Divergent Business Strategies From Pepsi and Coke in Addressing Obesity

A number of years ago, Pepsico's CEO, Indra Nooyi (a Yale School of Management alumni), embarked upon a broad strategy to promote what she's called 'good for you' foods (or at least 'better for you' foods) by expanding the company's portfolio beyond just sugary soda and potato chips.  The strategy began even before she became CEO.  In fact, she's been pushing this strategy ever since arriving at Pepsico as a corporate strategist in 1994.  For example, she was instrumental in divesting the company of it's low-margin fast food chains (KFC, Taco Bell, and Pizza Hut, now known as Yum! Brands, Inc.), and pushed for acquisitions in this new direction, including buying companies like Quaker Oats (many argued the acquisition was an excuse to get its hands on Gatorade which rival Coca-Cola also wanted, but Ms. Nooyi argues otherwise).  Outside the U.S., she has acquired a yogurt manufacturer in Russia, for example.In 2011, she told The Wall Street Journal (see http://on.wsj.com/khwcXf) that the company would stop what she called the "scorched earth policy" of scrapping for a point or two of market share in the shrinking cola market."What's been happening in this category forever: we, Pepsi, would push like hell to get a program with the [retailer], we'd spend everything, and get a tenth of a point of market share," she said. "The next period, Coke would come along, push like hell, and gain a tenth. This was a zero-sum game. The cola category was profitable, but did...
Source: Scott's Web Log - Category: Diabetes Authors: Source Type: blogs