Pepsi's mission statement. An analysis


Essay, 2015

4 Pages, Grade: A


Excerpt

Introduction

The following paper analyzes the vision statement of PepsiCo. The analyzation of the vision statement is divided into three single parts. First of all the company itself is in the focus. That is followed by an in-depth analysis of PepsiCo’s current vision statement. The analyzation is carried out on the basis of seven characteristics namely graphic, directional, focus, flexible, feasible, desirable and memorable. Every single characteristic is taken into consideration. Last but not least a recommendation and a conclusion is given.

PepsiCo is an American multinational food and beverage company headquartered in Purchase, New York and it is the biggest competitor of the Coca-Cola Company. It is also one of the well-known brands in the world. Furthermore PepsiCo is offering one of the world’s largest range of goods including 22 different product lines. To get a German point of view into this analyzation, PepsiCo is not well known in Germany compared to Coca-Cola and its product line is quite small.

In general the vision of PepsiCo is clearly summarized in the first sentence of their vision. The company tries to achieve financial and business success while simultaneously influencing the society in a positive way. PepsiCo calls this ”Performance with Purpose”. So they try to satisfy shareholder needs but without letting other stakeholders out of sight. By summarizing PepsiCo’s vision in one clear sentence, the company does a good job in showing what they stand for. The full vision of PepsiCo is shown in the following paragraph and is available on the PepsiCo corporate website:

”PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose.

In practice, Performance with Purpose means providing a wide range of foods and beverages from treats to healthy eats; finding innovative ways to minimize our impact on the environment and reduce our operating costs; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities where we operate.

Wherever we do business, Performance with Purpose is our guide. We believe that delivering for our consumers and customers, protecting the environment, sourcing with integrity and investing in our employees are not simply good things to do, but that these actions fuel our returns and position PepsiCo for long-term, sustainable growth.”

Analyzation

The first characteristic that is examined is the graphical part. A good vision should clearly point out in which direction PepsiCo is heading and if the market position is outlined. This is also the first point where the vision statement could be criticized. The current vision statement cannot be seen as being graphic. It is mentioned what goals the company follows, but it is done in a more general way and it is not mentioned where exactly the company is heading. Furthermore it is not mentioned which market position PepsiCo wants to be in. So it can be said that the vision statement is incomplete.

The second characteristic, which is analyzed is the directional one, meaning if PepsiCo’s vision is forward-looking and directional. A good vision should describe the strategic course that will help the company be ready for future challenges, which is very important in a globalized world where new entrants from all over the world try to take market shares from incumbents. PepsiCo tries to become a sustainable company, establish activities to benefit society and build shareholder value. This is done by offering core products from their food and beverage portfolio. At the same time PepsiCo is innovating new paths to reduce the impact on the environment and also reduces operating costs. Furthermore they want to offer safe jobs for their employees around the world. Additionally PepsiCo invests and supports the communities they are operating in. With this, PepsiCo has the chance to expand their market by offering reliable products to make the consumer more confident and the company itself more sustainable. Also PepsiCo is not focusing on what they might have achieved in the past but the goals are clearly future oriented.

Moreover, a good mission statement should as well be focused in order to provide managers help for their decision making and resource allocation. This characteristic can be understood as a basic guideline for managers. The vision makes it clear how managers should pursue decision making and allocating resources by focusing on the already mentioned environmental stewardship, activities to benefit society and to build shareholder value. Putting all that together, it helps PepsiCo to create a positive brand image and a higher brand awareness. A positive brand image and a higher brand awareness will help them to launch new products, establish and serve new market segments and create a higher shareholder value. Altogether it can be said that the vision is focused and that it is proving a clear guidance on what to do in order to achieve the company goals.

Additionally the fourth characteristic is to stay flexible or in other words to have some wiggle room. It means in detail to use a language that allows being flexible about the directional course and that this course can be adjusted when market-customer-technology circumstances are facing change. In general, the best vision statements help to motivate PepsiCo’s employees and influence shareholder confidence about the company’s future in a positive way. Flexibility also helps to cope with uncontrollable aspects like an economic crisis or a new competitor entering the market. Here Pepsi is doing a good job because the vision shows that PepsiCo is trying to create a better future by improving all aspects of a better world. This helps them in two ways. First it may help them to perform better compared to the previous years. Second it also supports them to become a truly sustainable company. Nevertheless they still keep strong flexibility regarding how to achieve this.

The fifth characteristic regards the feasibility of the vision statement, which means that the direction and the path should be accomplishable for the company and the company should be able to demonstrate measurable progress in achieving the vision over time. Summarized, the vision statement has to demonstrate a feasible journey. It should be avoided that the vision statement is too generic. That means that the vision has to be unique and hard to apply on other companies in the same industry and also in other industries. Would the vision be easy to apply on other companies, it would mean that the vision is not providing any specific guidance. This leads to a second critic on the vision statement of PepsiCo. They expect to improve all aspects of the world with a highly developed distribution network and strong financial background. But here is the problem with it. This can be easy transferred on any company in any industry. Another point is the question if PepsiCo can really change the world with only providing food and beverages. However, to fulfill these goals PepsiCo needs a lot of different resources as well as enough time.

In addition, the desirable component focuses the long-term interest of the stakeholders. A good vision statement should show why the chosen directional path should be in the long-term interests of the stakeholders. A bad example for a vision would be when the company would claim their strategy as the best or the most successful one. That usually lack specifics about the path the company is taking to get there. As indicated in PepsiCo’s vision, they have a strong interest in creating shareholder value. PepsiCo delivers their products to the customers, protects the environment, sources with integrity and invests in their employees. With these mentioned actions, PepsiCo wants achieve high returns and a good market position in order to be successful on the long term and create growth that is sustainable. So PepsiCo is not interested in short-term success but in operating long-term. This path is confirmed by their history in delivering high returns for their shareholders. Also the strong brand and recruiting top talent employees confirms this path. But with this long-term strategy, problems with disagreeing shareholder may also occur and resulting in management versus shareholder conflicts.

Last but not least the vision statement has to be memorable. The vision needs to be easy to communicate in order to give the organization a sense of direction and purpose. Also it should be easy to understand for the audience to which the vision statement is addressed. It needs to be reducible to a few choice lines or a memorable slogan. This is important because a vision statement that is not short and does not point out things clearly, will tend to lose it’s audience and then the whole reason for a vision statement would be gone. The PepsiCo vision statement is using a clear language and it is easy to understand. Furthermore the first sentence of the vision statement can be seen a slogan wich summarizes the whole PepsiCo vision in just one sentence.

Recommendation and Conclusion

There are only a few things that PepsiCo could improve in their current vision statement. First of all the vision statement should be more graphical. PepsiCo has to show precisely where they are heading and in which markets they are currently operating in order to point out to their customer what kind of business they run and by what purpose. Also their guidance should me optimized in a more precisely way. Furthermore the vision statement is to broad and can be easily transferred on other companies. PepsiCo has to differentiate itself clearly to other companies and make their vision more memorable. Another point on what PepsiCo could work on is to mention the high quality of their products in order to increase the trust of its customer in PepsiCo products.

Furthermore PepsiCo should think about directly including its ”Performance with Purpose” in their mission statement. Actually the way they perform is mentioned in the vision statement but the three building blocks on which the ”Performance with Purpose” is built on are paraphrased but not directly mentioned. I think they are an important component of PepsiCo’s vision statement. The three guidelines are namely human sustainability, environmental sustainability and talent sustainability. To include these three guidelines directly, would differentiate PepsiCo’s vision statement from their competitors and would overall make the vision statement more specific and focused.

Summarized, PepsiCo’s current vision statement is good but as I shown in my recommendations, there is always room for improvements. With my recommendations the vision statement would be more focused, easier to understand and more memorable. Furthermore PepsiCo could clearly differentiate itself from other companies vision statements and make their vision more unique and compelling in order to create a better future and become a more sustainable company.

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Details

Title
Pepsi's mission statement. An analysis
College
California State University, Fresno
Grade
A
Author
Year
2015
Pages
4
Catalog Number
V306962
ISBN (eBook)
9783668048058
File size
388 KB
Language
English
Tags
Pepsi, mission statement, vision statement
Quote paper
Florian Metz (Author), 2015, Pepsi's mission statement. An analysis, Munich, GRIN Verlag, https://www.grin.com/document/306962

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