summarize and answer the questions in case 15 pepsicos journey toward an ethical and socially responsible culture

HOW DOES PEPSICO BALANCE THOSE STAKEHOLDERS SUCH AS CONSUMERS AND SHAREHOLDERS INTERESTED IN GOODS TASTING PRODUCTS AND FINANCIAL PERFORMANCE WITH SPECIAL-INTEREST GROUPS AND REGULATORS

NATIONAL ICONOMICS UNIVERSITY

ADVANCED EDUCATIONAL PROGRAM

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-STUDY CASE REPORT TOPIC SUMMARIZE AND ANSWER THE QUESTIONS IN CASE 15: PepsiCo’s Journey Toward An Ethical and Socially Responsible Culture

Student name: Nguyễ Thị n Thanh Hi ền Class: International Bus siness Management 64B

Student ID: 11222216 Subject: Bussiness Ethnics Lecture: Nguyễn Bích Ngọc

MỤC LỤC

A SUMMARY 3

I COMPANY OVERVIEW 3

II COMPANY AND MARKETING HISTORY 3

1 BUILDING A BRAND 3

2 CELEBRITY ENDORSEMENT 3

3 RECENT YEAR 4

III PEPSICO DIVISIONS AND BRANDS 4

1 PEPSI – COLA BRANDS 4

2 FRITO – LAY 4

3 GATORADE 4

IV CRITICISM 5

1 INDIA 5

2 HEALTH 5

3 AQUAFINA TAP WATER 6

V SOCIAL RESPONSIBILITY AND SUSTAINABILITY 6

1 PEPSICO GUIDING PRINCIPLES 6

2 SUSTAINABILITY 6

3 EMPLOYEE COMMITMENT 7

4 PEPSICO FOUNDATION 7

5 DREAM MACHINE 7

VI CONCLUSION 7

B ANSWERING THE QUESTIONS 9

1 HOW DOES PEPSICO BALANCE THOSE STAKEHOLDERS SUCH AS CONSUMERS AND SHAREHOLDERS INTERESTED IN GOODS TASTING PRODUCTS AND FINANCIAL PERFORMANCE WITH SPECIAL-INTEREST GROUPS AND REGULATORS THAT ARE MORE CONCERNED ABOUT NUTRITION? 9

2 HOW EFFECTIVE DO YOU THINK PEPSICO HAS BEEN IN RESPONDING TO STAKEHOLDER CONCERNS ABOUT NUTRITION AND SUSTAINABILITY? 10

3 DO YOU THINK IT IS LOGICAL FOR PEPSICO TO PARTNER WITH NUTRITON AND WATER CONSERVATION NONPROFIT GROUPS SICE IT RECEIVED HEAVY CRITICISM FOR UNHEALTHY PRODUCTS AND WASTEFUL WATER PRACTICES? 12

C REFERENCES 13

A SUMMARY

I COMPANY OVERVIEW

PepsiCo's business headquarters and headquarters are in Harrison, New York One

of the biggest food and beverage corporations in the world, PepsiCo produces and markets 22 brands of snacks and beverages and distributes them to more than 200 nations PepsiCo's broad use generates a sizable profit for them each fiscal year They have received several accolades and honors during the course of their business

II COMPANY AND ARKETING HISTORY M

Caleb Bradham, a pharmacist, created the Pepsi formula It was first sold under the name "Brad's Drink," but in 1898, because it contained pepsin and kola nuts, it was renamed Pepsi-Cola Due to the popularity of Braham's new invention, he made the decision to found the Pepsi-Cola Company in 1902 so that everyone may enjoy the beverage However, this company also faced numerous difficulties before becoming successful Because of considerable swings in sugar prices during World War I, the business incurred a financial loss, and Bradham sold the trademark to Craven's Holding Corp., who then sold it to Roy C Megargel, a New York stockbroker, in 1923 Megargel tried unsuccessfully to resuscitate the market The Pepsi-Cola corporation filed for bankruptcy a second time in 1931 Candy producer Charles Guth chose to purchase Pepsi-Cola after deciding that it would

be a fantastic investment After two years, the company had made more than one million dollars and was on its way out of business

1 BUILDING A BRAND

With the introduction of the first "nickel, nickel" jiggle in the country during the Great Depression, Pepsi established itself as a low-cost market leader.With the introduction of sugar restrictions, World War II continued to put PepsiCola's resilience to the test, but Pepsi's marketing initiatives and brand identity helped Pepsi survive the trying time

Through its marketing initiatives, Pepsi effectively updated its procedures and product positioning for the modern market Pepsi created Diet Pepsi in

1964 in reaction to the nation's apparent shift in lifestyle toward health

2 CELEBRITY ENDORSEMENT

Pepsi works with several celebrities to build on the Pepsi brand, the most well-known of whom being Michael Jackson Another milestone in marketing history was Pepsi's entry into the Soviet market The Soviet Union and the corporation formed a positive connection, which resulted in

a trade deal in 1972, with Pepsi becoming the first foreign consumer

product offered in the Soviet Union Pepsi was also the first marketer to acquire time on Soviet television in 1988 To appeal to the younger population, a Pepsi commercial ran later that year that had Soviet adolescent performers

3 RECENT YEAR

PepsiCo has continued to rely on celebrity endorsements PepsiCo has employed Shaquille O'Neal's popularity and racecar driver Jeff Gordon to appeal to sports fans

Indra Nooyi, PepsiCo's new CEO, took over in 2006 and began

restructuring the company to focus on numerous distinct initiatives PepsiCo has begun to focus more on nations other than the United States, generating healthier foods, having a net-zero environmental effect, and establishing a better working environment Furthermore, PepsiCo began spending more in nations where it does business, such as China, and profiting more and more

III PEPSICO DIVISIONS AND BRANDS

PepsiCo is divided into four divisions, each of which is further subdivided into separate companies These are some of the most widely recognized and lucrative PepsiCo businesses

1 PEPSI – COLA BRANDS

Soft drink growth has slowed in the recent decade due to a new wave of health consciousness across the country, which will be a problem for Pepsi soft drinks PepsiCo must revamp in order to become a healthier brand that appeals to more health conscious consumers PepsiCo has recently began -revamping its beverages sector in order to improve unit cohesion

2 FRITO – LAY

FritoLay had a great business history prior to the merger with Pepsi-Cola Frito Lay Company was founded in 1961, and four years later joined with Pepsi-Cola to establish PepsiCo FritoLay today controls more than half of the American snack food sector, which includes several well-known brands FritoLay, like other large corporations, has had its share of issues

throughout its history

3 GATORADE

Gatorade is the official beverage of the NBA and Major League Baseball Gatorade was purchased by Quaker Oats Co in 1983, which was eventually purchased by PepsiCo when PepsiCo bought Quaker Oats Co in 2001, and

Gatorade has since become PepsiCo's third most popular selling drink Despite Gatorade's success, the sports drink sector has suffered diminishing sales and increased competition in recent years As a result, PepsiCo has spent the most money in its history to develop a new Gatorade campaign and lineup known as the "G Series" that will revitalize the Gatorade brand:

it seeks to demonstrate that Gatorade can be used for more than hydration and nutrient replacement, and it is aimed more at teenagers

IV CRITICISM

The success of Pepsico has not been without controversy Despite putting a great priority on market research, Pepsico met various challenges and received harsh criticism for its goods

1 INDIA

Pepsico entered the Indian market in 1989 and has since grown to become one of the country's largest food companies The corporation was chastised for the quality and quantity of water used in their beverages CSE alleged in

2003 that Pepsico and other beverage firms were utilizing poisons that caused cancer and immune system breakdown When similar chemicals were discovered in soft drinks again, the Indian state temporarily prohibited the sale of Pepsi and Coca-Cola Farmers are also concerned that Pepsi manufacturing factories pollute the soil, creating environmental

contamination Pepsico has cooperated with many groups dedicated to water conservation in 2009 to rebuild its reputation in India.By resolving ethical quandaries, Pepsico must continue to consider diverse levels of governance

2 HEALTH

The nature of Pepsico's manufactured and sold goods generated health issues While America is growing more health aware, the key substances utilized in Pepsico's various products produced health risks As a result, Pepsi fought back by developing soda with minimal calorie and sugar content However, this just reduces the likelihood of obesity; there are still other risks such as tooth decay, caffeine addiction, and weaker bones Pepsico has also experienced regulatory challenges, with several

jurisdictions outlawing the selling of soda Revenue from bigger soda sizes was lost as a result of the restriction Despite the fact that the struggle may

be protracted, PepsiCo is developing measures to address these issues IndraNooyi, CEO of Pepsico, is ready and eager to grow into healthy food items and make big adjustments if needed Pepsico must carefully handle this ethical issue in order to balance the many stakeholders' interests

3 AQUAFINA TAP WATER

Aquafina bottled water, which advertised to use water from the faucet to fill the water bottles it offered, captured the public's attention in 2007 This was not ordinary tap water; it came from a public water source after going through various procedures to eliminate impurities Aquafina was accused

of being opaque in its business operations.Water bottles are facing criticism for the quantity of plastic they add to landfills in the tap water crisis Pepsico recently resolved a lawsuit alleging that promises concerning their Naked juices were false.Pepsi made a point of claiming that its juices are completely natural

V SOCIAL RESPONSIBILITY AND SUSTAINABILITY

PepsiCo has always displayed a commitment to organizational social

responsibility, highlighting the value of social responsibility.Performance with Purpose, the company's sustainability vision, aims to create long-term prosperity

by making investments in an improved future for people and the environment PepsiCo displays social responsibility and sustainability commitment through a variety of applications, among which are the PepsiCo Guiding Principles, commitment from staff members, the PepsiCo Organization, and the Dream Machine

1 PEPSICO GUIDING PRINCIPLES

Pepsico created the six guiding principles stated below to sustain its dedication to the community and its stakeholders:

- Show compassion for our consumers and the environment in which we live

- We provide only things we are extremely proud of

- Speak publicly and truthfully

- Strike the right balance between short-term and long term objectives

Achieve achievement through diversity and inclusion

- Respect people and work collaboratively to accomplish success

2 SUSTAINABILITY

Environmental responsibility is an important aspect of PepsiCo's

sustainability initiatives This involves "going green" through conserving water and minimizing trash, as well as lowering one's carbon impact Many initiatives and campaigns have been implemented to lessen the harmful influence on the environment, such as the introduction of wind turbine projects in India and Green plants in China PepsiCo has collaborated with the Nature Conservancy on a study on sustainable water usage and availability

PepsiCo used a 5R method to reduce its environmental impact: reduce, recycle, utilize renewable resources, remove ecologically sensitive goods, and promote packaging reuse throughout its activities PepsiCo, for example, has adopted lighter-weight container designs, sold starch derived from potato waste for paper-based products, begun utilizing more post-consumer recycled materials, and increased the reuse of resources such as shipping cartons

3 EMPLOYEE COMMITMENT

Another component of PepsiCo's social responsibility commitment is its support and dedication to employees Understanding workers is critical to success; PepsiCo wishes to foster a diverse corporate culture, as well as employee participation in the workplace and community To attract and retain world-class talent via employee satisfaction, PepsiCo must preserve mutual respect, honesty, and safety in the workplace To encourage employees to speak up, PepsiCo conducts a biennial organization health survey to solicit their feedback PepsiCo also offers a management course and a leadership skills course, as well as an annual ethics training program, workshops, and a 24-hour anonymous ethics hotline where employees can report concerns of ethical violation

4 PEPSICO FOUNDATION

The PepsiCo Foundation was founded in 1962 and makes charitable donations to a number of nonprofit organizations Through grants, employee initiatives, and disaster response and relief operations, the charitable organization gives back to the community

5 DREAM MACHINE

On Earth Day 2010, PepsiCo announced a multi-year deal with

Wastemanagement to promote the Dream Machine recycling initiative PepsiCo's Dream machine kiots function similarly to reverse vending machines; these devices are electronic receptacles that reward users for recycling their bottles The Dream Machine is a solution to address the obvious need for more public access to recycling bins while also promoting PepsiCo's environmental efforts

PepsiCo is the poster child for business success PepsiCo Incorporation is a multinational firm that specializes in meals and drinks and is often considered as the industry's leader PepsiCo's strategies are incredibly effective, providing the corporation with a competitive advantage over its competitors

PepsiCo is working to have a more equitable stakeholder orientation by recognizing significant stakeholders and comprehending and reacting to their problems and needs.PepsiCo has also demonstrated a willingness to invest in new health and environmental solutions, and has emerged as a key leader in the sustainability and social responsibility movement PepsiCo can strengthen its reputation as a socially responsible firm if it continues to learn from its failures

B ANSWERING THE QUESTIONS

1 HOW DOES PEPSICO BALANCE THOSE STAKEHOLDERS SUCH

AS ONSUMERS AND SHAREHOLDERS C INTERESTED IN GOODS TASTING PRODUCTS AND FINANCIAL PERFORMANCE WITH SPECIAL-INTEREST GROUPS AND REGULATORS THAT ARE MORE CONCERNED ABOUT NUTRITION?

PepsiCo has balanced the demands of many client segments by developing several brands for each targeted group To satisfy the majority of customers, PepsiCo must offer a diverse range of items that may be found in people's daily lives As a result, every single individual has at least sampled a PepsiCo product at some point in their lives

On the one hand, specializing in the Food & Beverage sector necessitates that every firm deliver good-tasting items that are suited for the great majority of consumers' tastes As a result, after PepsiCo has released several brands with good products that will please consumers, the number of PepsiCo items sold will expand dramatically, resulting in larger and higher profits The more their profit, the more they will satisfy their shareholders while also gratifying their customers PepsiCo, on the other hand, works in a sector where it is challenging to provide consumers with the healthiest food and beverages PepsiCo develops and distributes 22 brands of beverages and meals, the majority of which are unhealthy snack foods and sugary drinks Most of PepsiCo's snack items were processed and often deep fried, having large quantities of saturated fats, salt, and sugar - all of which are harmful to one's health, prompting regulatory agencies and health-conscious customers to pursue PepsiCo.Those who lack concern about wellbeing initially are harmed when they discover that things include substances that are harmful to consumers's health

However, the firm does all necessary to obtain good nutrition outcomes and aims

to offer a line of nutritious food for certain interest groups such as those who wish

to lose weight or just eat healthy food PepsiCo has decreased the amount of sugar, fat, and other unhealthy substances in its products The firm also pays health officials to examine what components are healthy enough for the snacks it produces As a consequence, a non-caloric sweetener was developed that made

$100 million, allowing it to fulfill both the financial and taste demands of stakeholders

Ethical executives must seek to reconcile stakeholder interests, including those of society, who are concerned about the rising obesity and diabetes epidemic, and

investors, who are concerned about profitability and the company's financial survival While PepsiCo is ready and prepared to develop into healthy food items and make significant improvements, they faced criticism from investors in 2012 due to a fall in profit In this scenario, it is easy to blame the investors, who have a more short-term view of the issue, because it is usual for a firm to suffer financially in the near term while undergoing big transformation.Investors appear

to prioritize profits over societal good at first glance, but business ethics is rarely easy The investor has an appropriate, and even a moral responsibility to be worried about the organization's financial performance However, PepsiCo must still carefully manage this ethical issue in order to balance the many stakeholders' interests

PepsiCo, on the other hand, has stated that it would continue to try to serve its stakeholders by being quicker, stronger, and better

quicker: They grow quicker by outperforming the competition, becoming more consumer-centric, and increasing their investments

Stronger: They improve their capabilities and expenses; use sophisticated technology in their manufacturing technique; and invest in personnel and create an inclusive workplace culture to become a stronger, more cohesive PepsiCo Better: By incorporating a sense of purpose into their business strategy, PepsiCo promises to doing even more for our world and communities They are putting their worldwide reach and experience to use in areas where they can have the most influence on the environment: agriculture, water, packaging, products, climate change, and people

2 HOW EFFECTIVE DO YOU THINK PEPSICO HAS BEEN IN RESPONDING TO STAKEHOLDER CONCERNS ABOUT

NUTRITION AND SUSTAINABILITY?

PepsiCo, in my opinion, has done an excellent job of reacting to stakeholder concerns about nutrition and sustainability

In terms of nutrition, people are becoming more health conscious and prefer low-calorie, low-fat, and natural foods over processed sugary and salty foods, whereas most PepsiCo products are processed and contain high amounts of sodium and sugar, as well as being highly caloric and fatty.PepsiCo has taken this matter into consideration after hearing the customer's complaints.Initially, Pepsi fought back

by developing drinks with reduced calories and sugar content, but after learning that this may still harm people's health, they had great success with sodas with zero calories and natural and organic sweetness Second, rather of deep-frying