Pepsicos strategies and problems confronted with merger with Quaker Oats

EXECUTIVE'S Conclusion:

A good authority can lead a business towards a bright future such circumstance is denoted below as PepsiCo being truly a mega brand in itself but additionally it is jeweled with a gem called INDRA K NOOYI.

CEO of PepsiCo who's leading the business toward the heights of success. The analysis below is approximately one of the important she earned the business that is "merger with Quaker oats".

Quaker oats being a big brand name in itself was merged with PepsiCo to be able to reduce your competition in the market and also to increase its market show and take the benefit for the reputation of the company.

All the strategies and the issues it faced during the merger and the result coming out of the merger.

Table of Contents


The company was proven in 1898 and its own headquarter is at New York

PepsiCo Inc. makes, markets, and provides various foods, appetizers, beverages in the whole world.

PepsiCo is a global head in beverages, food, snacks and home to hundreds of brands round the world. Some of the most popular products are Pepsi, Gatorade, Quaker, Frito-Lay and Tropicana.


Behind the success of PepsiCo there stands a star known as Indra. K. Nooyi.

In her long span of leadership she's continually shown transformational authority qualities.

Characteristics of your transformational innovator:

Create and articulate a vision

Foster a "buy in" of team goals

May or might not have charisma

Often inspire by expressing rational dependence on change

Display insight into possible solutions

Have the passion to effect a result of resolution

Seek to convert or change basic principles, beliefs, and behaviour of follower

Articulate a compelling eyesight of the future

Influence supporters by arousing strong feelings to get the vision

Cultivate follower approval of the mission

Have the ability to develop great symbolic ability with which follower would want to identify

Serve as mentors to fans. (Vadim, 2001)

And these characteristics and characteristics aren't possessed by all humans; they are blessed to a few only

An ideal exemplory case of such a head is:


A story in herself, she actually is one of the most successful females of the period. Not every head can successfully implement change, change is a very crucial matter to take care of and take care of.

Role of the leader is to assist in change that results in better performance. (Stevenson, 2008)

She is behind the unlimited success of PepsiCo.

She signed up with PepsiCo as the mature vice president of the proper planning team in 1994 and after that she do the quest and made it to the position of C. E. O through her control qualities.

She required the command line as a C. E. O 3 years ago and with her introduction as a C. E. O PepsiCo sparkled with the organization mission of "performance with goal" to be able to move on as well as financial success and interpersonal responsibility.

PepsiCo's focus on sustainability of environment is a lot more appropriate than ever after the arrival of Nooyi as going green is actually helpful in saving money.

During her long span of leadership she has not modified her authority style as she feels that the tomorrow's market leaders will need to have different skills from those of past.

It includes:

Capability to work carefully with people.

To exhibit psychological intelligence towards employees. (GROUP, n. d. )

Literature review:

Change management:

Change management is an prepared approach to transitioning a person, group, and company to the advanced future stage from present. It really is targeted at empowering employees in order to declare and hold changes. (Hiatt, 2010)

Change is the demands of the era, as the changing times is moving on and on changes are needed to be done in order to in the competitive world.

Changes can be done in virtually any area, anticipated to any reason, but it can be for good as well for bad.

Changes are not always successful and neither is there any single perfect solution or method for it. (Fillicetti, 2007)

Why change?

The environment is changing swiftly due to which the need for change is also increasing day by day, main factors for change are:

New technology:

Global economy

Changing market requirement

Intense domestic and international competition

New opportunities and risks for leadership

Customer demands

Change is one of the very most influencing factors in an organization who wants develop. Actually in order proceed from others change is a must thing to go for. (Cameron & Green, 2004)


Plan do check action model:

Also called PDCA model it means undertaking change. equally a circle has no end and really should be repeated again and again for ongoing improvement.

Plan: plan for changes to bring about improvement

Do: changes on a tiny size to try them

Check: to see if the changes are working and to research selected processes

Act: to get the greatest advantages from changes. (ABE, UK, 2010)'

Changes should be integrated in this way to be able to get success.


Source: http://www. flickr. com/photos/david_jones/3350260757/





UNFREEZE: this is the first level of the model where in fact the need of change is accepted and the business is ready for the change.

This is the most challenging stage as the business is compelled to simply accept the change if indeed they doesn't want also they need to understand the necessity of change and recognize it.

As it is very difficult to break people and change their way to do or culture where they used to work

TRANSITION (CHANGE): in the 2ND level people start recognizing and behaving in the new path and begin looking for new means of doing things. This differ from unfreeze to change doesn't take place overnight but it requires time to happen and people start thinking in it.

REFREEZE: this is actually the final stage of the model where the change start taking shape which is made sure that the change is utilized properly atlanta divorce attorneys day's work.

The indicators of the refreezing stage are stable group chart, constant job description etc. it's very necessary to observe the change also in order to boost the morale of employees. (Ritchie, 2006)

This model was used by Nooyi for the changes she released in PepsiCo




Determine the needs for change:

The dependence on the change was named the business was facing trouble regarding the difficult competition of coca cola. It had been continuously heading down compared to coca cola.

And it was limited to the soda pops only and needed to expand all of the products it provides.

To raise the market share

These were the needs and the management was also well informed and in support of the change hence the employees were conveyed the meaning in order they can make themselves for the change.


The changes were organized and implemented and the employees were up to date and prepared in advance for the changes made. The questions and confusions were cleared by the bigger government bodies and the employees were determined to become more interactive in order to know the issues and solve them early on. As the firms were merged and the employees have to simply accept the new ways and culture to be able to make it through in the organization.


Both the companies went through a great success with the increasing market show and more sales leading the drink industry in terms of providing both carbonated and non-carbonated beverages along with the variety of appetizers. Which made the both the company satisfied and accept their culture and ways. Both companies complemented each other well and the change made was a great success.

And PepsiCo is celebrating its success under the information of Nooyi. (Ritchie, 2006)



In order to supply the customers with an increase of healthy products PepsiCo employed the official from world health organization to keep a watch on the merchandise. Ways to reduce sodium from potato chips has already been found. (Kanter, 2010)


To maintain the connection between business and culture Nooyi came up with the idea of relationship with the throw away management Inc. in order to create recycling equipment for consumers to deposit cans and containers. (Kanter, 2010)


Consequences before merger:

There were a lot of problems before the merger and the merger experienced a great deal difficulty to get approved:

FTC Agreement:

Finally the long hang on of PepsiCo was over with the authorization of FTC:

FTC (federal trade commission rate) finally provided the green sign to PepsiCo to go ahead after the division in the thoughts and opinions of its customers where 50% voted in favour and 50% against. This is the committee placed to check the impartiality in the deal but because of the division the exploration was terminated and the offer was allowed to proceed. (Amonkar, 2005)


FTC staff experienced objected to the merger since:

According to them this type of merger will damage the competition from the marketplace; they believed that merger will damage the competition presenting the whole vitality in the hands of PepsiCo.

Monopolistic situation will be created presenting an edge to Pepsi, the key disadvantage which is the power to select on the rates which in turn causes taking benefit of the customer due to the absence of choice. (Amonkar, 2005)


It will effect into much better market position of PepsiCo.

Higher limit of income over $25 billion.

Gatorade the key sports drink should come under PepsiCo causing in to the competitive benefit in noncarbonated refreshments over coca cola.

PowerAde the non-carbonated drink of coca cola has only 15% of the market share while Gatorade covers 80%.

Position of PepsiCo will be consolidated in the ready to eat section.

Quaker's variety of products will add much more variety to the PepsiCo's products. (Anon. , 2001)


Benefits to both companies:

PepsiCo is highly benefited from the merger and Quaker also being a mega brand in itself but merging with an organization like PepsiCo strengthens its position even more as thirsty people will either go to the carbonated or non-carbonated refreshments and now they have got the command line to both parts and therefore to that your company will be retaining both the customer bases.

Gatorade has its monopoly in the sports activities drink segment so that it will rather raise the sales of PepsiCo's other fast food since beverages and junk food complement the other person well. PepsiCo will be highly benefited by the benefit of being the major provider as it could control the costs and monopolize the marketplace as well. (Amonkar, 2005)

PepsiCo can expand its limitations from just carbonated drinks to fruit refreshments and Quaker being truly a mega brand is good for the trustworthiness of the company and at the same time it reduced competition as Quaker being a part of PepsiCo will sell its products alongside one another. (Anon. , 2001)

PepsiCo had a huge profit by continuous increasing revenues since the merger.


Change agent is the main one who is accountable for all the changes brought in the organization or it can be defined as:

"The individual, organization, material or anything which serves as a catalyst to improve in an company" (ANSWERS. COM, 2010)

In conditions of business it can be defined as the individual who's chosen to bring out change within an organization. And in cases like this the agent for all your changes in PepsiCo is the C. E. O of the business "Indra K Nooyi". She is behind all the changes manufactured in the company. Like mentioned above she unveiled the healthy and environmentally friendly products.

She also tried to build a romantic relationship with the culture by engaging in a collaboration with the waste material management Inc. in order to supply the people with recycling kiosks so that they can put bottles and cans within it and you will see more energy saving. Along with these a she jeweled the business with Quaker oats and its own products by taking the decision of experiencing merger with the business. (Venugopal, 2007)


Resistance is the effect of folks when they are imposed to change.

Some leaders feel that amount of resistance is bad but there may be nothing at all bad in level of resistance plus its the image of improvement and change, it indicates that you are moving towards change, level of resistance is not level of resistance to change actually however the fear of burning off the old culture and position quo. (Brenner, 1998)

During the PepsiCo Quaker oats merger a large objection was made and the merger was highly compared by the federal trade commission, these were against this change as they believed that change will damage your competition from the market and generate a monopolistic scenario in the market and present PepsiCo an power to PepsiCo in slicing deals with stores.

But finally FTC has to move on with the change by splitting of views in the committee that was set to discover the fairness of the offer. (Gordon, 2001)


Mergers and acquisitions are good but as it is stated every coin has its two sides just like that on one hand if smaller organizations may survive by merging themselves into the larger organization,

On the other hands more and more mergers can end result into no competition and monopoly which is often unsafe for the world.

Just like PepsiCo do to be able to kill your competition and increase its market share it merged with Quaker oats so that it cannot only gain the great things about its reputation and name but also reduce competition and also gain the competitive gain over its biggest rival coca cola.

As it is said:

"If u can't defeat your enemy, become a member of him. "

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)