PepsiCo’s Turning Point: Establishing a Role in a Sustainable Society Case Solution
- Can PepsiCoâ€™s health initiatives be a source of competitive advantage?
Â After appointment of new CEO, Indra Nooyi, PepsiCo has revised its strategic policies and has aligned its corporate strategy to produce healthier products and advance to corporate sustainability, including Human sustainability and Environment Sustainability. These initiatives have provided the company to produce and market healthier products that are perceived positively from the critics. From the public awareness of health issues and consumers diversion to the healthier products, there is high demand for the healthier products and this has been fairly met by the PepsiCo. This has increased its competitive position in the market. These initiatives have increased the profitability of the company and have enhanced its image in the consumer market and in public. The journey towards healthier products has been continued and this probably gives the company competitive advantage over its rivals.
Â Which are the companyâ€™s material sustainability risks / opportunities?
Â There were several risks and opportunities that are being faced by the company, which are listed as:
- The company can make investment in the research and development designated to healthier products.
- There is opportunity for the company to expand its products and offer diversity in the products, especially focusing on non carbonated drinks.
- Initiate programs and campaigns for schools, colleges to increase health awareness and healthier products offered by the company.
- Use of its customer loyalty and consumer behavior, as being a consumer taste leader, to draw consumer attention towards healthier life and healthier products.
- Several products are unhealthy and have social and environmental hazards innate.
- Several competitors such as Coca-Cola Company are accelerating in healthier products and sustainable business. Thus, there is risk of loss of market share and competitiveness.
- Healthier food producers are emerging and exploiting the health conscious trend of the consumer. Thus, depreciating the food and beverage market.
- Besides this, there were several other economic, political and environmental risks associated with the company that might affect its business such as Inflation, laws and recession.
- How does the company address the material risks / opportunities (For this you will need to find (though web search) a number of information /Â programmes/ initiatives though which you will illustrate how the company is addressing the issues).
Â The company has been involved in different campaign and activities that are focused to address the material risks and opportunities (Healthy Life Styles, n.d).
The company has founded the Healthy Weight Commitment Foundation (HWCF), which has been focused to reduce obesity, particularly childhood obesity. This organization has brought up several retailers, trade association, restaurants etc. to work together to remove obesity, create awareness, and promote activities that help to achieve healthy lifestyle.
Besides this, the company has also launched Food for good program for children, especially for lower income families. The company is also involved in promoting physical activities, such as GENYOUth, Fuel Up to Play 60, Asian Football Development Project etc.
Â How is the Sustainability performance improving as a result of implementing the companyâ€™s Strategy?
Â The company has aligned its business strategy along sustainable and healthy business activities. It has incorporated sustainability in every part of the companyâ€™s business (Performance with purpose, n.d). It also furnishes sustainability report that provides information on the suitability and performance. Thus, the performance of the company is accelerating with such incorporation of sustainable policies. The company has been saving millions of dollars due to its sustainable processes and operations. This has increased its profitability as well as increased its competitive advantage, while confirming its adherence to health and environment friendly products………………..
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