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Decision Making: of Pepsi Company - Case Study Example

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This paper “Decision Making: Case of Pepsi Company” shall explore such considerations made by Pepsi and evaluate the ultimate decision made by the CEO. Recently, the Chief Executive Officer (CEO) of Pepsi Company decided to extend the business to some African countries…
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Decision Making: Case of Pepsi Company
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Download file to see previous pages The company specializes in the production of soft drinks of different brands. The company, however,r diversifies its production to other related products such as bottled water, savory and even the whole-grain snacks. This diversification has tremendously increased the sale and consequently, the gross profit of the company across the globe (Pepsi, 2010).
Moving to Africa was not a soft nut for the management of the company. There were several factors that posed threats to operations in Africa. On the other hand, the optimistic CEO could discern abundant opportunities for making a huge profit in the fallow land of Africa. For that matter, the pros and cons had to be weighed on the same beam balance.
Infrastructure is always the key consideration made by any multinational companies before opening corporate businesses in foreign countries. In this case, the target location had poor infrastructure. Bad roads may deter product distribution and sales, especially in remote areas. The company might have to spend more on vehicle repair and maintenance. Electricity distribution in some parts of Africa is uneven. The electrical energy is needed to preserve and cool the soft drinks would be lacking in such locations, giving the products a bad taste thereby lowering the demand. Another big challenge to Pepsi Company would be its competitors, and in this case, the Coca-Cola company which has deeply established its roots in the whole of the Africa regions and has retained a great customer loyalty. Changing the pre-set minds of the customers in Africa will not be a cup of tea for the new company. Furthermore, Pepsi had created very little customer awareness in most of the African nations. ...Download file to see next pagesRead More
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