SPECIAL ASSIGNMENT ATTN: CATHERINE OWENS

Running Head: BUSINESS MODEL ASSESSMENT 1

BUSINESS MODEL ASSESSMENT 9

Business Model Assessment

Paula Hawkins

American Public University

January 26, 2020

General description of PepsiCo

PepsiCo is among the largest American food and beverage company that has its products in more than 200 countries today. The company focuses on the manufacturing, distribution, and marketing of snack foods and beverages. The name was a result of a merger between Pepsi-Cola and Frito-Lay. The company has its headquarters located in Harrison, New York, in the hamlet of Purchase. In 1965 PepsiCo was formed from a merger with Frito-Lay Inc. that used to make snack foods like lays potato chips and Doritos. The merger resulted in diversification with further purchase of three restaurant chains; the Kentucky Fried Chicken Corp, Taco Bell, And Pizza Hut Inc., the company, in 1998 added more products that they considered healthier. They added Tropicana and dole juice brands.

In the year 2001, it further merged with Quaker Oats Company to form Quaker foods and beverages (Silvano 2019). From this merger arose many other brands that known today including Pepsi cola, Frito-Lay snack products, Lipton Tea, Tropicana juices, Gatorade sports drinks, Quaker Oats cereals, and Rold Gold pretzels. since the year 2012, the company has expanded and generated retail sales of more than a billion dollars. With the product distribution to more than 200 countries, the company's annual revenue has also grown significantly to over 40 billion dollars making one of the largest foods and Beverage Company in the world. The company conducts beverage distribution as well as bottling in association with other licensed bottlers partnering with them.

As regional sales manager at PepsiCo, the primary responsibility and job description include the following: ensuring that maximum revenue at that particular unit defined by store delivery and distribution to the market. The sales manager also has the responsibility of coaching and leading sales professionals and employees on sales and distribution. Another role is to build and maintain rapport and partnerships with customers while ensuring customer satisfaction and initiating market promotions that maximize brand performance.

PepsiCo Business Model Canvas

Key Partners	Key Activities	Value Propositions	Customer relationships	Customer Segments
The unique activities performed by PepsiCo to deliver the stated value propositions. The company’s products that include several brands Investors Subsidiaries Media Acquisition and divestments Fast food industries Sports industry Celebrities Distribution and supply network FDA Pakistan seven franchisees	Manufacturing Marketing and promotion Production and distribution Operation activities Food and beverage processing Quality control Branding International expansion	Answers the question, why? What customers gain for buying from PepsiCo; Has the leading and the best quality food and beverage brands in significant markets? Affordable prices and convenient brands National football league sponsors Environmental conservation and advocates, including recycling of plastic bottles. Investment in media companies	How does PepsiCo attract, retain, and grow their customers? Provides excellent services that meet consumers’ taste. Leading in providing highly nutritional and quality foods and beverages. PepsiCo foundation program Campaigns and events. Brand awareness Customer loyalty. Ads and recommendations	This focuses on who the customer is. For PepsiCo it is. Massive markets worldwide Broad type of portfolio for different segments
	Key Resources Strategic objectives and resources that make the business run on profits and not losses. Products distributed to more than 200 countries worldwide. Company’s physical resources like infrastructure Distribution chains and network Brands Employees and intellectuals Partnerships and goodwill Diversification into food products like snacks PepsiCo foundation Recycling bottles		Channels How products and services are delivered to the market and how customers get information about these products and services. Vending machines. Restaurants Supermarkets Convenience stores Hypermarkets Retailers, Kiosks Fast food chains Social media; TV Google adverts Gas stations
Cost Structure	Revenue Streams
States the major costs incurred in running the business. Ingredients and supply Headquarters Packaging Manufacturing and distribution costs Fabrics Employee wages Marketing and advertisements Maintenance of production facilities	How does PepsiCo as a business earn money? From Retail and Global sales Dedicated to producing the best quality foods and beverages. Revenue from Major sporting activities Licensing and leasing Subscriptions.

The PepsiCo business model is a laid-out plan for identification of revenue sources, consumer target, products and services, and details of the operation to ensure the successful running of the business. Most importantly, it tells the operations manager how to identify and keep the most fundamental drivers of the business together and operational. The business model canvas above shows connections among various elements key to running a business with features on the left representing the costs and on the right revenue.

From the above model, there are nine building blocks; customer segments block defines the target customers that PepsiCo intends to serve. The best way that PepsiCo approaches this is by collecting the demographic data on its customers (Gassmann et al., 2016). The value proposition is the quality attached to what is delivered to consumers. PepsiCo is known for the best snack foods and beverages. Apart from the affordable cost and value of their products, there is also a variety of brands that ensures that different tastes of the consumers are met. The channels are platforms and means of reaching the consumers and delivering the products and services. Channels are how the company reaches its customer segments and deliver value proposition. Customer relationships ensure that the company not only acquires and retains customers but also grow its customers by diversifying and satisfying their continuing changing demands and tastes. The result here is always to boost sales and increase revenue. Revenue streams describe how PepsiCo makes money; they should not only focus on the prices attached to the products but also the value the customer is willing to pay for and the mode of payment. PepsiCo generates its income through sales, subscription fees, leasing, licensing, and adverts. Key activities are the most crucial part of the company that entails product design, manufacturing, distribution, and marketing. It also covers the development and future expansion strategies. Key resources are human resources, finances, and infrastructure. Key partners are majorly the suppliers and those that contribute to the running of the company. Partnerships and alliances with other companies is an integral part to put into consideration so that it compliments business performance. The cost structure is generally the expenditure incurred by PepsiCo in driving the company.

Operations Management

In a business model, there exist observable patterns, designs as well as the business strategies that are essential for the operations of the given firm. As an example, in the PepsiCo business model, there are specific observable patterns, designs, and even business strategies in the model. Among the visible patterns is engaging in increased research and development. The business model engages in various activities of researching and investing in global innovation to meet the changing and growing demands and preferences of their consumers. The innovation also enables the firm to overcome its critical challenges like global competition. The other observable pattern in the model is the aspect of seasonality. Since the model is affected by seasonal changes such as changes in the prices, the firm engages in setting the appropriate prices so that the financial results are not affected during the low season. The sales made during the high season cater to the low prices when the season is low.

Concerning the designs in this business model, there is an aspect of owning various trademarks that are important for operating globally (Gudiksen, 2015). The brands, as well as the intellectual rights of the property, have been guaranteed by the firm, and this is a crucial thing in ensuring that the stakeholders of the firm feel that they are secure and protected. The possession of various operations that have been organized into several reportable segments is the other design that is common in this business model. The activities have been divided into parts and are well-planned so that the overall goal of the organization might be attained. Additionally, the business strategy is the other essential aspect as far as this model is concerned. Either working independently or acting in conjunction with the third parties, the business engages in the making, marketing, selling, and distributing various types of snacks and food brands. The above strategy is essential for enabling the firm to overcome resistance when venturing into new business areas and getting the much-needed base that is essential for the business operations. The other strategy embraced by this model is the aspect of incorporation where the business has been incorporated in various parts of the world. The model also has subsidiaries in greater than two hundred territories and states.

As far as this business model is concerned, the issue of business metaphors is essential to examine. As framed by Morgan, (2011), the business metaphors have been incorporated into the business models and are necessary for enabling an organization to be operational and highly effective. With this model, the appropriate metaphor that is applicable is that of business as an item or tool for domination. In this case and the concerned model, the managers, and the staff of the firm, as well as the entire workforce of the organization, are needed to fully devote themselves to work for the firm so that it may dominate the world of competition.

As a result, the employees might think that their work is insecure and face incidences of stress and anxiety, and in this manner, an incidence of a metaphor occurs. As developed by Bolman & Deal (2003), framing is also essential in this model. The two individuals asserted that since no frame that works effectively in each situation, a leader that sticks to a single frame is eventually bound to act ineffectively and improperly. Therefore, in this model, the leaders of the organizations are obliged to utilize an appropriate framework as a tool of reference and behave appropriately for different challenges that an organization might be experiencing. The leaders should not use a single framework at all times or in all the situations that the organization might be experiencing. Instead, various frameworks must be applied to the management of the organization.

Business Problems and Metaphors Used

Both PepsiCo Americas Beverages and Amazon.com, Inc. as global companies represent interesting case studies for the review of some metaphorical elements of structure, business, and management designs. To start with, PepsiCo being in the healthy food market has faced many challenges and setbacks. The biggest challenge has been the integration of its global activities. From the metaphorical machine view, PepsiCo, the over 300,000 employees are expected to work diligently and meet the shareholders' goals of profitability and growth (Aguirre-Mar 2013). As a machine, PepsiCo is a tool to achieve the ends of its owners. PepsiCo is also underpinned by the organismic view, where it must compete with the likes of Coca-Cola for the market. Guided by its culture, PepsiCo aims at winning with its diverse employees through the inclusion and respect of others.

On its part, Amazon is driven by a culture of expansion and growth. This is in addition to continuous innovation and lean management of the capital it purchases (Berryman, 2013). This is an indicator that organizations can adapt and change. Innovation is the right way that has helped the Company to find ways of dealing effectively with change. Given the dynamic and technological market niche it operates in, it has, for instance, transitioned from physical delivery to digital delivery, which is a significant change in both distribution and logistics. It is also worth noting that Amazon has continued to enter new markets by creating new products and services through related diversification. It has done so to edge out the competition, which is a significant threat to its business operations.

Critical Issues Stated In the Cases

There is a myriad of essential issues stated in the cases. Ranking on top is an adaptation to changes due to the dynamic marketplace. The organizational culture follows this. Within the. organizational culture, there are hierarchical leadership issues. Other issues that dominate the organizations are the interests of the stakeholders within the organizations, conflicts among the employees, and power issues between the top leadership and the subordinates given the diverse workforce. Additionally, there is the effect of the decisions that are made by the senior leadership and implemented by the bottom-line employees.

Evaluation of the Proposed Solutions, Their Validity, and the Use of Metaphors in the Solutions

By clinging to the organizational culture in its global reach, PepsiCo has been able to be a dominant player in the healthy food market with its beverages. According to Aguirre-Mar (2013), given the over 300,000 employees, commands are given from the top of its management hierarchy and travel throughout PepsiCo's organization in a precisely defined way to have a precisely defined effect. That is why the employees bound by rules and beliefs can work diligently and meet the set goals. It is expected in such a diverse workplace that there are disagreements and conflicts but guided by its culture, employees respect others, and they all feel included, thus the success of the company. The proposed solutions in Amazon have also driven its unprecedented expansion and growth (Berryman, 2013). The uses of metaphors have assisted in the solutions. Since organizations must adapt to change, Amazon has followed suit and transitioned from physical delivery to digital delivery. It very well understands the dynamic and technological nature of the market niche it operates in, therefore its creation of new products and services through related diversification.

Proposed Recommendations

There are numerous recommendations that I can suggest to both PepsiCo and Amazon. Using the organismic view, which emphasizes growth, adaptation, and environmental relations, both companies could use available resources to edge out the competition. On its part, PepsiCo works diligently on its beverages to outcompete Coca-Cola. On its part, Amazon could tap into the potential of selling everything that is not possible with eBay. Employees are an essential aspect when it comes to company success; therefore, both Companies should work on rewarding and promoting employees so that they are satisfied to deliver. The diversity of their workforces calls or inclusion and respect. To adapt well to changes, employees must be trained and allowed space to be innovative.

Communicating the Solutions in Each Case

It is imperative to note that, or global corporations, there are organizational structures that are in place to ensure the companies succeed. Therefore, solutions in PepsiCo will be communicated using their continental or regional offices. The regional managers will then communicate with their immediate inferiors and consequently, to the subordinates. Similarly, Amazon would do the same by ensuring that all its global agents and employees get the decisions and necessary information that will guide them in executing their duties. Decisions made at the top of the organizational hierarchies are processed by the employees in both the middle and bottom levels, thus aiding in achieving corporate objectives.

Takeaways/Benefits of Using Metaphors in Management Practice

In conclusion, metaphors are useful tools, particularly in organizational communication. The metaphors used in analysing the case studies, create vivid mental images that help readers interpret the case studies. According to Cornelissen and Kafouros (2008), they keep a clear mental picture of the organization. Undeniably, through the eight elements, Morgan vividly elaborates a clear view or perspective of an organization as a machine, brain, organism, machine, instruments of domination, psych-prison, flux, and transformation and a political system. With metaphors, it easy to grasp the context of an organization, understand its hierarchical structure, management control, leadership style, and behaviour. The metaphors give a clear and broad perspective by slicing an organization from a given angle. As a final note, the use of metaphors in management practice helps individuals look at organizations from various aspects and opens the possibility for continued innovation and success.

References

Silvano, A. G. M. (2019). Mergers & acquisitions: buy-side advisory solution to PepsiCo, Inc. on its acquisition of Mondelez International, Inc (Doctoral dissertation).

Laseter, T. M. (2017). PepsiCo: QTG Emerging Channel Investment. Darden Business Publishing Cases.

Bolman and Deal. (2003). Reframing organizations.

Gassmann, O., Frankenberger, K., & Sauer, R. (2016). Exploring the field of business model innovation: New theoretical perspectives. Springer.

Gudiksen, S. (2015). Business Model Design Games: Rules and procedures to challenge assumptions and elicit surprises. Creativity & Innovation Management, 24(2), 307-322.

Morgan, G. (2011). Reflections on images of the organization and its implications for organization and environment: Organization and Environment.

Aguirre-Mar, M. (2013). Global Structural Design and Results: PepsiCo Case. Journal of Strategic Leadership, 4(2), 6-13.

Berryman, M. (2013). Amazon.com, Inc.: a case study analysis. Retrieved from https://www.academia.edu/8744694/Amazon.com_Inc._a_case_study_analysis?auto =download

Cornelissen, J. P., & Kafouros, M. (2008). Metaphors and theory building in organization theory: what determines the impact of a metaphor on theory? British Journal of Management, 19(4), 365-379.