Describe the relationship between strategic and financial planning. Include the following:
-A strategic planning initiative for your organization and identify an initiative discussed in the organization's annual report.
-How the initiative affects the organization's financial planning.
-How will the initiative affect costs?
-How will the initiative affect sales?
-Risks associated with the initiative and financial effects they may have.
The strategic planning initiative that I am considering is the acquisition of Pepsi Bottling Group and PepsiAmericas by PepsiCo. The process of acquisition started in 2009 and was completed in 2010. This acquisition was formed the wholly owned subsidiary of Pepsico, Pepsi Beverages Company. This purpose of these acquisitions is to create synergies of $300 million by 2012 mainly due to greater cost efficiencies and improved revenue opportunities. The direct reason for these acquisitions is that the economic downturn had created a number of challenges for PepsiCo. To face these challenges, PepsiCo needs to have a more flexible, efficient and competitive system. PepsiCo is seeking to maintain its growth through the acquisition of Pepsi Bottling Group and PepsiAmericas. These two companies had spun off from PepsiCo ten years ago and now in a major strategic initiative have been acquired. What has attracted PepsiCo to acquire these companies is the fact that the companies have a shared culture and excellent operations. The stated reason for the integration is that it will help PepsiCo to respond quickly to changes in the market, make innovations in products fast, bring new products quickly to the market and integrate its manufacturing system with the distribution system to improve the speed with which new launches can be made.
The strategic planning initiative has been discussed in the annual report of 2011 and is given below:" In 2011, we incurred merger and integration charges of $329 million, ($271 million after- tax or $0.17 per share) related to our acquisitions, of PBG, PAS and WBD. In 2010, we incurred merger and integration charges of $799 million related to our acquisitions of PBG and PAS, In 2010, we incurred merger and integration charges of ...
strategic and financial planning is discussed in great detail in this solution.