Case Essays

9100 Words Oct 1st, 2011 37 Pages
CASE: IB-84 DATE: 06/27/08

PEPSI COLA PAKISTAN: FRANCHISING & PRODUCT LINE MANAGEMENT

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In July 1991, Irfan Mustafa faced several dilemmas. As West Asia area vice president and chief executive officer of Pepsi Cola Pakistan Incorporated (PCI), Mustafa was charged with developing a strategy to grow share and profitability across PCI sales but focusing particularly on 7-Up. Pepsi Cola International had shifted focus to its global brands and, since acquiring 7Up International in 1986, had withdrawn all marketing and technical support for Pepsi’s local Pakistani brand, Teem. As a country manager, however, Mustafa was evaluated on profitability, and Teem was a profitable brand. Mustafa knew that he would need to make important
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Professor Wasim Azhar and Davina Drabkin (MBA ’03) prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 2008 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business.

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Pepsi Cola Pakistan IB84

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estimated $44 billion in retail sales. Net sales were almost $18 billion and net income was over $1 billion.2 In 1990, PepsiCo operated in three markets: • • • Soft Drinks: Pepsi Cola Company and Pepsi Cola International Snack Foods: Frito Lay Inc. and PepsiCo Foods International Restaurants: Pizza Hut, Taco Bell, and Kentucky Fried Chicken (KFC)

PepsiCo described itself as “first and foremost a growth company.”3 The company had a good year in 1990, demonstrating double-digit

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