PepsiCo Company Harvard Case Solution & Analysis

PepsiCo Company

Companies’ need to be more focused in operations management in order to produce and deliver goods and services that are up to the mark. The field of operations and quality management will always remain an important part for the success of any business. It serves as a theoretical base to encounter the real problems in the corporate world and thus it is a crucial part of the organization as well (Sweet, Franklyn, 1964). PepsiCo is the world’s famous brand and is known to be a leader in beverages and food products. Major brands of the company are PepsiCo beverages North America, Quaker foods North America, Frito-lay North America and PepsiCo international. Much of the brands in PepsiCo are more than hundred years old. The company is engaged in providing handy and convenient foods for customers.

Quality issues faced by the company:

The company stands out as a leader and achieved sustainable advantage but still the company has faced various problems regarding quality of products and services. PepsiCo is known to be one of the United Kingdom’s most well-known brands with respect to taste and quality of its products. Unfortunately, the company has faced several issues in the quality that resulted in great losses in terms of the reputation of the brand. The basic reason behind the problem was mismanagement in the quality control and inspection department of the company. Pepsi today stands as one of the most popular and well reputed brand but still such a well reputed and quality conscious brand failed to manage the quality of its famous brand Cadbury as there were several quality issues in the products of Cadbury.

Few years back, there was breaking news regarding PepsiCo that told the public that Pepsi was contaminated with pesticides that were dangerous for human health. The news was so shocking that it spread like a fire in the jungle. Contamination with pesticides was due to lack of attention and negligence of the quality inspection and operations management department of the company, and it affected the company in every term. The company had to bear significant monetary loss and loss with respect to brand image and brand trust as well (Ishikawa, 1985).

The news was deplorable and shocking for all the consumers worldwide because the company has built a very strong brand image, and it was one of the most trusted brands; therefore, consumers could never think of it what the breaking news conveyed to them. Because of this, other beverage companies got an opportunity to make their place in the market. Finding pesticides in Pepsi was shocking and as a result of this, Pepsi was banned in most of the countries globally. In addition to that, stocks in factories were seized, and the company was not allowed to take the stocks out of the company. These issues questioned the current management and practices that have been followed in the quality control and inspection department in Pepsi (Stephen, 1991).

Furthermore, the reliability, authenticity and accuracy of these practices were questioned and analyzed. Several other companies like Coca-cola were also in charge of finding contamination with pesticides in their beverages. The basic reason behind these contaminations was the poor sewerage treatment and industrial pollution. A test conducted by laboratory of monitory pollution revealed that the samples of Pepsi contained four severely dangerous pesticides that included: DDT, Chlorpyrifos, Lindane and Malathion, which were extremely dangerous for human health. In addition to that, number of pesticides found in the brand was almost 0.0180 mg per liter on average that is 36 times more than the limit given by EEC. Even though, the company always give importance to the maintenance and quality of the product but still severe quality issue were identified.

It is a fact that various machines were used for the cleaning and purification of water used in the manufacturing of Pepsi but still the contamination and residues of pesticides were found in the bottles of Pepsi. An investigation committee was setup to find out the root cause of the issue. The investigation committee has identified that the water used in the production of Pepsi was highly contaminated (Gilbert, G. 1992).

How does that company address quality?

After the damage in terms of money and brand image, the company has taken measures to identify the root cause of the problem to eliminate it. For the contamination of water, the company has installed various water purifiers in the factories and enhances the use of boiling water containers that boil the water and make it free from all the germs and bacteria (Hyde, 1992).

Furthermore, the company has taken every possible measure to ensure the safety in production with no compromise on quality in overall production and manufacturing process. Not only in quality but the company also focused on ........................

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