Mr. Gonzalez was given the additional responsibility to be the head of HR for North Latin America. He was given full personnel decisions to choose the best talent in Latin America to grow this region. After assigning the best people to key operating roles, including CFO and Market Managers, Mr. Gonzalez was asked by the Area Manager to help with the Dominican Republic.

The Actors:

The Division CEO, who wanted this underperforming u nit to catch up and surpass the other regions in Latin America
The Area Manager, who was an American who spoke no Spanish on his first international assignment and wanted to meet the expectations of the Division CEO
The Bottler in the Dominican Republic, who had been given Millions of Dollars to grow the market
The founder of the bottling Company, who saw his role as providing many jobs to the people as opposed to growing huge volume, and at the time was at the helm of the Company
The Pepsi Cola franchise managers who were trying to implement the changes

The Stakes:

At this time Pepsi trail Coca Cola around the world with the exception of Venezuela, Argentina and the Middle East. Any market gain was great news for the value of the PepsiCo stock.

The Situation:

Mr. Gonzalez was asked to visit the market to support the CFO and the Head of Technical Services to get the Bottler to move on the transformation of the country. Mr. Gonzalez arrived from Miami late at night to Santo Domingo. The franchise manager and the head of training pick him up at the airport for a late dinner and drinks, a typical market visit. Instead, Mr. Gonzalez asked if the Plant was operating at that time. They said yes, and Mr. Gonzalez asked to do a plant tour this was past 11:00 PM. Even though it was unorthodox, they took him there.

Mr. Gonzalez tour the plant, the warehouse and even went up to visit the small museum the founder had created where he still had the manual lines that allowed him to fill and cap the bottles one-by-one when he started the operations long ago. During this visit, Mr. Gonzalez observed that there were many people building pallets eight men at a time and the remaining 56 men stood by until these 8 got tired and then they would work one pallet at a time. Needless to say this process took all night to unload and load the trucks.

In addition, Mr. Gonzalez saw the 20,000 to 30,000 cases of new half-liter returnable glass they had received for the launch of Pepsi ½ liter presentation into the Dominican Republic market. Once he finished his tour he went to dinner with the PepsiCo people who complained bitterly about how slow the bottler was and how come they would not change the way they did business. At around 1:00 am, they headed to the hotel to drop Mr. Gonzalez off and found the main street close because it was the start of the week of Merengue. A major festivity in Santo Domingo that created a four or five day holiday weekend.

The Solution:

After dinner, Mr. Gonzalez built his action Plan. He woke up early in the morning and went to the Plant to meet the founder, his son who was the general Manager, the Operations Director, who was the son-in-law of the founder, and the CFO who was the number one trusted employee in the Company with no relation to the family. The discussion started in a very congenial matter. Mr. Gonzalez new the Bottler wanted more money from PepsiCo, US $ 10 M to do market activities on top of the money already given. Mr. Gonzalez heard their demands and observed thru the morning as the General Manager was constantly asked to sign checks for US $10 to US $ 50,000.

After the break, Mr. Gonzalez took the floor and asked for the Organizational charts of the Company. To which the General Manager answered in Spanish we do not have “Organigramas we have Crucigramas” or literally translated we do not have org charts we have puzzle charts. To what Mr. Gonzalez followed with his observations of the extra people and wasted time in the distribution center. The founder was offended and indicated he had great pride at being one of the largest employers in the island. Then Mr. Gonzalez asked how long before they could launch the ½ Liter Pepsi presentation to which he was answered by the son-in-law that they 1) did not have capacity and 2) did not have shells to put the bottles into the market. They emphasize the need for the additional US $ 10 Million.

Taking all the Actors needs into account Mr. Gonzalez provided the following solution:

Use the four or five days holiday to bottle the 20,000-to-30,000 cases of product
Use the cardboard boxes the new bottles came into transport the Bottles to the market
Use the extra labor in the warehouse to pack the cardboard boxes manually
Implement all these actions and then reduce the size of the Distribution team to generate funds to support the Market activities which combined with the new revenue will eliminate their need for Pepsi Cola funding.
If they did not do any of his recommendation. Mr. Gonzalez would recommend that PepsiCo cut all funding to the Bottler as he would not put any of his money in this market place.

Needless to say the founder was irate, the son-in-law did not know what to do, and Mr. Gonzalez’s Pepsi colleagues did not like the idea because they needed to stay behind to oversee this work. The CFO did not think we should threaten the Bottler, because he was also Dominican and they did not react well to threats.

However, the result was that the Bottles were filled taken to the market during the week of Merengue. PepsiCo surprised Coca Cola who took 18 months to introduce their own ½ liter package and as a result they lost their leadership in Dominican Republic. Another Blue win vs. Red.