Pepsico: The Challenge of Growth Through Innovation

Abstract

How does a large corporation rethink and transform itself in an increasingly competitive environment? This corporate-strategy case could be described as how PepsiCo stopped worrying about competing with Coke and figured out what its real business was and how to build its future. A new CEO wants to grow PepsiCo into a major global corporation by figuring out what it is good at, where its markets are strongest, and how to achieve growth through innovation and corporate transformation. Redefining itself as a beverage and snack business, PepsiCo sheds the restaurant business and acquires Quaker Oats and Tropicana. Then, by rethinking the synergistic relationships between the complementary, combined strengths (technological expertise in nutrition, flavor, packaging, distribution, etc.) of the merged companies, it strategizes to develop innovative products that will compete in a changing demographic, cultural, and geographical world. Will this strategy work in an increasingly competitive environment?