MUEFA IBV IBV IRPC DCC PLCSTCP IASEC Note: LCMCOT = Lower Customer Management Cost Over Time IRPC = Increase Revenuer Per Customer ISP = Improve Sales Productivity IASEC, MUEFA = Increase Account Share with Existing Customers, Maximise Use of Existing Fixed Assets IBV = Increase Business Volume ICP = Increase Customer Profitability DCC =Decrease Customer Costs PLCSTCP = Pro idi g Lo er Cost Solutio s To Custo ers’ Pro le s 61 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Customer Perspective Customer management processes (Growth) Objectives Customer Perspective Price Quality Availability Selection Functionality Service RetentionOriented Sales Promotion Cross-Sell Customers LPCC EQ HASDBWED PCOSDBWEDP EFH&ED LCC RIIBV LPCC EQ HASDBWED EFH&ED HLCS RIIBV Partner with Customers LPCC HPSC, FOQSC, FOASM,HCC HPSC, FOQSC, FOASM,HCC HPSC, FOQSC, FOASM,HCC EFH&ED HLCS Customer Education for Healthier and Energetic drinks HASDBWED EFH&ED HLCS Partnership Brand RIIBV MEC&R, ICL MEC&R RIIBV Note: LPCC = Lower Price Compare to Competitor EQ = Excellence Quality RIIBV = Rapid Increase In Brand Value LCC = Loyalty Club Card HASDBWED = High Availability of Sports Drinks, Bottled Water and Energy Drinks Products MEC&R ,ICL= Maintain Excellence Communication and Relationship , Increase Customer Loyalty ECPS = Ensure of Constant Product Supply PCOSDBWEDP = Premium Customers of Drinks, Bottled Water and Energy Drinks Products HLCS = High Level of Customer Service HPSC, FOQSC, FOASM,HCC = Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers EFH&ED = Essential for health & Energetic Drinks 62 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Linkage to Learning and Growth Customer management processes (Growth) Objectives Retention-Oriented Sales Promotion Cross-Sell Customers Partner with Customers Customer Education for Healthier and Energetic drinks Learning and Growth Human Capital DSCSP Information Capital RPCSDBWED Organization Capital CC-CC, DSCSP , PCE PCE A&RTT EUOKMS EUKMS, CRMP IKSFBP,EUKMS ICRBI, HQ&HC CC-CC, CRM RSWP, KMS Note: DSCSP = Develop Strategic Competencies in Sales and Promotion PCE = Personnel Commitments and Efforts RPCSDBWED = Record of Premium Customer for Sports Drinks, Bottled Water and Energy Drinks IKSFBP, EUKMS = Increase Knowledge Sharing for Best Practices, Extent Usage of Knowledge Management System EUKMS, CRMP = Extent Usage of Knowledge Management System, Customer Relationship Management Portfolio CC-CC, CRM = Create a Customer Centric Culture, Customer Relationship Management ICRBI, HQ&HC = Improve Company Reputation and Brand Image, High Quality & Healthy Culture A&RTT = Attract & Retain Top Talent RSWP, KMS = Rewarding Staff with Performance, Knowledge Management Systems 63 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Summarizing the objectives Customer Management Processes No Customer Management Processes Objectives Measure Target Profit contribution by segment Increase 15% of 1 Understand Customer Segments company profitability (compared to year before) 2 Selection 20% reduce in screening unprofitable customers Number of Strategic accounts 20% Increase in terms of strategic accounts number Screen unprofitable customers 3 Target High-Value Customers Communicate Value Proposition for a quality Sport Drinks, Bottled Water and Energy Drinks Products 4 Percent of unprofitable customers Brand awareness for sports drinks, bottled water and energy drinks (survey) 15 percent Increase in terms of Brand awareness 5 Acquisition Customize Mass Marketing to Price Sensitive customers, Active Sports Minded and Health Conscious Customer Segment Acquire New Customers 6 Develop Relationship with Dealer/distributor 7 Retention 8 9 64 | P a g e Customer respond rate to campaigns, number of customer using promotions to sample the products Market share, Cost per new customer acquired, measure of customer lifetime value of new customers acquired Dealer feedback, dealer performance Provide Premium Customer Service For Premium Customer of Sports Drinks, Bottled Water and Energy Drinks Number of Premium Customers, quality rating from premium customers Create Highly Loyal Customers Percent captured of customers’ spending in sports drinks, Bottled water and Energy Drinks Create Lifetime Customers Allocate 15 percent marketing resources to active sports minded and health Conscious customer segments 15% increase in terms of PepsiCo market share 5% Increase in terms of respond to dealer feedback 20 percent increase of premium customers Customer Lifetime Value 20 percent Increase in creating Highly Loyal customers Increase 15 percent of [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 10 Retention-Oriented Sales Promotion Number of promotion sample of sports drinks, bottled water and energy drinks used by customer 11 Cross-Sell Customers Number of products per customer Growth 12 Partner with Customers Number or gain sharing agreement 13 Customer Education for Healthier and Energetic drinks Hours with customers 65 | P a g e company profitability (compared to year before) Over 95 percent of the population use the promotion sample Target for sports drinks, bottled water and energy drinks per customer Increase 15% of company profitability (compared to year before) Allocate 2 hours per each new customer to educate them understand the nutritious value of PepsiCo healthier drinks [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Summarizing the objectives Customer Management Processes Linkages No Processes Objectives Measure Target Cost of sales per product 10% cost reduction target (ideal standard 1 SELECTION : Lower Cost Satisfying Price Sensitive Customer 3 Increase Customer Profitability Profits per customer (activity-based costing) 5% Increase in terms of customer profitability (compare to competitor selling price) Increase Revenue from Profitable Customers Revenue from profitable customers 5 Increase Revenue from High Value customers Revenue from high value customers 6 Increase Revenue Per Customer 15% increase in terms of PepsiCo market share 15% increase in terms of PepsiCo market share Sales growth Increase to 15%, The sales for any one customer should steadily increase each year 7 8 ACQUISITION: Create New Sources Revenue from New Customer Revenue from new customers 9 Create New Sources of Revenue from New Products Revenue from new products 4 Financial Perspective Revenue per customer Sales growth Increase to 15%, The sales for any one customer should steadily increase each year Sales growth Increase to 15%, The sales for any one customer should steadily increase each year 10% cost reduction target (ideal standard Improve sales productivity Cost of sales per product 10 Increase Customer Profitability Profits per customer (activity-based costing) 5% Increase in terms of customer profitability (compare to competitor selling price) 11 Increased business volume revenue per product Sales growth Increase to 15%, 66 | P a g e [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 The sales for any one customer should steadily increase each year 12 13 14 15 17 16 17 18 19 20 21 Creating Long Term Shareholder Value RETENTION: Lower Customer Management Cost Over Time Improve sales Productivity Increase Account Share with Existing Customers, Maximize Fixed Assets Utilisation Increase Business Volume Increase Customer Profitability GROWTH Lower Customer Management Cost Over Time Increase Revenue Per Customer Improve Sales Productivity 23 24 Increase Customer Profitability 67 | P a g e 10% cost reduction target (ideal standard revenue per product Sales growth Increase to 15%, The sales for any one customer should steadily increase each year Profits per customer (activity-based costing) 5% Increase in terms of customer profitability (compare to competitor selling price) Cost of sales 10% cost reduction target (ideal standard Less Responsive To Competitors Offered Price Prediction of Lifetime Value to predict Future Net Profit Maximise Use of Existing Fixed Assets, Increase Account Share with Existing Customers, Increase Business Volume 22 Cost of sales Sales/asset ratio revenue per product Sales growth Increase to 15%, The sales for any one customer should steadily increase each year Profits per customer (activity-based costing) 5% Increase in terms of customer profitability (compare to competitor selling price) [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 25 26 27 28 29 30 31 32 33 Customer Perspective Decrease Customer Costs Cost per customer Providing Lower Cost Solutions To Customers’ Problems SELECTION: Lower Price Compare to Competitor Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers High Availability of Sports Drinks, Bottled Water and Energy Drinks Products After sale service Based on needs of Target Group Enhance Quality Essential for health & Energetic Drinks, Customer-Oriented Products Deliver Zero Product Defect to Customer Perform Attractive Value Proposition Cost per product Point-of-sale data for sports drinks, bottled water and energy drinks Point-of-sale data for sports drinks, bottled water and energy drinks Number of defect produced, Zero defects Percentage of highly satisfied customers 5 % Increase in terms of customer satisfaction level (compare to year before) 15% increase in terms of PepsiCo market share 15% increase in terms of PepsiCo market share Increase Brand Image Market share 35 Increase Brand Value Market share 36 Develop Community Researcher Partnership ACQUISITION: Lower Price Compare to Competitor High Availability of Sports Drinks, Bottled Water and Energy Drinks Products Excellence Quality 39 41 42 43 Highlight Price Sensitive Customers, Focus on Quality Sensitive Customers, Focus on Active Sports Minded, Health Conscious Customers Rapidly Response to Customer Feedbacks Direct Purchasing Method Increase Customer Awareness 44 Increase Brand Awareness 40 68 | P a g e Increase 15% of company profitability (compared to year before) Increase 15% of company profitability (compared to year before) Quality survey 34 37 38 5% Increase in terms of customer profitability (compare to competitor selling price Quality survey , measure customer retention level Point-of-sale data for sports drinks, bottled water and energy drinks 5 % Increase in terms of customer retention level (compare to year before) Increase 15% of company profitability (compared to year before) Response rate Market share Market share 15% increase in terms of PepsiCo market share 15% increase in terms of PepsiCo market share [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 45 Demonstrate Great Understanding and Efficient Communication. RETENTION: Lower Price Compare to Competitor 46 Excellence Quality Quality survey , measure customer retention level 47 Maintain Excellence Relationship Percentage of highly satisfied customers 48 Increase Customer Loyalty Quality survey , measure customer retention level 49 Increase Brand Image & Reputation 50 51 52 Essential for health & Energetic Drinks High Availability of Sports Drinks, Bottled Water and Energy Drinks Products Excellence Quality 53 Zero Defects Delivery to Customers 54 Premium Customers of Drinks, Bottled Water and Energy Drinks Products 55 GROWTH: Lower Price Compare to Competitor 56 Excellence Quality 56 Rapid Increase In Brand Value 58 Loyalty Club Card 59 High Availability of Sports Drinks, Bottled Water and Energy Drinks Products Maintain Excellence Communication and Relationship , Increase Customer Loyalty 60 61 62 69 | P a g e Ensure of Constant Product Supply Premium Customers of Drinks, Bottled Cost per product produced Market share Quality survey , measure customer retention level Number of defect produced, 10% cost reduction target (ideal standard) 5 % Increase in terms of customer retention level (compare to year before 5 % Increase in terms of customer satisfaction level (compare to year before) 5 % Increase in terms of customer retention level (compare to year before 15% increase in terms of PepsiCo market share 5 % Increase in terms of customer retention level (compare to year before Zero defects Number of premium customers Cost per product produced Quality survey , measure customer retention level Market share 10% cost reduction target (ideal standard) 5 % Increase in terms of customer retention level (compare to year before 15% increase in terms of PepsiCo market share Number of loyalty club member 20 % increase of club member Percentage of highly satisfied customers 5 % Increase in terms of customer satisfaction level (compare to year before) Number of late delivery Number of premium [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 Water and Energy Drinks Products SELECTION : Strategic Skills In Customer Segmentation, Research on Customer Expectation & Needs 63 customers Human capital readiness Market Research, Develop Portfolio of Customer Management Information & Data System, Establishing Effective Communication among Marketing& Customer Service about the Segmentation Application portfolio readiness 65 Customer-Oriented Culture, Positive Internal Culture , Customer Relationship Management, Respond to the Information Effectively Customer survey 5 % Increase in terms of customer satisfaction level (compare to year before 66 Market Research, Increase Knowledge Sharing, Develop Strategic CRM Portfolio 100 percent target 67 Particular Group Serve Particular HighValue Customers Records of Valued Customers, Increase Knowledge Sharing, Number of customer hits to knowledge management system Human capital readiness Number of customer hits to knowledge management system 100 percent target 64 Learning & Growth perspective 68 70 71 72 73 74 ACQUISITION: Develop Strategic Competencies Develop Marketing Effective leader & Teamwork Depth Develop Extensive Marketing & Sales Training Continually Develop & Transfer Knowledge 75 Customer-Oriented Culture, Positive Internal Culture, Customer Relationship Management 76 78 Develop Portfolio of Customer Management Information & Data System Interactive training programs for Management and Sales Teams Increase Knowledge Sharing 79 Increase Knowledge Management Culture 80 RETENTION: 81 Records of Premium Customers 82 Create Personel Goal Alignment 83 84 Personnel Commitments and Efforts Attract and Retain Top Talent 77 70 | P a g e Human capital readiness Human capital readiness Training hours Number of customer hits to knowledge management system Customer survey 100 percent target 5 % Increase in terms of customer satisfaction level (compare to year before Application portfolio readiness Training hours Number of customer hits to knowledge management system Number of customer hits to knowledge management system Number of premium customers Employee objectives linked to BSC Human capital readiness 100 percent target 100 percent target [DESIGN STRATEGIC PLAN/SEM II/2012/2013] PepsiCo - 2009 85 86 87 88 89 90 Customer Feedback on Product Improvement, Increase Knowledge Sharing Create Customer Focus – Culture GROWTH: Develop Strategic Competencies in Sales and Promotion Personnel Commitments and Efforts Record of Premium Customer for Sports Drinks, Bottled Water and Energy Drinks Increase Knowledge Sharing for Best Practices, Extent Usage of Knowledge Management System Response rate Customer survey Human capital readiness from sales and promotion department Number of premium customers Number of customer hits to knowledge management system 91 Customer Relationship Management Portfolio Application portfolio readiness 92 Create a Customer Centric Culture, Customer Relationship Management Customer survey 93 Improve Company Reputation and Brand Image, High Quality & Healthy Culture 94 95 Attract & Retain Top Talent Rewarding Staff with Performance, Knowledge Management Systems 71 | P a g e 5 % Increase in terms of customer satisfaction level (compare to year before Market share Mission, vision 100 percent target 5 % Increase in terms of customer satisfaction level (compare to year before 15% increase in terms of PepsiCo market share Mission achieved