Research Paper on Business Logistics: A Key to Successful Operations & Profitability

Introduction

When the term "Business Logistics" gets mentioned, what it should mean is; a group of activities that have some relationship and get involved in the storage and movement of information and products (Min & Mentzer, 2004). The move is from raw material to the final consumer and goes further to recycling and disposal. Logistics management has a crucial role to play in the success of any company's operations. Also, logistics management directly impacts a business's bottom line and has a significant influence on customer satisfaction (Stank et al., 2008). This paper targets to discuss business logistics related to PepsiCo.

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PepsiCo

PepsiCo, having headquarters in New York, United States, is among the most substantial snacks and beverage Food businesses worldwide. The PepsiCo's 2002 annual report showed its dominance in the US beverage markets and even foreign markets. The table below illustrates the 2002 PepsiCo achievement.

PepsiCo's Vision and Mission

Mission

To generate more pleasure with every bite and sip:

• To clients- by making ecstatic instants through their nourishing and delightful products and exceptional brand proficiencies.
• To clienteles- by becoming the top partner, creating innovations, and raising growth standards that do not match their industry.
• To the community- by creating meaningful working opportunities, promote new abilities and build experienced professions, and an inclusive and varied working environment.
• To the planet- by natural resource conservation and to foster a suitable and sustainable world for the later generation.
• To stakeholders- by providing a bearable top-tier TSR and incorporating best-in-class trade control.

PepsiCo's Vision

To be the international spearhead in available beverages and nourishments by wining with determination. This vision echoes on PepsiCo's motivation to have sustainable success in the market place and speed up its topline growth.

PepsiCo's Brief History

Donald and Lay, the CEOs of Pepsi-Cola and Frito-Lay respectively, identified "A marriage Made in Heaven," a sole corporation involved in the conveyance of perfectly-salty snacks distributed alongside the earth's best Cola in the year 1965 (Dhar et al., 2005). The two came up with a vision that led to the world's first beverage and food enterprise, PepsiCo.

More than 50 years later, life routines, fashions, and tastes have transformed. However, PepsiCo has shown evolvement with the changes. Today, PepsiCo is respected globally, with its foodstuffs distributed in more than two hundred territories and states. PepsiCo manufactures more than twenty-two brands that make approximately $ 1 billion annually in retail auctions.

PepsiCo's Segmentation, Positioning and Targeting

Segmentation is the process of subdividing a population into groups based on pre-identified characteristics, whereas targeting means pinpointing specific groups chosen from segmentation for product sale. Positioning is the assortment of the market mix most appropriate for the target customer segment.

PepsiCo applies a multi-sectional mode of arrangement and its aims at more than a single customer segment with different service packages and products at the same time. For example, Pepsi- Cola's positioning inclines on soft drinks that are good-tasting and have a pleasant refreshing impact. However, Pepsi-Cola products contain too much sugar, and their positioning does not target customers with health complications from consumption of carbonated soft drinks. To solve this issue, PepsiCo delivers Diet Pepsi, made as a carbonated drink containing little sugar paralleled to Pepsi-Cola. The representation below shows PepsiCo's dissection, positioning, and targeting.

PepsiCo's Competitive Advantage

PepsiCo applies cost leadership as the chief generic competitive policy. The strategy centers on cost reduction as a method of improving the overall competitiveness and financial performance of PepsiCo. Example, to pose competition to Coca- Cola products, PepsiCo bids low prices centered on less cost of operation. The PepsiCo's primary strength is in Brand equity. PepsiCo lays a large customer base and a sharp image. Brand equity not only helps the company in product and brand marketing but also helps in customer retaining.

PepsiCo's Functional Departments

The organizational structure of PepsiCo has experienced numerous changes to advocating for the changing market conditions globally.

Marketing Department

Currently, PepsiCo is implementing changes in its marketing department to include new roles to assume a more global style. The marketing department deals with issues such as brand advertisement and promotion, identification of new market gaps, reporting to the management about the progress on in the product market, and giving feedback about customer satisfaction and needs.

Finance Department

The PepsiCo's finance department handles some the following departmental duties;

Financial planning and forecasting- the department estimates the business requirements of the company, such that no inadequacy or excesses occur. It also analyses resource allocation patterns. Expenses experienced in the PepsiCo company range from raw materials, assets acquisition, labor charges, etc.

Acquisition of funds- the department analyses the most appropriate source of funds, looking at the pros and cons, resolving credits, etc.

Cash management- ensures that the company maintains its creditworthiness.

Operations Department

The department engages in the following five strategic decision fields:

Services and product design- the fundamental interest in this area is to bout services and products, market demand, preferences, and organizational capacity.

Quality management- this area has the aim of improving quality based on user and business anticipations.

Location strategy- PepsiCo owns many company facilities in different strategic locations. In this field, the focus is to reach the target market maximally. PepsiCo has situated these facilities close to most retailers.

Process and Capacity design- this strategy emphasizes on process efficiency and capacity utilization. PepsiCo's aim is maximizing its productivity-cost ratio in these locations. Example, PepsiCo has automated most of its production processes for optimal efficiency

Layout Design and Strategy- the primary concern in this strategic area is the efficient movement of materials and people. PepsiCo has designed spaces with productivity and efficiency in mind. Ethics of total quality management (TQM), and assembly-line manufacture guide PepsiCo's layout design.

Conclusion

This paper analyses PepsiCo as one of the most prominent and high ranking food and beverage companies in the world. Different features discussed in the document give a clear description of how significant companies operate. The paper has not exhausted every detail concerning PepsiCo, hence the need for broader research.

References

Dhar, T., Chavas, J. P., Cotterill, R. W., & Gould, B. W. (2005). An Econometric Analysis of BrandLevel Strategic Pricing Between CocaCola Company and PepsiCo. Journal of Economics & Management Strategy, 14(4), 905-931.

Mentzer, J. T., Stank, T. P., & Esper, T. L. (2008). Supply chain management and its relationship to logistics, marketing, production, and operations management. Journal of business logistics, 29(1), 31-46.

Min, S., & Mentzer, J. T. (2004). Developing and measuring supply chain management concepts. Journal of business logistics, 25(1), 63-99.