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Business Makeover: PepsiCo

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If it's broke, fix it.

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Last week, PepsiCo (PEP) announced a 9.6% drop in third-quarter profits. The stock fell to a 2-year low of $51.25, down from an all-time high of $79.57 in January 2008. The company plans to cut 3,300 jobs worldwide and to shutter as many as 6 plants. With the writing on the wall for 2008, what bold initiatives can the soft drink maker undertake to make 2009 more profitable?

Viral videos showcasing the explosive chemical reaction between Diet Coke (KO) and Mentos have wrangled the limelight away from Pepsi's own diet offering. Release secret government tapes showing that, with the addition of just a few common household items, Pepsi can be converted into weapons-grade plutonium.

A significant portion of production costs are squandered on aluminum and plastic. Start selling the soda in 20-pound blocks of ice that can be melted directly into consumers' favorite drinking glasses.



Spots for Pepsi Max, featuring crowds bopping their heads like Saturday Night Live's Roxbury Guys, are beyond annoying. Garner more interest by replacing them with everyone's favorite character: Jim Breuer's Goat Boy.


Let's face it: No one identifies themselves as part of the Pepsi Generation. Try linking this elusive demographic with Tom Brokaw's Greatest Generation.



The Cola Wars have destroyed families and cost both Pepsi and Coke billions of dollars. Be the bigger corporation: Declare a ceasefire, draft the Treaty of Carbonation and begin rebuilding from the rubble.


People just weren't ready for the completely transparent Crystal Pepsi. So split the difference: Try Cloudy Pepsi.






No positions in stocks mentioned.
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