Abstract

US based PepsiCo conducted a major restructuring exercise in 1997-98 by spinning-off its restaurant and bottling business. The restructuring was aimed at achieving improved focus on the company's core beverage (Pepsi-Cola) and snack food operations (Frito-Lay). By successfully adopting the 'focus' strategy since 1997, PepsiCo has emerged as the second largest consumer packaged goods company (in terms of revenues) in the world. By acquiring leading beverages' company like Tropicana products (July 1998), South Beach Beverage Company (October 2000) and Quaker Oats (December 2000), the company has significantly strengthened its competitive position in the beverages segment. The case examines in-depth the key elements of the focus strategy followed by PepsiCo.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Generic Strategies
• Spin-off
• Restructuring.

Keywords

PepsiCo, Generic Strategies, Focus Strategy, Porter's Five Forces Model, Spin-off, Restructuring, Acquisition, Strategic Fit, Quaker Oats, Diversification Strategy