A cure for the upset stomach
Pepsi-Cola was created in 1898 by Caleb Bradham, a North Carolina pharmacist who claimed the drink could cure dyspepsia. Pepsi began to produce canned soft drinks as early as 1948, and growing sales in the 1970s and 1980s ensured that its rivalry with Coca-Cola reached a fever pitch of competitiveness. While Pepsi triumphed briefly in the mid-1980s due to its "taste test challenge" - forcing Coca-Cola to revamp its hallowed formula (otherwise known as the "New Coke" debacle) - it has since fallen back into its position as the perennial No. 2 thirst-quencher.
PepsiCo may not have won the cola wars, but it still has plenty of fizz. The company has a healthy chunk of the world's cola share at Pepsi, its Frito-Lay division is the world's largest snack chip maker, and its Tropicana division is the world's largest marketer and producer of branded juices. Until 1997, the company also controlled a vast network of fast-food operations that included KFC, Pizza Hut, and Taco Bell. With 29,000 locations across the world, the restaurant group was the largest in the world. However, PepsiCo decided to spin off its restaurant business as a separate company, a restructuring that took close to a year to complete. The move was part of a long-term strategy to strengthen Pepsi's position in the marketplace and improve the consistency of its financial performance and shareholder returns by focusing on its beverage and snack business. A mutual public offering in 1999 prompted the sale of approximately 60 percent of the Pepsi Bottling Group, leaving Pepsi-Cola to focus on the marketing of the beverage.
PepsiCo's first beverage business, Pepsi-Cola, hopes to improve its international cola sales by changing its packaging design and by capitalizing on its presence in high-potential markets such as China, India, and Russia - where Nikita Krushchev was first filmed downing a Pepsi in 1959. The new marketing plan: play the blues. Responding to Coke's control over the color red in its packaging and marketing, Pepsi's reaction has been to play up the color blue to give its product distinction. The new Pepsi packaging is now completely blue, except for its red, white, and blue logo. In April 1998, PepsiCo supported its first bottling company's 100th birthday in its birthplace of New Bern, North Carolina by draping the town with its corporate blue and restoring the pharmacy where young Caleb stumbled onto the billion-dollar product.
PepsiCo has enjoyed success from its other drinks, including Mountain Dew, and from its joint venture with Lipton, the country's leading maker of bottled iced tea. In June 1998, the firm launched a new one-calorie soft drink, Pepsi One, with a whopping $100 million campaign starring Cuba Gooding, Jr. as lead pitchman. Pepsi One uses a newly approved sweetener Ace-K. And Frito-Lay is keeping a new generation of couch potatoes satisfied - and even a bit less corpulent - with its new line of low-fat and fat-free products.
Still No. 2
Despite the fact that PepsiCo's revenues top those of Coca-Cola (thanks to carbo connoisseurs), Pepsi still struggles in the cola arena. Coca-Cola manages to retain the larger market share even though it falls behind in the revenue department. Although Pepsi has long pointed to Coke?s fountain dominance as the primary reason for its overall market share lead, Big Red has consistently beaten Pepsi in retail store sales.
However, Pepsi recently claimed victory when it ousted Coke as the sole beverage distributed by the Disney-owned Edison International Field of Anaheim, home of baseball's Angels. The move enables PepsiCo to begin a relationship with fellow American icon Disney, which in the past has exclusively used Coke products in its facilities. The move marks another stride in Pepsi's plan to focus on fountain drinks, which have a higher profit margin than canned or bottled beverages. In other deals, Pepsi tallied up points in gaining rights to become the exclusive beverage partner for Star Wars Episode I - The Phantom Menace.
PepsiCo does not provide national listings of current job openings. Usually HR will provide a pre-screened list of candidates from various sources (colleges, papers, etc.)." For Pepsi "direct experience is great, but you must also must have demonstrated the ability to learn and adapt in business situations." Pepsi wants "individuals with the potential to become senior managers." The interview process is pretty straightforward: "no case studies or anything." A candidate "will be interviewed by four or five people in one day, especially (interviewees) from out of town." The multiple interviews are "just people trying to get to know you, where you're coming from, what you have to offer."
"PepsiCo offers excellent opportunity for early responsibility and a culture that encourages initiative, risk taking and access to decision makers," says one insider. The company has a "professional but fun" corporate culture in which employees are "free to pursue their goals" without "the burden of excessive structure." The "casual" and "collegial" environment is headed by senior management "eager to hear the questions and ideas" of their more junior colleagues. Pepsi "is also a company of candor and reality."
PepsiCo is into "diversity - they welcome and actively recruit people of color and give them early opportunity for advancement." Fortune magazine named PepsiCo as one of the "Best Companies for Women and Minorities" to work for, and in 1998 alone PepsiCo spent 5 percent ($285 million) of its procurement budget with minority and women-owned businesses. However, say insiders, "PepsiCo really wants one type of person, regardless of ancestry, someone who will put their job before their family or personal life." As Pepsi's "diversity is centered around birth rather than style or culture," the result for some is that PepsiCo culture is "fairly uniform: extremely competitive and very focused." However "the business units have a fair degree of autonomy" so even things such as dress code vary from office to office.
Employees praise the company's benefits program, which includes a "bountiful retirement package, a tuition reimbursement program, and even a legal assistance program." The downside of this is that "the culture is deliberately geared to churn people - the workload is extreme, your job is everything, and personal needs (family, vacation, etc.) are frowned upon." The effect of this attitude is that "Pepsi will burn many people out very quickly." But many see Pepsi as the "?ultimate corporate workplace - if you make it here you can make it anywhere." PepsiCo has instituted a number of work family programs to ease the strain of corporate life including flex-time and work at home arrangements. Though insiders have mixed reactions to PepsiCo compensation packages, company representatives report that they strive to offer salaries in the top quartile. Monetary issues aside, the "challenging" assignments and "accessible promotion path" aid job retention. When people do leave, they do so in a position of strength, as one employee notes, "PepsiCo experience is well thought of, and this seems to be backed up by the jobs that people hold after they leave."
The bottom line, an insider concludes, is that "Pepsi is a great place to make a name for yourself with a wide open career track, but only if you?re prepared to make personal sacrifices."
More Company Profiles
For more career information, go to Vault.com
©2000, Vault.com Inc