2-Year MBA With 15-Minutes in a Retail Outlet

2-Year MBA With 15-Minutes in a Retail Outlet

Expected Learning Outcomes

• Understanding overview of the critical success factors of PepsiCo India’s business architecture and discuss the role of all the constituents of the business architecture that would enable PepsiCo India to walk the last mile
• Discuss and debate on PepsiCo India’s Chairman and CEO, D. Shivakumar’s retail success mantras for its Indian retail competitive edge

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PepsiCo India’s Beverages and Snacks Business: The Business Architectur

1. PepsiCo India Chairman and CEO, D. Shivakumar (Shivakumar) advocates to “Disaggregate the business model and think different and focus on disrupting the status quo of the market before competition does it, to drive consumption”

a) What according to you is PepsiCo India’s Business Model?

b) What according to you is the status quo of the soft drink market in India and how can that be disrupted? Can you give a few illustrations of disruption across the Indian soft drink business spectrum – products, distribution, place, customer, acquisition, etc.?

2. Of the following which one do you think is the most important critical success factor for PepsiCo India’s success and why?
a) Product                                                   b) Price
c) Place                                                       d) Promotion
e) Supply Chain Management                f ) Technology
g) Bottlers and Vendors                           h) Continuous Customer Engagement

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PepsiCo India’s Business, Competition and CEO’s Success Mantras

1. What according to you is the essence of the base article from the point of view of retail-driven business?

2. What do you make out of Shivakumar’s field visits (going to the retailers)? What message is he sending and what do these field visits mean for him, for the workforce, the vendors, channel partners and the customers?

3. In response to a retailer’s unique business practice, Shivakumar encourages customized solutions to drive consumption. What do you mean by customized solutions for a company like PepsiCo in India? What’s the relationship with bundling? What kind of changes do you think must be ushered in to institutionalize such practices?

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2-Year MBA With 15-Minutes in a Retail Outlet

This case flyer enables a discussion about PepsiCo India’s Chairman and CEO D. Shivakumar’s (Shivakumar) idea of disrupting the status-quo through innovative business models that entail retailers in its core strategy. This is one of the innovations that he advises to his team to accelerate the growth of sales. The factors like rise of health conscious consumers in India along with other demand fluctuations impeded the sale of fizzy drinks. Retailers can be very effective market researchers for procuring crucial data about the varying consumer trends to the company. Their role in distribution has to be redefined and refined to address the key challenge of increasing the volume sales of a product like carbonated drink.

The base article¹ articulates on the marketing tips offered by the PepsiCo India’s Chairman and CEO, Shivakumar to his team about making retailers a core of their strategy. This case flyer is effective in teaching Management of Channels in Sales and Distribution Management Course.

Expected Learning Outcomes

• • The critical success factors of PepsiCo India’s business architecture and discuss the role of all the constituents of the business architecture that would enable PepsiCo India to walk the last mile
• • PepsiCo India’s Chairman and CEO, D. Shivakumar’s retail success mantras for PepsiCo India’s Indian retail competitive edge

Positioning and Setting

This case flyer can be ideally positioned for:

• a) Channels of Distribution in Sales and Distribution Management Course – For understanding how retailer-led model can boost the sale of a fizzy drink like Pepsi in India

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Suggested Orchestration

Before the case flyer discussion in the classroom the students were suggested to read/view the following to engage themselves better in the classroom discussion:

a) Mark W. Johnson, et al., “Reinventing Your Business Model”, Harvard Business Review, 2009 – To understand what is a business model and what are its components?

b) View the video on YouTube, Nielsen CXO Perspectives: D Shivakumar, PepsiCo, www.youtube.com/watch?v=s5-d-UWO8_Y – To understand innovations in physical distribution, branding and other operations are not just important but are indispensable, especially for a brand like PepsiCo

The case flyer can be effectively discussed in the classroom under two segments, which would help achieve the two stated pedagogical objectives....................

The classroom discussion followed the below given process:

I. PepsiCo India’s Beverages and Snacks Business: The Business Architecture

The classroom orchestration started with a discussion on understanding the nature of soft drink/carbonated drink market/beverages industry. A basic understanding of the nature of the industry is very important to appreciate other business dynamics of this industry. Exhibit (TN)-I was analyzed to derive the nature of soft drinks market. It should, however, be noted that there can be points of comparative analysis, but these two set the basic nature of soft drinks market.

This section started by understanding the basic nature of FMCG industry. Exhibit (TN)-I was used to explain the same to the students..............

1. The important critical success factor for PepsiCo in India is the place or physical distribution and the strength of its supply chain management. To explain the general process involved in supply chain management, Exhibit (TN)-II was used. Even if the advertisement budget is high, if the demand forecasting and supply chain management (embedded with the technology) are ineffective, beverages that are largely volume driven get affected. Once this is done, the class moved on to understand the basic business model of PepsiCo’s beverage business. How does PepsiCo make money by selling a bottle of sweetened water mixed with some ingredients? This discussion was driven with the help of a Pepsi bottle. For this purpose, a crate of Pepsi bottles was arranged in the classroom and through a series of questions, analysis and discussion, the following business structure Exhibit (TN)-III was arrived at: ..................

Exhibits

Exhibit (TN)-I: Nature of Soft Drink Market

Exhibit (TN)-II: Supply Chain Management Process

Exhibit (TN)-III: Deriving PepsiCo’s Business Architecture

Exhibit (TN)-IV: PESTEL Factors and PepsiCo’s Performance

Exhibit (TN)-V: Rural Markets Come into their Own

Exhibit (TN)-VI: Generic Framework

Exhibit (TN)-VII: Framework to Understand Retail Manifestation of All Subjects