PEP » Topics » In November 2007, PepsiCo announced a new organizational structure. What drove this decision, and how will the restructuring impact financial results?

This excerpt taken from the PEP 8-K filed Apr 7, 2008.

In November 2007, PepsiCo announced a new organizational structure. What drove this decision, and how will the restructuring impact financial results?

Given our robust growth in recent years, we felt it was time to manage the Company as three units instead of two — both to allow us to sustain our growth rate and also to develop global senior leadership talent for PepsiCo’s future. We therefore created three operating business units: PAF, PAB and PI.

We are confident this organizational structure will help us deliver strong top-line performance and profit growth for the following reasons:

 

   

Each sector has significant scale and growth potential, operates across multiple geographies, and is comprised of both developed and developing markets;

 

   

This facilitates our ability to leverage both capabilities and innovation between our international and North American businesses;

 

   

With each sector being of significant scale, more executives will have the opportunity to run large operating businesses and gain global operating experience; and

 

   

It enables us to extend the competitive advantages of our very successful Power of One initiatives by making them increasingly global.

Finally, investors will receive more granular international performance data, as we will report volume, revenue and operating profit for six PepsiCo segments, versus four in the previous structure.

This excerpt taken from the PEP 10-K filed Feb 15, 2008.

In November 2007, PepsiCo announced a new organizational structure. What drove this decision, and how will the restructuring impact financial results?

 

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Table of Contents

Given our robust growth in recent years, we felt it was time to manage the Company as three units instead of two — both to allow us to sustain our growth rate and also to develop global senior leadership talent for PepsiCo’s future. We therefore created three operating business units: PAF, PAB and PI.

We are confident this organizational structure will help us deliver strong top-line performance and profit growth for the following reasons:

 

 

 

Each sector has significant scale and growth potential, operates across multiple geographies, and is comprised of both developed and developing markets;

 

 

 

This facilitates our ability to leverage both capabilities and innovation between our international and North American businesses;

 

 

 

With each sector being of significant scale, more executives will have the opportunity to run large operating businesses and gain global operating experience; and

 

 

 

It enables us to extend the competitive advantages of our very successful Power of One initiatives by making them increasingly global.

Finally, investors will receive more granular international performance data, as we will report volume, revenue and operating profit for six PepsiCo segments, versus four in the previous structure.

EXCERPTS ON THIS PAGE:

8-K
Apr 7, 2008
10-K
Feb 15, 2008
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