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PepsiCo's Diversification in $2022$

This case is ideal for a module on corporate diversification strategies. The case teaches well because the majority of

students are likely to be regular consumers of PepsiCo's products. Class debate should center on whether PepsiCo's

diversification strategy has contributed to increased shareholder value. Analysis of the case data will lead students to

conclude that PepsiCo's top managers have built a fine collection of businesses capable of delivering impressive earnings

and cash flows. Students will recognize the success PepsiCo management has achieved in exploiting strategic fit

opportunities across business units, acquiring new businesses to strengthen the overall quality of its business line up$,$ and

increasing revenues and earnings in international markets. The issue in $2022$ is what further modifications to PepsiCo's

corporate strategy are needed to increase shareholder value.

Before completing these exercises, be sure to read the PepsiCo Case.

What strategic actions should PepsiCo management take to improve the corporation's financial and market performance? Should its

free cash flows be used to fund additional share repurchase plans, pay higher dividends, make acquisitions, expand internationally, or

for other purposes? What other strategic actions should be pursued by corporate$-$level management?

Select "yes" for those statements below that are accurate and choose $"$no$"$ for those that are not.

The company should accelerate its expansion of snack brands into rapidly growing markets located in Asia Pacific, Latin America, and

Africa, Middle East, and South Asia. Many of PepsiCo's products have universal taste appeal and become consumed widely outside of

North America.

PepsiCo needs to consider further internationalizing Gatorade and non$-$carbonated soft drink brands.

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PepsiCo should consider pushing Propel, Rockstar, and Aquafina into additional markets in Europe and Asia, the Middle East, and

Africa.

PepsiCo should consider divesting its Quaker ready$-$to$-$eat cereals, flavored grains, and other breakfast products because of low

industry growth rates.

The company should re$-$consider international growth and refocus on the North America business units.

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PepsiCo should utilize its free cash flows to support the ongoing $$2$ billion share repurchase program and dividend payments of

approximately $$5\mathrm{.}5$ billion.

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PepsiCo should reconsider growth opportunities due to an unstable economic forecast.