Pepsico Strategic Initiative

PepsiCo Strategic Initiative
FIN/370
PepsiCo Strategic Initiative Paper
        Making critical changes are complicated no matter what the size of the organization.   In order to make these changes an organization needs to do strategic planning.   Strategic planning is a “systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them” (businessdictionary.com).       In the following, Team B will identify a PepsiCo strategic planning initiative and discuss how it will affect the organization’s financial planning, analyze how it will affect costs and sales, and discuss any risks associated with the initiative and the financial effects they may have.
Initiative Affects of Organizational Financial Planning
      According to PepsiCo website, PepsiCo offers the most compelling value to shareholders. Some of the key initiatives are increased investments on their iconic brand, implementation of a three-year productive plan, improvement on net return on invested capital, and enhancement of returns to share holders.   Doing all of this allows PepsiCo to become more successful than they already are and to maximize gross profit.
Increasing investments on their iconic brand is a marketing ploy that makes sure they are advertising enough to ensure the world knows about their new and old products. “Advertising and marketing spending will increase by $500-$600 million in 2012, the majority in North America” (PepsiCo, 2012).   In order for this to happen the advertising will be supported by total revenue of the company.
      PepsiCo plans to “implement a three-year productivity program that is expected to generate over $500 million in incremental cost savings in 2012, further incremental reductions in the cost base of about $500 million in 2013, and an additional $500 million in 2014” (PepsiCo, 2012).   All the money that will be coming in from this plan will be invested into more...