Together both PepsiCo and Coca Cola are both companies that are known around the world for their goods. For decades now, these companies have been competitive against each other to “do better than” the other one, what some would call the “cola wars”. They individually offer a assortment of soft drinks; regular, diet, caffeine free and many other options for the public to choose from. Both of the companies also have quite a few different entities (or off springs) of their company, such as bottled water, energy drinks, and juices. Individually both PepsiCo and Coca Cola; better known as Pepsi and Coke, have produced goods for every income bracket. Inside this essay we will take a look into the two largest competing companies in the soft drink industry; Coca Cola and PepsiCo. Using financial data provided from 2004 and 2005, we will be able to use financial analysis, both vertical and horizontal, to verify the financial differences between the two companies. We should be able to make proper suggestions and recommendations with the review on both of the individual companies, income statements and balance sheets. The soft drink industry is one of the largest and assorted industries in the world; consumption in the United States alone is rated at 95%. Together Pepsi and Coke have dominated the soft drink industry, staying higher than any other competition for decades. Not only have they dominated the national market, but also have dominated the global market. Pepsi and Coke have triumphed over many obstacles, so that they may produce and distribute products in most countries around the globe. Both employ a strategy called “the follow up strategy”. When one launches a new product or service, the other is not far behind with a similar p... ... middle of paper ... ...ttling unit. This will help Pepsi to eliminate competition with any private label companies and keep them on the forefront with Coke. Coca Cola believes in reinvesting into their infrastructure and does not operate a franchise system. When it comes to figures, Pepsi seems to have more advantages (other entities), whereas Coke is getting better figures. This does not mean either company is better than the other, it shows that there is a tight competition between both companies and both are striving to surpass the other. Works Cited PepsiCo.com. (2009). Retrieved on: April 15, 2011 http://www.pepsico.com/index.html#/flash/pepsico_slide.swf Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial accounting (6th ed.). Hoboken, NJ: Wiley. The Coca Cola Company. (2009). Retrieved on: April 15, 2011 http://www.thecoca-colacompany.com/
To begin with the carbonated soft drink Industry is a profitable industry as its products such as Pepsi or Cola sell extensively across the globe. The industry relies heavily on its concentrate producers and bottlers to reach out to its market. This is further analyzed through Porter’s five competitive forces;
Taking this cost intensive bottling business into consideration both Coca Cola and Pepsi founded their own bottler spin-offs which operate according to the so called Anchor Bottler Model or are linked to the respective CSD company via Master Bottler Contracts.
Looking at the historical trends of Coke and Pepsi in terms of EVA we find Coca-Cola's
As we all should know, PepsiCo is one of the world’s leader in convenient food and beverages. PepsiCo shares are traded worldwide and particularly in NYSE (United States). PepsiCo is in the same line with Coca cola and Cadbury Schweppes as the dominating beverage companies. PepsiCo has successfully built a great brand name rivaling with coca cola, probably because PepsiCo unlike coca cola has its own bottling companies. With a competitive strategy based on differentiation rather than cost leadership like its fellow competitors PepsiCo invests highly in new packaging, flavors, formulas to outsmart their competition. Founded in 1919, producing a variety of sweet and grain-based snacks, carbonated and non-carbonated
Coke continuously out-stands Pepsi, even though they share a very similar taste and colour, however Coke should not be the drink that receives all the love and attention for what it offers. Despite their similar soda colour, the drinks actually contain some different ingredients, which produce a different taste, and affect the body differently. Furthermore, the way the companies markets their drinks makes a huge contribution to how successful their products will become. The major element for success however stems from their impact on society and how the companies utilize their social power to evolve. The two major soda companies are constantly head to head with one another, yet it is what they do that sets them apart.
For well over a century, both Coca-Cola and Pepsi have been battling it out for the top spot in the soft drink market. For the first 12 years after Coke’s creation, it reigned supreme, having no competition until Pepsi’s creation in 1898. As Pepsi was taking its first steps as a company, Coca-Cola was already selling a million gallons of Coke
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
Along with Pepsi, Coca cola is among the two leading carbonated soft drinks brands in the world. The two companies are always competing with each other to gain market share and revenues through innovative product offers and marketing stunts. But both the companies depend on a value chain that is similar has the same properties.
With the times changing PepsiCo and other soft drink companies realized that when people go to have a snack they look for a drink as well, and with consumers looking for the healthy option soda company’s like PepsiCo were losing customers” (p.1). This is a creative and effective marketing strategies by the Pepsi Company since, they could realize the wants and thought of providing the need. In this case, the want was a drink with a snack, and their plan was to provide the most suitable drink with the snack, so that more people will buy their product, and their brand will promote. Since the consumers were looking for healthy soda drink instead of any kind of soda, this strategy didn’t work so well because they were losing customers like some other companies. However, it didn’t stop Pepsi Company to use this strategy, rather the company came up with a new strategy provide the healthy soda drink with the snack and be profitable at the same time. According to Ryder (2013), “PepsiCo introduced the “Power of One” in which PepsiCo purchased the two largest bottling groups, New York based Somers Pepsi Bottling Group (PBG) and Minneapolis based Pepsi-Americas. This merge gave PepsiCo direct control over 80% of its bottling network” (p.1), their new strategy
The threat of the entry of new competitors is very low in the soft drink industry. The largest competitors in this market are Coca-Cola and Pepsi. The fact that they spend approximately 2.5 billion dollars a year in the marketing campaign which makes it hard for a new competitor to enter the market and gain visibility. Another factor that inhibits new competitors is the fact that both Coke and Pepsi have built a high level of customer loyalty and brand image. Both Coca-Cola and Pepsi are generous with their retailers giving them margins of 15-30%. These relationships build loyal retailer groups. One other strength of these top soda producers is the fact that they have non-compete agreements with their bottlers
Coke and Pepsi have been raging war for over a century now, turning their sodas into a multi-billion-dollar industry. Coke has been able to drive more earnings for its bottom line, and while Coke’s net income has been trending downward in recent years, it manages to stay ahead thanks to superior margins. Pepsi, on the other hand, has produced consistent net profit margins of around 10%, while Coke margins have been in the 15-18% range for the past several years (O’Brien). Every company has a Market Cap, which is basically a fancy way of saying how much the company is worth, and Coca-Cola’s market cap is a whopping $180 billion. Pepsi’s Market Cap is $150 billion, which may not seem like a big difference, but $30 billion is a lot of cheddar. Therefore, Coca-Cola owns 51% of the soft drink market, whereas Pepsi only owns 22% of it. Coke claims to own a total of 35 different brands, including Fanta, Sprite, Powerade, Vitaminwater, and many others. Pepsi owns 22 different brands, including 7up, Gatorade, and Mountain Dew “Coke (Coca-Cola) vs Pepsi - Soda
Started in 1916, PepsiCo, Inc. has grown substantially over the past 98 years. PepsiCo started with a formula for a carbonated beverage and has expanded its product line to include snacks products, other non-carbonated beverages, and food products. Pepsi is one of the most globally recognized brands and its other products lines are just as popular as the beverage. PepsiCo has been able to maximize their strengths and minimize their weaknesses from within the company in their research and development and marketing divisions. Using financial ratios, an in-depth look into the financial accounting of PepsiCo will determine if the company is as successful as it seems.
In conclusion, the Coca-Cola Company strives for the best and have a major concern for their customers. With Coca-Cola facing obstacles against different protestors about their product they still manage to carry on of the top soft drinks known throughout the world. Cola-Cola took the initiative to understand different cultures, religions, and languages in order to become a Multinational Corporation. Coca-Cola attempted numerous foreign market entry strategies in order to grow its customer base and its revenues. Some of the entry strategies foreign direct investment, joint ventures, franchising and exporting. Even though all these approaches faced many obstacles the administration was effective in overcoming the trials. (CHEPTEGEI, 2012)
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
...istent increase of up to 19% while Coca Cola's dividend growth rate has increased, but only at an average of about 11%. Another factor in which I, as an investor, would consider would be the ROE or return on equity. This is determined by net income dividend by the average common stock holders equity. In 2005, Coca Colas ROE was at 28%, while Pepsi Co's was also at 28%. But a review of a 10 year period(dividendgrowthinvestors.com) reveals that Pepsi Co. has been strong between 28 to 34%, while Coca Cola has been around 25 to 33%. That fact that Pepsi Co. has steadily outperformed Coca Cola on the rate of returns to its investors confirms my decision to lean towards Pepsi Co. Don't be misinformed, both companies are strong performers and lead their industry in most every category. I recommend any potential investor to do the math and research for themselves.