Case : STRATEGIC CHOICES

Assignment Overview

The Case in this course is an ongoing exercise, meaning that we will continue to review one company over the course of our four modules. In Module 3, we will be conducting a strategic analysis of Pepsico.

Specifically, the Module 3 Case requires that you identify the primary business strategy employed by Pepsico. You will also be providing a critical, written analysis evaluating that strategy in the context of the strengths, weaknesses, opportunities, and threats you identified in Module 2.

Required Reading

Refer to the required and optional readings related to strategic choices, the theme of Module 3.

Case Assignment

In a 6- to 8-page paper, respond to the following:

1. Which of the four generic (Porter) strategies does Pepsico follow, and how do you know?

2. Integrate the strategy you have identified above with the strengths, weaknesses, opportunities, and threats you identified in Module 2 (this exercise should provide you with some specific actions the company should be taking relative to its strengths, weaknesses, opportunities, and threats. These actions are referred to as "strategic choices").

Do Pepsico's strategic choices align with the firm's generic strategy? If not, what are the specific points of disconnect? Think critically about this step, as no company achieves perfect alignment of its strengths, weaknesses, opportunities, and threats with its chosen strategy. As the MBA, it is your job to uncover the discrepancies and problems.

3. How can Pepsico leverage its strengths and shore up its weaknesses by altering its strategic choices? How can the company take advantage of environmental opportunities and minimize environmental threats by altering its strategic choices? Be specific.

4. Complete the paper by commenting on how your view of Pepsico's vision and mission has changed or has been reconfirmed by this process of strategic analysis. Would you make any suggestions to revise the company's vision, mission, or values statements, or to any of its goals/objectives?

5. Consider the Case as a formal business report that you are developing for the Board of Directors and CEO as Pepsico's consultant. This is a professional document. Follow the format below:

· Executive summary: This is a synopsis of the main points, conclusions, and recommendations made in the longer report.

· Introduction: State the main purpose of the paper (thesis statement), what you hope to accomplish, and how you will go about doing it.

· Main Body: The "meat" of the paper. Emphasize analysis, not just description. Delineate separate topics or sections with headings.

· Conclusion: Summarize your paper in light of your thesis statement.

Assignment Expectations

Your paper will be evaluated using the grading rubric.

Module 3 - SLP

STRATEGIC CHOICES

Wonder Company Simulation - CVP Analysis

Simulation

In Module 3, you will use CVP analysis to inform the pricing of your three products.

SCENARIO CONTINUATION:

You have now completed SLP2, and the date is (once again) reset to January 15, 2017.

You turn on the TV. The local television news anchor is talking about events that occurred on January 1, 2013.

Your decision-making process will be different this time, as you will be using CVP analysis, a technique with which you recently became familiar.

You analyze the results of the decisions you made in SLP2. But this time, you aim to improve your Final Total Score by using the CVP Calculator to help you determine a new and improved strategy.

You analyze your SLP2 results using CVP and develop your complete four-year strategy, again taking notes, documenting your reasoning.

You finish the report that shows your revised strategy for the next four years.

Do not run the simulation yet. Simply turn in your written report.

Session Long Project

Write a 6- to 7-page paper, not including cover and reference pages, in which you use the results from SLP2 and CVP analysis to develop a revised strategy.

Keys to the Assignment

The key aspects of this assignment that should be covered and taken into account in preparing your paper include:

1. The revised strategy consists of the Prices, R&D Allocation %, and any product discontinuations for the W1, W2, and W3 tablets for each of the four years: 2013, 2014, 2015, and 2016.

2. You must present a rational justification for this strategy. In other words, you must provide clear and logical support for your proposed strategy using financial analysis and relevant business theories.

3. Use the CVP Calculator and review the PowerPoint that explains CVP and provides some examples.

4. You need to crunch some numbers (CVP Analysis) to help you determine your prices and R&D allocations.

5. Make sure all of your proposed changes are firmly grounded in CVP analysis, on the financial and market data provided to you, and on sound business principles.

6. Present your analysis professionally, making strategic use of tables, charts, and graphs.

Time Line Summary:

SLP1

· 2016: Hired on December 31, 2016.

· Turned first report in to Sally on January 15, 2017.

SLP2

· Time Warp 1 begins: January 15, 2017. You are warped back to January 1, 2013.

· You realize you have to make decisions for 2013 - 2016, which you do.

· December 31, 2016 - You have gone through all four years, and you write your report to summarize how you did.

SLP3

· Despite your efforts in SLP2, you are once again taken back to January 1, 2013. You decide to use CVP analysis to revise the four-year plan you developed in SLP2. You analyze the results of your decisions from SLP2, taking detailed notes. You use the CVP Calculator to help develop your revised strategy, taking additional notes explaining the logic of your decisions.