Best Investment Between Pepsi and Coke

Pepsi Co Finance Project

The taste of consumers is rapidly shifting. This is because they are becoming more health conscious and want products that meet these guidelines. In the case of Pepsi Co, the company is at a crossroads. They are known for providing a variety of sugary-based snacks and beverages. A few of the most notable include:: Lays, Ruffles, Doritos, Tostitos, Cheetos, Fritos, Santitas, Quaker oatmeal, grits, rice cakes, Aunt Jemima, Quaker Chewy granola bars, Captain Crunch, Life cereals, Rice-A-Roni, Quaker Oat Squares, Quaker Natural Granola, Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, 7UP, Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist, Mirinda, Domik v Derevne, Chudo, Agusha and ready to drink teas. ("Pepsi Co Annual Report," 2015) However, to fully understand if the company is a good long-term investment requires focusing on if any financial, human and intellectual capital should be invested. Together, these different elements will determine if Pepsi Co is a good long-term investment. (Standard and Poor's, 2015)

Would you invest your financial capital in Pepsi Co?

Pepsi Co is a good long-term investment. This is because the company has been rapidly diversifying into other areas that take into account the changing tastes of consumers. While at the same time, they are continuing to deliver the same kinds of products they traditionally enjoy. The result is that the firm can adjust to changes in the marketplace by offering an assortment of products and services. This is something their largest competitor (i.e. Coca Cola) has been unable to accomplish. In the case of Coke, they have continued to focus mainly on beverages and have not really diversified into other areas to health conscious consumers. The most notable include: the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, Glaceau Vitaminwater, Georgia, Simply, Minute Maid Pulpy, Del Valle, Ayataka, Bonaqua / Bonaqa and Schweppes. This is problematic for Coke, as they are struggling to keep up with shifts in consumer tastes who want healthy products. Second, they do not own any kind of food or snack companies. This means that Pepsi Co can continue to benefit even when someone is purchasing one Coke's products. ("Pepsi Co Annual Report," 2015) ("Coca Cola," 2014) (Standard and Poor's, 2015)

Would you invest human and intellectual capital in the firm as an employee?

Pepsi Co is a good place to invest human and intellectual capital. This is because the company is known for embracing diversity and respecting its employees. These factors create an environment where no ideas are overlooked. Instead, they are openly embraced in order to make the firm more competitive. For example, an employee recently suggested that Pepsi Co have their products used in fast food restaurants. The result is that the company is now including Fritos and Doritos with select items on Taco Bell's menu. This is giving the firm another avenue of diversifying away from the traditional marketplace. The employees play a critical role in helping the firm to think creatively and implement them as a part of their strategy. According to Forbes, these shifts have kept the company competitive with them saying, "As the market leader in global salty snacks and the number two player in beverages, PepsiCo benefits from cross category in store programs that increase the frequency in which their snack and beverage products are purchased together. Further, with a rapidly growing middle class in emerging and developing markets (35% of sales), PepsiCo has a tremendous opportunity to duplicate this strategy in other areas of the world. New products and healthier options are also having an impact. Doritos Locos Tacos, taco shells flavored like Doritos chips, have sold 325 million shells in Taco Bell restaurants over the past year and has given PepsiCo an expanded presence in the food service channel. Quaker Real Medleys is oatmeal that contains real fruit and nuts and was named the breakfast product of the year for 2012. Trop50 juices have half the calories of regular juices and Pepsi NEXT contains less sugar." (Goodman, 2014) This is showing how Pepsi Co is a good place to invest human and intellectual capital. They treat their employees with respect and will use their talents to make the entire organization stronger. ("Pepsi Co Annual Report," 2015)