Pepsi 2014 Annual Report Download - page 41

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21
underperforming operations and assets; coordinating geographically dispersed organizations; managing tax
costs or inefficiencies associated with integrating our operations following completion of the acquisitions;
and other unanticipated problems and liabilities.
With respect to joint ventures, we share ownership and management responsibility with one or more parties
who may or may not have the same goals, strategies, priorities or resources as we do and joint ventures are
intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. In addition,
acquisitions and joint ventures outside of the United States increase our exposure to risks associated with
operations outside of the United States, including fluctuations in exchange rates and compliance with the
Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws, and laws and regulations
outside the United States.
With respect to divestitures and refranchisings, we may not be able to complete such transactions on terms
commercially favorable to us or at all. Further, as divestitures and refranchisings may reduce our direct
control over certain aspects of our business, any failure to maintain good relations with divested or
refranchised businesses in our supply or sales chain may adversely impact sales or business performance.
If an acquisition or joint venture is not successfully completed or integrated into our existing operations, or
if a divestiture or refranchising is not successfully completed or managed or does not result in the benefits
we expect, our business, financial condition or results of operations may be adversely affected.
If we are unable to hire or retain key employees or a highly skilled and diverse workforce, it could have
a negative impact on our business, financial condition or results of operations.
Our continued growth requires us to hire, retain and develop our leadership bench and a highly skilled and
diverse workforce. We compete to hire new employees and then must train them and develop their skills and
competencies. Any unplanned turnover or our failure to develop an adequate succession plan to backfill
current leadership positions, including the Chief Executive Officer, or to hire and retain a diverse workforce
could deplete our institutional knowledge base and erode our competitive advantage or result in increased
costs due to increased competition for employees, higher employee turnover or increased employee benefit
costs. Any of the foregoing could have a negative impact on our business, financial condition or results of
operations.
The loss of any key customer or changes to the retail landscape could adversely affect our business,
financial condition or results of operations.
We must maintain mutually beneficial relationships with our key customers, including Wal-Mart, as well as
other retailers, to effectively compete. The loss of any of our key customers could adversely affect our
business, financial condition or results of operations. In addition, our industry has been affected by changes
to the retail landscape, including increased consolidation of retail ownership, particularly in North America
and Europe, resulting in large retailers with increased purchasing power, which may impact our ability to
compete in these areas. Such retailers may demand lower pricing and increased promotional programs.
Further, should larger retailers increase utilization of their own distribution networks, other distribution
channels such as e-commerce, or private label brands, the competitive advantages we derive from our go-to
market systems and brand equity may be eroded. Failure to appropriately respond to any such actions or to
offer effective sales incentives and marketing programs to our customers could reduce our ability to secure
adequate shelf space at our retailers and adversely affect our business, financial condition or results of
operations. In addition, if we are unable to resolve a dispute with any of our key customers, or if there is a
change in the business condition (financial or otherwise) of any of our key customers, even if unrelated to
us, our business, financial condition or results of operations may be adversely affected. See also “Our
Customers,” contained in “Item 1. Business.”