Frito-Lay North America: The Making of a Net Zero Snack Chip Harvard Case Solution & Analysis

Frito-Lay North America: The Making of a Net Zero Snack Chip Case Study Solution

Weaknesses

Low return on investment and delayed payback period of already existing energy projects are the foremost weaknesses of FLNA that must be take into account prior piloting the novice plan to reduce emission of GHG. Confined approach to international market to hunt high level talent due to limited budget is another noticeable drawback of FLNA.

Opportunities

Rising consumer purchasing power is one of the most superior opportunities that can assist the FLNA to sell its net zero based produced product in the market. Changing consumer behavior given the environmental issues also encourages the Frito lay to adopt such patterns that are environment friendly.Adding to this, growing conformity with Artificial Intelligence would not only support in forecasting consumer demand, catering of the grid market but also enhance the scope of testing net zero facility decision at Casa Grande. At the end inclining globalization also provide a platform to the firm to market its unique product internationally and it also can reduce the procurement cost of numerous material use in a manufacturing process.

Threats

Sticky prices culture in the industry is one of the dreadful threat as company cannot implement any such plan that can cause higher production cost which ultimately increases the sale prices. Due to cut-throat competition it is difficult to be cost efficient while projecting any state-of-the- art facility plan. Increasing consumers and buyers bargaining power is another threat for the FLNA. Adding to this threat of new entrants owing to reduced red-tapism cannot be over sighted. Lastly, trade conflict between U.S. and China is an issue that must be addressed because this trade tension increases not only labor cost but also circumscribes the entry of FLNA into China-the second largest consumer in the world.

Evaluation of Projected Greenhouse Gas Emissions

According to Al Halverson and his resource conservation team, the net zero model will give the projected 75% reduction in water usage and 80% in the natural gas production along with the 90% reduction in electricity usage. Detailed analysis had been done one by one through the usage of electricity and natural gas to identify the projected emission of greenhouse gases. Tables provided in exhibit 3 and 4 indicates the view point that the emission of greenhouse gasses, from both sources, shows very slowly increasing trend. This shows that net zero model provides with its usual results but fails to increase its percentage change from year to year ultimately increase in operating cost. Utility expenses will increase in future, ultimately effect the prices of water, natural gas and electricity due to increasing inflation rate. These all sources were used for emission of CO₂

Alternatives

Alternative-1: Revision of Net Zero Model

First alternative solution which Frito lay can adopt is to revise it overall net zero model. Revision of net zero model will eventually identify the weak points lie in the previous strategy. This alternatives will provide the following advantages to Frito lay:

• This alternative is very useful in term of costing. Revision of the same model will not result in additional cost required. If company choice to use the different model, it will definitely require some additional cost.
• Greenhouse is become one of the greatest source for healthy environment in this technological world. Adopting Net Zero model again will affect the green houses and eventually cause in decrease of it.
• In US, government has imposed many restrictions to the companies regarding the healthy environment. This alternative helps the companies for fulfilling its legal requirements and provide an over hand from other companies.
• Revision in same model will require less cost and ultimately cause firm in completing its social responsibility.
• This option will help to avert he failure of model, Hence cause to save its sunk cost.
• This option will not only helps in saving its additional cost requirement but also helps in time saving.

Considering the advantages associated with first alternative, this option will also cause in some major disadvantages:

• This may again cause in failure of the same model, despite investing more in this model.
• This alternative will require more additional cost that eventually cause in extensive cost and wastage of already invested cost.
• This alternative will require additional research requirements to improve model.

Alternative-2: Using Renewable Energy Resources

Second alternative which is suggested is that to use the renewable energy sources instead of Net Zero model. Renewable energy now a days is considered as major source in reducing the unhealthy gases. This alternative will provide the following benefits:

• This alternative will provide potential decline in greenhouse gases which impacted the society.
• This alternative not only fulfil the social responsibility but also helps in fulfilling the legal and political requirements of the company.
• Second alternative will helps the company to fulfillment its social responsibilities imposed for the government for the well being of society.
• Second alternative not only provides the company many benefits but also impacted with some disadvantages:

• Second alternative will require huge additional cost for planting the renewable energy resources.
• This alternative will eventually results in wasting the previously invested money in Net Zero model cause this investment as Sunk cost.
• This alternative will not only require huge investment but also cause in consuming more time with more efforts.
• This alternative has chances of losses because it will be a new project to install with no experience. This is time consuming process.

Alternative-3: Shifting of Manufacturing Plant

Another option which Frito lay can use to shift its plant in different countries with potential attracting more customers. Frito lay can shift its manufacturing plant to the countries where rules and regulations regarding the greenhouse gases is low. This alternative will eventually results in following benefits:

• Third alternative will helps the company to save the political and legal threat imposed from the government. Legal rules regarding the green hose gases is minimize in other countries as compare to the US government.
• Decline in labor cost. This alternative will not only helps in reducing the political and legal threat but also helps in identifying the countries where labor cost is less eventually helps in decreasing the its operating cost.

This alternative not only entertain the company with benefits but also cause some disadvantages:

• Shifting the manufacturing plant in other country will require huge investments and more experience with some effective strategy.
• Different countries have different political and legal structure along with different investment structures. This alternative require huge investment with different political scenario.
• This alternative require huge experience to plant the manufacturing plant in some other countries along with knowing the background and cultures of societies.
• This alternative will eventually cause in losing the Potential US markets.

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