Introduction

Pepsi & Coke, a Total Quality Management Perspective


Shanza Javaid MB-09-52 Salman Saeed MB-09-82

Mehak Munir MB-09-30 Aasfer Javed MB-09-62

Qurat-ul-ain Raza MB-09-22 Abdul jaleel MB-09-68

Ali Zain Raza MB-09-18 Anum Noukhez MB-09-78

Salman Saeed MB-09-82 Sania Ijaz MB-09-100

Mavra parvaiz MB-09-10 Kamran Chohan MB-09-110

Submitted To Mr. Ahmed Nabeel

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Executive Summary

This report is a detailed step by step description of the processes at Pepsi and coke. It outlines the

practices and standards followed at both the beverage giants. Starting from their introduction,

carrying through the processes and ending finally on a description of the traditional rivalry. The

report carefully examines and describes the implementation of standardization in the production

facilities. Images from a personal visit reflect the details of operations and quality management

that is carried out through both the organizations.

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Acknowledgement

Let not any mention be made in terms of acknowledgement before it is directed towards the Lord

of heavens and earth. Everything is guided by His will and we are thankful to Him for having

provided us this opportunity through His vessel.

We would like to thank Sir Ahmed Nabeel for pushing the bar higher by giving us a task

unmatched and unparalleled by any other we have done before in the pursuit of academics. This

has been a very tiring journey and the result is this report. We will like to extend our gratitude

and apologies for not having done our best due to the time barrier. Such a vast topic requires

more than a complete term.

Once again we are thankful to Mr. Ahmed Nabeel for having provided this learning opportunity.

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Acknowledgement.......................................................................................................................................5

Introduction.................................................................................................................................................7

A Brief History of Coca-Cola (Global)....................................................................................................7

Coca-Cola in Pakistan.........................................................................................................................7

A Brief History of Pepsi (Global)............................................................................................................9

Pepsi in Pakistan................................................................................................................................10

Management Hierarchy at Coca-Cola........................................................................................................11

Management Hierarchy at PepsiCo (SCL).................................................................................................12

Process......................................................................................................................................................13

Inputs.................................................................................................................................................13

Stages................................................................................................................................................13

Quality Test...........................................................................................................................................15

Coca-Cola SWOT Analysis.......................................................................................................................15

Strength.............................................................................................................................................15

Opportunities.....................................................................................................................................15

Weaknesses.......................................................................................................................................15

Threats...............................................................................................................................................16

Pepsi SWOT Analysis...............................................................................................................................16

Strengths............................................................................................................................................16

Weaknesses.......................................................................................................................................16

Opportunities.....................................................................................................................................17

Threats...............................................................................................................................................17

Communication & Employee Participation...............................................................................................17

Conclusion.................................................................................................................................................18

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IntroductionA Brief History of Coca-Cola (Global)

Coca-Cola is a carbonated soft drink sold in the

stores, drink corners, restaurants, and vending

machines of more than 200 countries. It is produced

by The Coca-Cola Company of Atlanta, Georgia, and

is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the

United States since March 27, 1944). Originally intended as a patent medicine when it was

invented in the late 19th century by John Pemberton, Coca-Cola was bought out by

businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the

world soft-drink market throughout the 20th century.

The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout

the world. The bottlers, who hold territorially exclusive contracts with the company, produce

finished product in cans and bottles from the concentrate in combination with filtered water and

sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and

vending machines. Such bottlers include Coca-Cola Enterprises, which is the largest single Coca-

Cola bottler in North America and Western Europe. The Coca-Cola Company also sells

concentrate for soda fountains to major restaurants and food service distributors.

Coca-Cola in Pakistan“To provide Coca-Cola at arms ‘length”

The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are

the brands with whom Coca-Cola is operating in Pakistan. The Coca-Cola System in Pakistan

operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages

Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala,

Faisalabad, Rahim Yar Khan, Multan and Lahore. The Coca-Cola System in Pakistan serves

70,000 customers/retail outlets. The Coca-Cola System in Pakistan has nearly 3,000 people

working constantly for the company. During the last two years, The Coca-Cola Company in

Pakistan has invested over $130 million (U.S) and coke has successfully provided 58 years of

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dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm

has been continuously changing its slogans and that’s a very creative idea to get the attention of

the customers.

Transformation of slogans of coke since the journey started, all the way to Pakistan

1886 Drink Coca-Cola

1908 Get the genuine

1923 Enjoy thirst

1934 When it's hard to get started, start with a Coca-Cola

1942 The only thing like Coca-Cola is Coca-Cola itself

1956 The friendliest drink on earth

1963 Things go better with Coke

1993 Always. Coca-Cola

2001 Life is Good

2003 Jo Chaho Ho Jaye Coca Cola Enjoy

2004 Flight Of Delight

2005 Galay Delicious Taste

2006 Thanda matlab Coca Cola

2007 Khaly pily jila Coca Cola

2008 Aja jashan mana ly

2008 Brrrrrrrrrrrrrrrrrrr!!!

Today CCBPL is operated directly under the supervision of the Coca-Cola International based in

Atlanta Georgia State___ USA .It owns 8 plants all around in Pakistan. Coca Cola Company

offers the brand range as Coca Cola, Diet Coke, Fanta, Sprite and Kinley water in Pakistan.

Coca-Cola introduced in Pakistan 1953

Fanta introduced in Pakistan 1965

Sprite was introduced 1972

Diet Coke & Fanta Lemon 2001

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A Brief History of Pepsi (Global)

Pepsi is a carbonated soft drink that is produced and

manufactured by PepsiCo. Invented in 1883 and

introduced as "Brad's Drink", it was later renamed as

Pepsi-Cola on June 16, 1903. Pepsi was first

introduced in New Bern, North Carolina in 1883 by Caleb Bradham, who made it at his home

where the drink was sold. Bradham sought to create a fountain drink that was delicious and

would aid in digestion and boost energy.

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse.

That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce

bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield

was the first celebrity to endorse Pepsi-Cola, describing it as "A bully drink...refreshing,

invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was

then used over the next two decades. In 1926, Pepsi received its first logo redesign since the

original design of 1905. In 1929, the logo was changed again.

In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy - in

large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a

result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight

years later, the company went bankrupt again. Pepsi's assets were then purchased byCharles

Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained

soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give

him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup

formula.

On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered the

opportunity to purchase the Pepsi-Cola company and it declined on each occasion

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Pepsi in Pakistan

Pepsi was introduced circa 1979 in Pakistan. This was a time when Coca-Cola had already

managed a 72% market share in the Pakistani market. However, in 1980 Pepsi was offered as a

franchise in agreement with Coca-Cola and they came to be known as Pepsi Cola.

Today Pepsi is operated by independent contractors who have attained production licenses from

the international offices of Pepsi. A few of these bottlers are Haidiri Beverages, Shahi Beverages

and Shamim and Company (Pvt Ltd). For our report, we will be referring to Shamim and

Company (SCL) since it suits our vicinity.

Shamim & Co (Pvt Ltd)(SCL)“We bring you Pepsi, its the Cola”

SCL became a franchisee of Pepsi Cola International under license in 1973. SCL has a sales

force of more than 300 skilled personnel selling and delivering four of the most consumed

carbonated soft drinks brands to nearly 20 million people in the region every day. We focus on

superior sales execution, customer service while maintaining highest international quality

standards in our operating excellence. According to SCL, company’s policies reflect the

emphasis on superior manufacturing quality standards, competitive sales capability and customer

satisfaction oriented services round the clock so that customers get the best of the carbonated soft

drinks in the region delivered to their doors.

SCL’s Mission Statement

"We Bring You Pepsi - It's The Cola". But that's not it; we also bottle the fastest growing

carbonated soft drinks like the Mountain Dew, Mirinda Orange and the 7-UP.

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Management Hierarchy at Coca-Cola

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Managing Director

Chief Operating Officer (Sales)

Director Operations Director OperationsQuality

Control

Manager

Assisstant ManagerExe

cutive Manager

Senior Officer

Sales

and Marketing

Manager

Regional

Sales ManagerSales Manager

Marketing

Development

Officer

Sales

and Marketing

OfficerDriver

HR Manager

Distribution

and Logistics Manager

Accounts Manager

Production

Manager

Managing Director

General Manager Technical General Manager Sales General Manager Finance General Manager Operations

Manager Production Manger Sales & Marketing Manager MIS Manager Admin

Manager PersonnelManager FinanceManager Research & SISManager Quality Control

Manager ShippingManager Account


Management Hierarchy at PepsiCo (SCL)

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Manger Sales & Marketing

Regional Manager Sales & Marketing

Area Manager Sales & Marketing

Drivers

Manger Sales & Marketing


ProcessThe production process is pretty similar for both the concerns. The only difference lies in some suppliers

for basic raw material such as sugar. However, the quality standards remain the same.

Inputs

Water: The water used in the production of Pepsi’s beverages is pumped from the natural

underground reserves. Heavy duty pumps extract water from 500 ft below the ground. This water goes

through a number of purification processes before it is suitable to be used in a beverage. Water is also

used for washing the bottles and this water is treated in a different way to reduce the hardness of water.

Syrup: Syrup is made by adding sugar to water. The sugar used is not the one sold in market.

This is refined sugar, free of bacteria and impurities.

Concentrate: This is imported from the headquarters. This is the secret recipe that makes both the

drinks so special.

Stages

1st Stage (Getting Treated Water):

‘Lime’, Farris Sulphate (for iron) & chlorine are

added to raw/hard water & it goes in “chemical tank” where

carbonates and bi-carbonates settle down, & they get treated/soft

water.

2nd Stage (Preparation of Simple Syrup):

Simple “Syrup” is made by mixing up sugar into water after pasteurization of

water at “85ºC”. After ‘stay’ for a time period, this simple syrup is filtered & then cooled down

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Pepsi Coca Cola


at “19º C”. Water is heated/boiled & cooled down at extreme temperature to avoid germs-growth

at normal temperature like “32º C to 35º C”

3rd Stage (Preparation of Finish Syrup):

Now this simple syrup goes into “syrup storage tanks”. ‘Concentrate’ & flavor are

added to simple syrup & it is called “finish syrup”.

4th Stage (Washing Empty Returned Bottles):

Empty returned bottles pass through steam

under “57 ºC to 77º C”, and then these are cooled down.

This process-step takes 45 minutes. Now bottles are washed

by “Caustic-Soda”, ‘TSP’ and water. Now a light-test is

conducted for these treated bottles, where the bottles pass in

front of a light.

5th Stage (Filling Section):

Now syrup & treated water come to

“Carbon Cooler” in which NH3 (Ammonia) chips,

are used for cooling purpose. ‘Co2’ gas also comes

in Carbon Cooler. After a flow-mix in Carbon

Cooler, the resultant drink comes into ‘filler’, where

empty washed bottles are filled.

6th Stage:

Now bottles come to “Crowner” where these are crowned then bottles pass

through a light test to have a check for overfilled, under filled or any deficiency.

7th Stage:

After passing through “printer”, the “casing” of bottles is

made, & at last shipping hand over is there.

Quality TestQuality-Tests for raw material:

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Sugar quality test is called “Brix”.

Concentrate test.

Water treatment tests.

Upper tap test.

San filter and carbon purifier test.

Water softness test.

Finished bottle test i.e. light test.

Microbiological test by chemist after a week

Coca-Cola SWOT Analysis

Strength Popularity

Well known

Branding obvious and easily recognized

Financial support

Customer loyalty

International trade

Opportunities Many successful brands to pursue

Advertise its less popular brands

Buy out competition

More brand recognition

Weaknesses Word of mouth

Lack of popularity of many Coca Cola brands

Most unknown and rarely seen

Result of low profile or non-existent

Threats Changing health-conscious attitude

Legal issues

Health regulations

Competition (Pepsi)

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Pepsi SWOT Analysis

Strengths

Quality in terms of product service

Quality of people (trained, motivated, committed)

Better sales planning

Vital role in economic development

High profit rate

Rapidly increasing market share

Strong image of PEPSI in consumer’s mind

In time service of supplies and technical assistance

More installation of post mix machine

Strong financial position

Rapidly increasing market share

Weaknesses

Poor feedback from employees

Insufficient salaries

Monopoly of distributors cause harm to company

No advertisement budgets for post mix.

No signage’s of post mix in the market

No promotional activities in post mix.

No availability of spare parts.

No proper workshop for post mix.

Opportunities

New style management

New brand introduction

Low cost skilled person availability

Opening of new outlets

Strong consumer commitment with Pepsi.

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Threats

Coca- Cola is on its way to get market share

Amrat and Makka cola also trying to get market share

Changes in consumer purchasing power

Increase in competition

Inflation

Due to blame of religious group

No proper employee’s orientation programs

Communication & Employee ParticipationCommunication is one of the most important aspects of manufacturing concerns of this scale. However, it

is beyond any doubt that both Pepsi and Coke have a transparent and effective communication system.

During our visits to the production facilities, we witnessed a coherent setup of transference of messages

across the line of command. The managers are responsible for keeping their teams aware of the direction

of the company. Weekly meetings are held between higher level managers to keep sure everyone is on the

same mindset. Issues and concerns are addressed these meetings.

Employees are a key element of both production facilities. Their contribution, not only to the processes,

but to the smooth running of the organization is considered essential. There are suggestion boxes

throughout the facilities that allow employees to give their feedback or inputs on matters of importance.

Employees are well compensated to ensure continuous motivation on their part. However, their

compensation relies heavily on their performance. This also leads to cutbacks in the salaries if targets

aren’t met. The rewards, however, remain countless. A general chit chat with the employees who were

assisting us with the visit reveals a substantial element of job satisfaction. The employees take pride in

their work and act in the best interest of the company. It is very safe to assume there aren’t many

differences in the employee satisfaction and empowerment at both the organization. Even the

organizational structures, based on a general management model reflect the same priorities.

ConclusionThe traditional rivalry between Coke and Pepsi seems justified after a closer look at their

production processes. However, the scenario in Multan city apparently gives an edge to Pepsi.

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The plant here can manufacture up to 250000 (two hundred and fifty thousand) cases a day

against Coke’s meager production of 14400 (fourteen thousand four hundred) cases a day. Also,

Pepsi engages in the production of multiple products like PET bottles and Sting energy drink

whereas Coke produces its star drink only. It wasn’t until we started studying both the

organization in detail that we saw the bigger picture. Coka enjoys market leadership throughout

the world. However, countries South Asia (Pakistan, Sri Lanka, Nepal) are ruled by Pepsi when

it comes to market share. The reason may be the difference in taste. Quality standards at both the

organizations are a matter of great scrutiny by the headquarters. Headquarters of both the

companies make sure they constantly keep a quality check on the product by random testing of

products from locations across the nation. This had lead both the company’s to establish

themselves in the image of superior quality by meeting customer needs in a very profitable

fashion.

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Introduction

Documents

Transcript of Introduction