Business Innovation at Pepsi Company Limited - Case Study Example

The paper "Business Innovation at Pepsi Company Limited" is a great example of a business case study. Innovation is defined as the presentation of a new item or performing a certain act in an altered way. However, Innovation in business is not creativity. Creativity is basically generally related to the creation of new ideas. Professor Henry Chesbrough (2003). It is one of the most important activities in any business. Ask the worlds CEOs and they will obviously assert that developing new strategies in business as well as adopting innovations are the top urgencies of their organisation’s (Porter, Lawson & D. Samson 1999)

Excellent organisations capitalize and cultivate in their innovative ability. It is from this that they fulfill an effective and all-rounded innovation process. Therefore, this process results in new company product, company services and company processes, as well as the new digital innovation, ending up in superior business productivity. (Brynjolfsson and Hitt, 1998)

. a Company’s success is always attributed to innovation, as many business scholars often attribute. This ensures that businesses achieve efficiency and decrease duplications.

PepsiCo is one of the companies who are interested in innovation as they have a presence in many countries all over the world. The company believes that innovation motivates its growth, productivity and expansion. This is evident as PepsiCo, develops their businesses and grow their position country by country (PepsiCo 2011 Annual Report).

This study will examine the innovation strategies and activities at PepsiCo. PepsiCo is considered to be a digitally innovative company.

Introduction

Pepsi Company limited (PepsiCo) is an American based company with several thousand stores in around two hundred countries. The company operates food and beverage stores. Since its foundation in 1965, the company seeks to always provide consumers with quality products which are easily accessible (Berch, Montoya & Sawayda, 2010).

The company is rated as one of the biggest and most profitable firms in the United States. The company’s turnover in the United States is estimated to be around the US $6.74 billion. The company has employed over 72,000 employees that are spread all over the world and work in different branches to serve its expansive clientele, (Berch, Montoya & Sawayda, 2010).

 The company has more than 22 billion-dollar brands, Frito-Lay, Tropicana, Pepsi, Mountain Dew, Diet Pepsi, 7 Up, Gatorade among others. However, Pepsi is the company’s main brand (PepsiCo, 2015). It is worth noting that the company faces competition from other multinationals such as the Coca Cola Company. To remain competitive and achieve growth, PepsiCo has taken great action by engaging in business innovation activities and strategies.

PepsiCo has taken innovation as part of its underlying factors of productivity. This is evident through various new products over time e.g. Pepsi Diet, among others. PepsiCo has often been recognized as amongst the best innovative organisations in the world. It attributes its success a remarkable 5-year development rate of 10.7%, in comparison with the business average of 2.3 % 

Geroski Machin, and Van Reenen (1993), state that the rate of innovation is related to profitability and similarly innovation employs both direct and indirect effects on firm performance. (Luecke and Katz 2003; Albury 2005) identify different types of innovation. These include service and product innovation, process innovation.