International Business Strategy and the Strategic Role of International Human Resource Management
Brief Overview of Pepsi Co. Middle East
Staffing Policies
Strategy for competing on the global market
Diversified Business Model
Three-channel distribution network
PepsiCo Leveraging its dominant position
How pressure for cost reduction and pressures for local responsiveness influence strategic choice
Brief Overview of Pepsi Co. Middle East
PepsiCo is one of the biggest and leading food and beverage corporations in the world. The company as of 2012 generated over 65 billion dollars in net revenues. PepsiCo has a diverse global portfolio of brands that consists of numerous flavorful brands of snacks. PepsiCo Middle East is one of the six segments from which the primary company generates its revenues. PepsiCo Middle East, which is included in PepsiCo Asia, Middle East and Africa (AMEA), encompasses all businesses that deal with beverage, food as well as snack in the Middle East. Whether individualistically or in tandem with third-party associates, PepsiCo AMEA creates, advertises, retails and deals out a number of well renowned PepsiCo products (PepsiCo Website, 2015).
These product brands include Doritos, Lay's, Cheetos, different beverage brands such as Mirinda, Pepsi, Mountain Dew, Tropicana and 7Up, and also different branded cereals and snacks (PepsiCo Website, 2015). With the evolution and development in technology and in the face of increasing pressures in the global market, PepsiCo has employed numerous different strategies and approaches to gain a competitive edge and also to grow and develop.
Purpose of the project
The main purpose of this study is to identify the strategy used by Pepsi Co. Middle East to effectively compete on the global market. The paper will also identify the staffing policy used within Pepsi Co. Middle East and make an assessment of the extent to which Pepsi Co. Middle East's staffing policy is aligned with its international business strategy. Lastly, the paper will also seek to show how pressure for cost reduction and pressures for local responsiveness influence strategic choice.
The paper discusses the main staffing policies followed by the strategies employed by PepsiCo Middle East to compete globally and a conclusion of the research project. Finally, the paper will offer a reflection of what went well during the project period, what went wrong during the same period and also what can possibly be undertaken different if a similar project were to be done yet again.
Discussion
Staffing Policies
A company's staffing policy is focused on the selection of employees and personnel who have the skills that are essential to undertake and perform a certain job. A staffing policy can be employed as a tool for cultivating as well as promoting the company's organization culture. In particular, a strong corporate and organizational culture can assist the company to execute its strategy (Sharan, 2006).
For international businesses, there are three major approaches and methods for staffing policies: the geocentric method, the ethnocentric method, and the polycentric method (Sharan, 2006). The current staffing policies employed by PepsiCo utilizethe polycentric approach, wherein the international business appoints a host country executive, together with a resident country executive, to offer mutual and/or individual support as needed (Kottolli, 2015).
The polycentric staffing policy employs and enrolls host nation residents or citizens to manage subsidiaries and divisions in their own nation, and parent nation residents for positions at head office or center of operations (Matthews, 2013). This approach is beneficial for PepsiCo as the corporation is pursuant of a localization strategy and line of attack. In addition, being an international business, the polycentric approach enables PepsiCo to minimize cultural narrow-mindedness as it has diversity in terms of its employees (Wach, 2014). In addition, this particular approach is less costly to execute as compared to implementing an ethnocentric policy (Sharan, 2006).
With regards to international human resource management the current staffing policies employed by PepsiCo are in line with the polycentric approach as the international business appoints a host country executive together with a resident country executive to offer support (Kottolli, 2015). This approach is beneficial for PepsiCo as the corporation is pursuant of a localization strategy and line of attack. In addition, PepsiCo employs different business strategies in order to have a competitive advantage or edge in the global market. These strategies include having a business model that is diversified with a strong and resilient presence in terms of beverage products as well as food products (Bailey, 2014). In addition, the business is also able to compete in the global market by using its distribution channels which take into consideration the features of the products and the needs of the consumers.
Strategy for competing on the global market
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