Cash Flow Productivity at PepsiCo: Communicating Value to Retailers Harvard Case Solution & Analysis

PepsiCo developed a brand new metric that quantified the value added by Pepsi products than did the conventional metric used by retailers to discover shelf space and promotional activity, gross margin. The new metric, cash flow productivity, captured the value of Pepsi's Direct-Store-Distribution (DSD) service and the strong attraction of its nationally advertised brands.

Pepsi managers believed that their full service supply service saved customers their strong brands and money generated sales and more traffic, but that this added value was, appearing just at gross margins, missed by most retailers. Pepsi supervisors fought to craft a strategy that will convince retailers to adopt cash flow productivity as a metric for making merchandising decisions in their own shops.

PUBLICATION DATE: March 28, 2011 PRODUCT #: 111069-PDF-ENG

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Cash Flow Productivity at PepsiCo: Communicating Value to Retailers

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