What “grade” would you give Ms. Nooyi for her job performance as a strategic leader? What are her strengths and weaknesses? Where would you place Ms. Nooyi on the Level-5 pyramid of strategic leadership and why?
According to me, Ms. Indra Nooyi deserves a B at the moment. As the CEO, she possesses the knowledge of the company’s capabilities and resources and therefore is able to determine how the external environment affects them. Therefore, Ms. Nooyi’s corporate decisions to restructure and diversify PepsiCo have created an avenue for the company to explore more opportunities in the food and beverage industries. Additionally, the decisions have had an impact on the way the company is perceived thus gaining a competitive advantage. Despite her achievements, Ms. Nooyi’s strategic objectives rely upon being a corporate citizen. Additionally, it is uncertain as to whether PepsiCo’s performance is in line with CSR. Particularly, the results so far do not represent a clear competitive advantage in comparison with other major players in the food and beverage industry. The company requires more result oriented business strategies in order to withstand the market challenges that PepsiCo is competing in and guarantee high performance.
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Regarding the level-5 pyramid of strategic leadership, Ms. Nooyi deserves to be located at or very close to the top of the pyramid. With her exemplary informational, social, and decision making skills, Ms. Nooyi deserves to be amongst the executive and effective leadership at the top of the pyramid. Additionally, through her humility and willpower, she has shown exceptional leadership skills by steering the company towards setting and achieving the company’s goals.
The first few years after Indra Nooyi took over as PepsiCo CEO and implemented performance with purpose, the Company underperformed its archrival CocaCola Co. by a wide margin. What should a strategic leader do if his or her vision does not seem to lead to an immediate (financial) competitive advantage? What would be your top three recommendations? Support your arguments
It is the concern of every leader when a company is recording poor performance. As a strategic leader, it is important to conduct an analysis to determine what is affecting the company’s competitive advantage as well as find out the cause of underperformances. Firstly, I would recommend the use of scenario planning. The strategy allows the strategic leader to analyze the different cases whose types of products can be altered and weigh how different changes influence the fiscal performance of the organization. Secondly, I would encourage the leader to synthesize both external and internal input resources and generate a strategic vision that portrays the different sections the company needs to modify and how the adjustments will assist in the financial growth of the company. Lastly, the company should offer consumers a variety of services that are not yet presented by competitors such as Coca-Cola through offering discounts, shopping vouchers, and other forms of promotion ("PepsiCo's 22 Billion Dollar Brands In Detail", 2018) . Consequently, the strategy will assist in differentiating PepsiCo from other players in the market.
Do you agree with Indra Nooyi’s philosophy that “performance are intimately linked and you can’t do one without the other?” support your argument
Ms. Nooyi’s philosophy is absolutely right. The two are dependent on each other. On one side, performance is reliant on purpose. That is, it is with a purpose that one is able to achieve desired levels of performance. Therefore, the lack of purpose implies that performance is absent. In fact, there will be completely of no importance to perform well, and yet there you lack a purpose. On the other hand, for one to attain his or her purpose, it is necessary to perform. Therefore, defining a solid purpose enables accountability of an individual when performance is in question. Overall, lack of purpose leads to failure in performance and vice versa.
PepsiCo’s vision of performance with purpose as defined by Ms. Nooyi entails three major parts: (1) h uman sustainability, (2) environmental sustainability and (3) the whole person at work. The trio defines a purpose that attracts an individual who values caring for the environment as well as the product. At the same time, it encompasses a wide range of people to a part of the company rather than distancing themselves.
PepsiCo’s investors require the company to grow about 5 percent or $3.5 billion a year. PepsiCo’s top line, however, remained flat for the last few years. Where would future growth for PepsiCo come from?
Although PepsiCo vision of Performance and Purpose has been an assuring long-term strategy, it is more beneficial to the customer than the investor. The shareholders are more inclined to see a better performance in terms of increment in their investments and also improvement of the company’s competitive advantage. Therefore, the company needs to employ a precise short-term profit generating strategy to appease the investors and escape a scenario where investors cash out ("PepsiCo Announces Strategic Investments to Drive Growth", 2018) . Firstly, from the mini case, the company foresees a huge prospective market in the manufacturing of healthier merchandise. The reason is that the healthy-conscious market is growing drastically while that of the unhealthy product is decreasing. I believe that PepsiCo is bound to be more profitable if the company invests in healthier products line. Moreover, since it is becoming evident that consumer is increasing preferring drinking of bottled water, this presents a viable opportunity which the company can invest in both in the domestic and international markets. Overall, PepsiCo should continue to innovate so as to increase their competitiveness and at the same time enter new markets.
References
PepsiCo Announces Strategic Investments to Drive Growth. (2018). Retrieved from http://www.pepsico.com/live/pressrelease/PepsiCo-Announces-Strategic-Investments-to-Drive-Growth02092012
PepsiCo's 22 Billion Dollar Brands In Detail. (2018). Retrieved from https://www.suredividend.com/pepsicos-22-billion-dollar-brands-future-growth/
