Term Paper: Pepsico Training and Development

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PepsiCo Training and Development

PEPSICO TRAINING and DEVELOMENT

Company Overview

PepsiCo Incorporation is a leading global company that produces beverage, snack and food. The company brand includes Pepsi, Quaker Oats, and Frito-lay. Over the years, the company brand has become a household name in the United States, Canada, and the UK and in other 200 countries that the company is operating. The company brand stands for quality and PepsiCo has used its brands to achieve product differentiation and competitive market advantages. The company has also established regional brands such as Sabritas, Walkers and Gamesa. Independently and through contact manufacturers, PepsiCo markets and sell varieties of enjoyable, beverage and wholesome foods. Established in more than 200 countries, the company portfolio includes grain-based snacks, oats, rice, carbonated and non-carbonate beverages. While the company operates in several countries, the company largest operations are in the United States, Canada, the United Kingdom and Mexico. To maintain global leadership in the beverage industry, the management uses varieties of key indicators to monitor the company financial performances. Within the last 5 years, the company has enjoyed significant growth and record the increase in the net income from $5.6 billion in 2007 to $6.5 billion at the end of the 2011 fiscal years. (PepsiCo Annual Report 2011). Despite the financial growth that the company has enjoyed during the last few years, PepsiCo is facing stiff competitions with other beverages company in the United States and other beverage companies in other countries, which has become a challenge for PepsiCo Inc.

TNA (Training Needs Analysis)

One of the challenges that PepsiCo is facing within the global business environment is stiff competitions with other beverage companies in the industry. A major competitor of PepsiCo is Coca Cola. Typically, Coca Cola is ahead of PepsiCo with market capitalization of $169 billion while PepsiCo market capitalization is $107 billon. PepsiCo is also facing competitions with other beverages companies such as Dr. Pepper Snapple Group, and Kraft Foods Inc. All these companies are sharing the market shares with PepsiCo. (See Table 1).

Table 1; PepsiCo Direct Competitor Comparison

PepsiCo

Coca-Cola

Dr Pepper

Kraft Foods

Industry

Market Capitalization

8.70B

68.38B

1.89B

Employees

297,000

146,200

19,000

126,000

3.94K

Qtrly Revenue Growth

4.10%

5.90%

2.30%

4.10%

14.30%

Revenue

67.00B

47.16B

5.93B

54.88B

1.80B

Gross Margin

52.20%

60.54%

57.50%

34.70%

41.90%

EBITDA

13.09B

12.96B

1.24B

8.76B

Operating Margin

15.40%

23.43%

17.39%

13.29%

9.58%

Net Income

6.42B

8.72B

3.54B

N/a

EPS

4.04

3.76

2.73

2.00

0.86

P/E

17.00

20.00

15.05

19.29

20.00

PEG (5 yr)

3.46

2.36

2.14

1.59

1.65

P/S

1.61

3.62

1.46

1.25

1.28

Source: Yahoo Finance (2012).

With the stiff competitions that Pepsico is facing within the industry, the greatest challenge that the PepsiCo is experiencing is to maintain a long-term growth and profitability. While the company is performing well within the current marketplace, PepsiCo intends to main long-term growth and maintain the growth in profitability to increase the confidence of its shareholders. To achieve sustainable growth within the industry, employee training and development is a critical tool that the company could employ to achieve long-term growth. In the present competitive market environment where businesses have to deliver high quality products with low price and within a short period, product innovation is the strategy that PepsiCo could employ to achieve a global platforms. Essentially, the industry that PepsiCo is operating is highly competitive and to successfully compete in the market environment, the company needs to always introduce new innovative and high quality products into the market. Thus, implementation of modern and effective employee training and development is the strategy that could make PepsiCo to sustain sustainable long-term growth. Thus, employ training and development is the strategy that the company could employ to improve the quality of the product.

Fundamental objective of this report is to discuss the training and development strategy that PepsiCo could implement to achieve market advantages.

Training Objectives for PepsiCo Employees

Through training and development method that the report will present to PepsiCo Inc., the company will achieve the following objectives.

To assist employee to achieve their interpersonal goal and this should be achieved within 6 months after the training and development.

To develop the competency of employee in order to develop innovative products that will be competitive within the market environment.

To develop employee skills to produce high quality products that will make the company to record 30% increase in the net income within 12 months.

To develop employee skill and development that will assist the company to achieve long-term sustainable growth.

Training and Development Strategy for PepsiCo

In the contemporary competitive business environment, training and development has become valued components within modern human resources. Investment in human capital is positively related to the organizational performances. (Srimannarayana, 2011). Success of an organization depends on the competency and the skills of workforce, and to get competent workforce, organization needs to focus on employee training and development. Employee training and development not only enhance employee behavior, the training and development enhances job satisfaction, which translates to the organizational growth. (Qayyum, Sharif, Tariq, et al. 2012).

While the training might enhance the quality performances of employee, the scope of training and development varies from one organization to the other. Traditional training method has been implemented for several decades within several organizations. One of the traditional training methods employed by many organizations is Presentation Methods.

Presentation Methods: Training through presentation methods involves communication through the spoken words to impact knowledge on trainees .Typically, communication system in the presentation training method is one-way communication, which involves communication from trainer to audience. The major benefit of presentation method is that it is the least expensive of all the training methods and it could be used to present large amount of training instruction. It could also be used to train a large group of trainees efficiently and in an organized manner. More importantly, the presentation method is less time consuming and could be easily employed for a large group of employee. The information often presented in the presentation method includes problem-solving technique, process and facts or information. The method of presenting information to trainee includes lectures and audio-visual. The lecture method also includes standard lecture, panel and team teaching. Many organizations use presentation methods to enhance employee communication skills, and customer service skills. However, the presentation method alone is not suitable to train an employee required to carry out a highly skilled job. The presentation method needs to be combined with computer-based stimulation method before the training could be effective.

Another tradition training method is Hands-on Method

Hands-on Method: The hand-on method is the type of traditional training method that requires trainees to be actively participating in learning. Hand-on training method includes OJT (on-the-job training), stimulation, case studies, role-plays, behavior modeling and business games.

Many organizations use on-the-job training to assist new and inexperience employees to learn through observing peers, supervisors or managers. The strategy is to assist new employees to develop skills through imitating their behavior. on-the-job training include apprenticeships program. More importantly, on-the-job training could also be used to upgrade employee skills when new technology has been introduced in the company. OJT is also effective to cross-training employees within the work unit or department. OJT is also used for training and development when an organization transfers an employee to a new job.

An organization could derive several benefits from the OJT Hands-on Method. One of the advantages is that employees could learn at their pace. Organization could quickly get the feedback of the learning performance of employee. The training method is also convenient when an employee is on shift and schedules. Despite the benefits derived from the OJT Hands-on Method, the system embraces higher development costs and time. More importantly, a trainee must be motivated to learn before the system could be effective.

Simulations, Hands-on Methods: Stimulation is another traditional training method that assists employee to develop skills based on the real life situation. This type of training is suitable when an organization needs to develop the skills of employees on production and process. The method could also be used to develop management and interpersonal skills of employees. Stimulation is increasingly being used among the production companies. One of the benefits of stimulation method is that the system could be used to improve the competence of employee using the production machine. The system is also cost-effective since the training could be employed within organization environment. Steve (2011) argues that a "well-designed sales simulations allow sales reps to address real-world challenges while providing high impact to the company." ( P. 52 ). Typically, sales people are important strategic assets to organizations. In the contemporary competitive business environment, sales people should posses the skills to sell to enhance organization competitive advantages. Taking sales team to classroom to impact skills involves huge costs. The total costs are not the only costs of training, however, the total costs also consists of lost of time that could have been used to be in contact with real customers and brings sales to… [END OF PREVIEW]

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