...Investment Analysis for Pepsi versus Coca Cola ACC557 – Financial Accounting December 13, 2012 Company Synopsis Pepsi Cola | Coca-Cola | The Pepsi Bottling Group, Inc. (PBG) is the world's largest manufacturer, seller, and distributor of Pepsi-Cola beverages. Separated from parent PepsiCo, Inc. in 1999, it accounted that year for 55 percent of Pepsi-Cola beverages sold in the United States and 32 percent worldwide. The company delivers its products directly to stores without using wholesalers or other middlemen. In addition to its extensive production and distribution facilities, PBG leases and operates about 20,000 vehicles and owns more than 1.1 million soft drink dispensing and vending machines. PepsiCo holds a controlling interest in the firm. | The Coca Cola history extends back to 1885, when John Pemberton invented the original recipe for a new cocawine. Pemberton developed Coca-Cola, a non-alcoholic version of his original cocawine, when Fulton County passed prohibition legislation. Carbonated water was added later by accident when Pemberton was mixing drinks for a friend and incidentally included it. His friends loved the new taste, so he altered the original formula to incorporate it. | Pepsi - International Directory of Company Histories, Vol. 40. St. James Press, 2001. (http://www.fundinguniverse.com/company-histories/the-pepsi-bottling-group-inc-history/). Major Suppliers Pepsi Cola | Coca-Cola | PolandEgyptUnited Arab EmiratesCanada | Poland...
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...over 200 countries. Pepsi co is really a leader when it comes to convenience foods and drinks but it always come second best. It always comes behind Coca- cola, which is the world leader in soft drink. In 2006 Pepsi co was the world leader in this market we will study what strategy they used to be able to determine what is the problem since 2006 . Analysis of the problem. Problem Analysis. On December 12, 2005, for the first time in the rivalry of over a century, PepsiCo (Pepsi) surpassed its biggest foe Coca-Cola (Coke) in market capitalization. It had much higher operating revenue than Coke. Acquiring many companies is a strategy that propelled Pepsi ahead of it longtime concurrent Coca-cola. (.ibscdc2006) The Quaker Oats acquisition at $13.9 billion brought Quaker’s most valuable asset Gatorade under PepsiCo. After the completion of Quaker Oats acquisition in August 2001, PepsiCo made a number of small, tuck-in acquisitions. The combination of acquisitions coupled with PepsiCo’s core snacks and beverage businesses allowed the revenues to increase from approximately $20 billion in 2000 to more than $35 billion in 2006. PepsiCo’s corporate strategy was diversification and a relatively new element of PepsiCo’s corporate strategy was product reformulations to make snack foods and beverages less unhealthy.( scrib 2006) Alternatives Solutions Alternative 1. Diversification Since it seems that by acquiring many small companies, it boosted Pepsi co revenue so high...
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...Palas Caroline LAYANI Id: 94746 Michael WEIMBERG Id: 94852 Nathan BENAMOU Id: 94531 Sebastian KANOVICH Id:799048 I. Executive summary After analyzing the income statement, ratios and strategies of the Coca-Cola Company, we can conclude that Coca-Cola had a continuous revenue growth between the years 2009 and 2011. It is the largest soft drink industry company in the world and therefore stands in a privileged position to face potential crisis. The reason for having our results in the income statement, and thus also in our ratios can be explained by the company’s acquisition and consolidation of CCE’s North American business during the last quarter of 2010. Moreover, another important factor for the decline in equity interest was the sale of the company’s investment in Embonor during the first quarter of 2011. Coca-Cola has been using several strategies. As mentioned above, acquisitions have been an important factor of Coca-Cola over the last 50 years. By acquiring new companies, they were able to eliminate competition, increase their growth and become the market leader of the non-alcoholic beverage industry. Following our calculations, over the past three years, Coca-Cola had an increase in its current liabilities as well as in their “cash to sales”. The debt-to-equity ratio shows that it’s smaller than one, meaning that the company is financed through equity. This low debt-to-equity ratio will usually be preferable for investors because it means that their interest...
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...organisation to embark on a radical restructuring strategy to optimise their return on investments. The paper will discuss the rationale behind the critical restructuring .The benefits of the acquisitions and restructuring strategy will be discussed and motivated in detail. The strong existing competitive resources that PepsiCo and the new acquired brands in the North America region possess will be emphasised. The modifications to PepsiCo structure in 2001 and 2004 will be scrutinised to motivate and justify the decisions of the PepsiCo leadership. In addition the case study will evaluate the execution of the radical change and the tasks that should be performed by key resources. The emotional impact on employees due to the radical transformation and the key role employees should perform will be described. The focus of the paper will be on the function; the leadership of PepsiCo must perform and the potential roles the employees of PepsiCo could execute. Ultimately, the case study will discuss the complex relationship between structure and strategy. The paper will establish that PepsiCo had to regular acclimatise their strategy and structure to accomplish their organisational goals. Introduction Over a three year period from 1998-2001, PepsiCo made 2 major acquisitions. Each acquisition was made for a price premium that could only be repaid by finding new synergies and economies of scale. This required PepsiCo to develop new organisational structures designed to deliver...
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...branded products compete with each other, but normally to a lesser degree. Coca-Cola and Pepsi are two companies that share such a competition; they have been battling each other for more than a century. It's a legendary brand rivalry. Read more: http://www.businessinsider.com/coca-cola-vs-pepsi-timeline-2013-1?op=1#ixzz2NHwdKlQR Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the invention of Caleb Bradham, a pharmacist and drugstore owner in New Bern, North Carolina. The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So, young pharmacist Caleb Bradham began experimenting with combinations of spices, juices, and syrups trying to create a refreshing new drink to serve his customers. He succeeded beyond all expectations because he invented the beverage known around the world as Pepsi-Cola. Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it into a gathering place. He did so by concocting his own special beverage, a soft drink. His creation, a unique mixture of kola nut extract, vanilla and rareoils, became so popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow, convincing him that he should form a company to market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and applied to the U.S. Patent Office for...
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...The Coca-Cola Company FINANCE Spring 2013 [FNCE 601] February 1st, 2013 | WEMBA38 | Team 17 Mathieu Verbeeck Why has coca cola been so successful in the past? When Douglas Ivester took over the reigns at Coca-Cola in October 1997, he had big shoes to fill – indeed, Goizueta – who passed away earlier in the year – would be remembered as one of the greatest wealth builders of the 20th century: during his tenure as CEO, Coca-Cola’s market value grew from $4.3 billion to $165 billion and an investment of in the Coca-Cola stock would have earned a compounded annual rate return of 33% over the last 10 years. Goizueta’s and Coca-Cola’s success can be attributed to a number of factors. Business Strategy Coca-Cola’s mission is to maximize shareholder value over time. To achieve this mission, The Coca-Cola Company executes a business strategy driven by four key objectives: increase volume, expand Coca-Cola’s share of worldwide nonalcoholic ready-to-drink beverage sales, maximize its long-term cash flows and create economic value added by improving economic profit. Coca-Cola achieves these goals by strategically investing in the high-return beverage business and by optimizing their cost of capital through appropriate financial policies. Marketing To meet its long-term growth objectives, Coca-Cola continues to make significant investments in marketing to support their brands. Marketing investments enhance consumer awareness and increase consumer preference for their...
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...and isotonic drinks ØStrategic Acquisitions and International Expansion Quaker Oats in 2001 Duyvis Nuts (Netherlands), Lucky Snacks (Brazil) Business Strategies “ Better For You” Diet Pepsi, Pepsi Max, and Baked Lays, SoBe life “ Good For You” Water, Propel Quaker, Tropicana, Naked juice, and Gatorade 80 % Fun for You and Better for You Combined 20 % Good for You Pepsi, Doritos, Power of One Retailer Alliance Strategy Mountain Dew Product formulation based on consumer and Lays demand How to get Consumers buy more than one Pepsi product per visit New product introduction based on recommendations by retailers. “Fun For You” Industry Attractiveness Measure Weight PepsiCo North America 10 7 7 7 8 10 4 PepsiCo International 10 5 5 8 7 9 5 Frito-Lay 8 5 5 7 6 5 6 Quaker Oats 8 6 6 7 6 5 5 Market Size and growth .1 rate Intensity of Competition Emerging Opportunities and Threats Cross-Industry Strategic fits Resource Requirements Seasonal and Cyclical Influences Competitive Strength of PepsiCo’s ØMarketing – advertising approach and further segmenting the drink sector ØProduct diversity – Frito Lay snacks, Pepsi products, Quaker healthy snacks ØBrand loyalty – consumers loyalty Competitive Strength/Market Position Importance Weight 1. Relative market share 0.15 2. Cost relative to competitor cost 0.20 Competitive Strength Scores for each SBU Frito Lay 9 5 6 9 7 8 7 8 7 . 45 8 8 9 6 7 7 7 7.9 4 6 9 7 9 8 8 Pepsi PepsiCo Quaker Co Intl NA 9 7 4 3 4 8 7 10 8 10...
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...Coca-Cola vs. Pepsi Co 2 1. Using the current ratio, discuss what conclusions you can make about each company’s ability to pay current liabilities (debt). The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term creditors, it would be able to do so and have a surplus of 44% of current assets. If Coca-Cola had to pay all its short-term obligations, it would have only 13% surplus of current assets after fully repaying all short term obligations. Therefore, it can be said that PepsiCo is more liquid than Coca Cola based on its current ratio. | Coca-Cola | Pepsi Co. | Current Ratio | 1.13 | 1.44 | 2. Using the profitability ratios, discuss what conclusions you can make about each company’s profits over the past three years. The return on assets ratio is an indicator of how profitable a company is relative to its total assets. Pepsi Co’s return on assets ratio is 14.92, slightly higher than the industry’s Coca-Cola vs. Pepsi Co ...
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...non-alcoholic carbonate beverages, mineral waters and different concentrates and syrups which are used in manufacturing carbonate drinks. Soft drinks industry originated in the year 1772, and now this industry is global, and the companies are facing a tough competition to emerge as the best player in the market. Pepsi co. and Coca Cola are the biggest international player in the Soft Drink Industry, who shares the largest market share in the soft drink industry. Today, people want beverages to deliver more than great taste. They seek an experience that refreshes their outlook, stimulates their senses and inspires hope and optimism. Company Profile of Pepsi Co. Pepsi Co. is one of the leading global beverage, snack and food company, having its headquarters in Purchase, NY. Pepsi market and sell a variety of convenient, salty, sweet, grain based snacks, carbonated and non-carbonated beverages and foods in more than 200 countries, having their largest operations in United States of America, Canada, Mexico and United Kingdom. Pepsi markets and owns many brands as Quaker, Oats, Gatorade, Frito-Lay, CoBe, Naked, Topricana, Mountain Dew, Mirinda, Copella. The commitment of Pepsi is to achieve a sustainable growth i.e. Performance with purpose, which is focused on generating healthy financial returns and serving its customers. This includes meeting consumer needs for a spectrum of convenient foods and beverages, reducing their impact on the environment through water, energy and packaging...
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...American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo is a world leader in convenient foods and beverages, with revenues of about $25 billion and over 142,000 employees. The company consists of the snack business of Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages and Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North America and Gatorade/Tropicana North America) and Quaker Foods North America. PepsiCo International includes the snack businesses of Frito-Lay International and beverage businesses of PepsiCo Beverages International. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees...
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...A look into the world of carbonated drinks will lead you straight to two of the biggest suppliers The Coca Cola Company and Pepsi Inc. Both of these companies provide a rich source of services and products but you will always find that consumers are still stuck with the question of which company provides the best overall product. Simply said.. Are you a Coke or Pepsi fan? I will examine both Coca Cola and Pepsi roots and determine which will provide the optimal solution for investors. John Pemberton an Atlanta pharmacist created Coca Cola by accident. In 1886 while in his home mixing some caramel and colored liquid Pemberton tasted what would soon be the first sampling of the future Coca Cola. Pemberton decided to take his mixture to a nearby pharmacy and add carbonated water to change the taste. He was determined this was the next big invention and convinced Jacob’s Pharmacy to allow him to let customers sample his product for five cents a glass. Knowing that the sampling was a success Pemberton took the idea to his friend and bookkeeper Frank Robinson who helped to name and create the signature script for Coca Cola that would be still used to today. During its first year in Jacob’s Pharmacy nine glasses of Coca Cola was served per day. Only two years into its discovery John Pemberton would pass away but his ideas would evolve as did the people involved with Coca Cola’s development (“Heritage timeline,”2012). Soon after Pemberton’s passing Asa Griggs Candler...
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...This report will focus on the comparison of financial conditions, especially their profits statements between Coca-Cola and Pepsi Co. for their stakeholders, like consumers, shareholders, managers, investors, and employees, creditors and lenders. The two soft-drink giants have been battling for bigger shares of the globe's thirst for more than a century. "Coke or Pepsi" has been debated endlessly, with ads such as the Pepsi Challenge campaign in the 1970s fueling the rivalry. And both sides in this epic consumer battle have had hits (Diet Coke and Pepsi One) and misses (New Coke and Crystal Pepsi) The Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. It is assessed as the most valuable brand in the world that owns or licenses more than 400 brands, and its products are sold in more than 200 countries. However, PepsiCo, as one of Coca-Cola’s toughest competitors, is also very competitive in the nonalcoholic beverage market. It is the second-largest food and beverage company in the world. This is quite evident of PepsiCo’s gross profit margin of 57.5% and sales for 2010 of $43.23 billion in 2010, compared to Coco-cola’s gross profit margin of 68.4%.and sales of $30.99 billion. (Investing in Coco-cola or Pepsi for Stock Gains) Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. The current ratio measures the company’s...
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...Analyst; Pepsi versus Coca Cola Renee Cole Dr. Tim Creel December 16, 2012 A closer look at PepsiCo and Coca Cola PepsiCo Pepsi-Cola was created in the late 1890s by Caleb Bradham, a New Bern, N.C. pharmacist. Then in 1965 Pepsi-Cola and Frito-Lay merged to create PepsiCo(No author, 2012). According to No author(2012) PepsiCo operates in the consumer goods sector and produces a variety of foods and drinks to include Lays and Ruffles potato chips, Doritos, Cheetos, Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker grits, Cap n Crunch, Quaker rice cakes, beverage concentrates, fountain syrups, and finished goods under Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, ready-to-drink tea, coffee, and brands licensed from Dr Pepper Snapple. PepsiCo’s major customer is Wal-Mart holding 12% of sales (Nooyi, 2010). Major suppliers include E2M who specialize in packaging and manufacturing consulting and SHI International a regional reseller and global IT provider (Freeman, 2010). No author (2012) stated The president of PepisiCo is Zein Abdalla Indra and Nooyi is Chairman and Chief Executive Officer of PepsiCo, a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. PepsiCo’s main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola...
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...marketing management | PEPSI COLA PAKISTAN INC | CASE STUDY ANALYSIS | | GROUP 1: MUSA TANVEER SARMAD AFZAL SHARYAR CH AHMED IBRAR HAROON SHAUKAT This case is about PEPSI CO and the Problems CEO facing. He is facing various problems after the acquisition of 7-UP by PEPSI CO .Teem was the lemon and lime soft drink of Pepsi co which was competing 7-UP but after the acquisition of 7-UP it is becoming difficult for them to separate both products in market. Basically the CEO is worried about the local market share of 7-up which he want to increase and on the other hand without effecting the share of TEEM which is a quite difficult job . Acquisition of 7-up has made two bottlers of PCI to merge with 7-UP bottlers and it is clearly understandable that TEEM operations cannot be further performed by these bottlers because now they are dealing with 7-UP, So what PCI has done is that they have launched a new flavor of cloudy Teem in this area with distinct characteristics of fresh lime to not effect 7-up and in other areas TEEM is still dealt with PCI bottlers which are not the part of merger . So CEO Mr. Irfan had to develop a plan to promote the two flavors of TEEM locally and nationally .Moreover he also has to achieve a task which is to convince the 7-up bottlers to sell their plants to PCI bottlers and after the success of this task he has to ask the PCI bottlers to introduce cloudy Teem, abandoning TEEM and promote 7-UP. To overcome with existing...
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...which is: Related Diversification: The restaurants limited investment in the company’s snack food and beverage business and severely impaired the corporation’s overall operating and profit margin. The fact restaurant which included Pizza Hut, KFC, and Taco Bell were eliminated from the company’s portfolio of business and the three main restaurants were spun off as an independent publicly traded company, the divestitures was completed with a creation of Tricon Global Restaurants. Focusing on related diversification and spun off business unit which were unrelated to the core business of beverage and snacks. Maintain of one Culture: PepsiCo’s new strategy was to maintain a single culture which is dominant and which was Frito-Pepsi Culture. Acquisition for Related Diversification: PepsiCo as part of its new restructuring strategy acquired Borden food’s snack mix of candy coated popcorn and peanuts Cracker Jack, Tropicana from Seagram Company (orange...
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