Pepsi 2013 Annual Report Download - page 10

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PEPSICO
8
PEPSICO
The Structural Cost Benefits and Global Capability.
Beyond what the customers and consumers see on the
shelf, our business model drives structural cost benefits of
$800 million to $1 billion across PepsiCo globally each year.
These financial benefits are achieved through regional
scale cost leverage obtained through procurement, supply
chain, go-to-market and selling functions, and G&A. We
also see significant financial benefits and savings from
having corporate functions integrated globally, such as
Global Procurement, R&D, Human Resources and Business
Information Services.
Looking beyond direct cost savings, these global platforms
create capability advantages for us across the entire value
chain. For example, our global marketing capabilities
allow us to increase the share of dollars that go to working
A&M, facilitate the sharing of sports and talent properties,
and enable “lift and shift” of brand-building models. With
a global R&D function, investments made are leveraged to
drive innovation across both foods and beverages.
How We
“Future-Proof”
PepsiCo:
Performance
with Purpose
I began this letter by talking about our focus on two
goals: delivering on the short term while investing for the
long term. One of the great balancing acts as CEO is to
manage for both level and duration. And I believe any CEO
should be able to answer the question “How are you future-
proofing your company?”
As the operating environment has become more volatile
and complex, this is a tall order. But I firmly believe that
the goals we articulated in 2007 under Performance with
8