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PepsiCo Annual eport Analysis
Pepsi Beverages Company (PBC) is a global beverage company popularly known as PepsiCo. The company operates in several countries in North America, South America, Europe, Asia, Africa and Middle East. Founded in 1898, the company operates with diverse portfolios, which include some of the world's widely recognized brands such as Pepsi, Dr. Pepper, Mountain Dew, Aquafina, Lipton, Muscle Milk and OCKSTA.
Objective of this paper is to carry out the analysis of PepsiCo annual report. The paper uses 2012 and 2011 financial data for the analysis.
Analysis of PepsiCo Annual eport
Answer to Question 1.
The amount of PepsiCo property and equipment on the company balance sheet for the 2012 and 2011 are $19.1 Billion and $19.69 Billion respectively. The amount of the depreciation expenses are $2.48 Billion in 2012 and $2.47 Billion in 2011. Amount of cash flow relating to depreciation was $2.68…
Morningstar (2013). Pepsi Inc. Debts. Pepsi Inc.
PepsiCo, (2012). PepsiCo Annual Report 2012. Pepsi.Inc.
PepsiCo, (2012). Our Critical Accounting Policies. Pepsi Inc.
PepsiCo, (2012). Global Business Units. PepsiCo Inc.
Income Statement Presentation
Income Statement Items
Net Income Trend
Cash Flow Statement
Cash Flow from Operations
Cash Flow from Investing Activities
The annual report of a company contains the information required for outsiders to assess the company's financial condition. In order that this is possible, a substantial amount of information must be gathered and presented in a format common to all companies. The official annual report document, the 10-K, must be filed by all public American companies, and many also include an informal annual report along with this document. This report will analyze the annual report of PepsiCo in order to better understand the company.
PepsiCo's auditor is KPMG. They provide their opinion on page 81 of the 2011 Annual Report. The opinion of KPMG with respect to the financial statements is as follows: "In our opinion, the consolidated…
PepsiCo 2011 Annual Report. Retrieved February 16, 2013 from http://www.pepsico.com/investors/annual-reports.html
MSN Moneycentral. (2013). PepsiCo. Retrieved February 16, 2013 from
In this text, I select PepsiCo as my company of choice for the analysis. Amongst other things, I will determine the impact PepsiCo's primary stakeholders, vision, and mission have on the company's overall success. I will also carry out an analysis of the five forces of competition and how they impact on PepsiCo. Further, in addition to conducting a SWOT analysis of the company, I will also discuss a wide range of other strategic management issues in relation to PepsiCo.
PepsiCo describes itself as "a world leader in convenient snacks, foods and beverages" (PepsiCo, 2012). Some of the most popular brands on PepsiCo's stable include but they are not limited to Pepsi Cola, 7UP, Lay's potato chips, Tropicana Juices, etc. Headquartered in New York, the company's main competitor remains the Coca-Cola Company. PepsiCo's current chief executive officer is Indra Krishnamurthy Nooyi.
Impact of PepsiCo's Primary Stakeholders, Vision,…
Batty, D. (2012). PepsiCo Recalls Contaminated Tropicana Kids Orange Juice Cartons. Retrieved March 9, 2009, from the Guardian website: http://www.guardian.co.uk/society/2012/may/03/pepsi-tropicana-kids-organge-juice-contaminated
Bloomberg News. (2012). PepsiCo Opens China R&D Center as Competition Heats Up With Coke. Retrieved March 8, 2009, from the Bloomberg Business Week website: http://www.businessweek.com/news/2012-11-12/pepsico-opens-china-r-and-d-center-as-competition-heats-up-with-coke
Brigham, E.F. & Houston, J.F. (2009). Fundamentals of Financial Management (12th ed). Mason, OH: Cengage Learning.
Cole, G.A. (2003). Strategic Management (2nd ed.). Bedford Row, London: Thomson Learning.
Thus, stimulation provides the realistic environment by allowing trainee to make mistake in a safe environment. The learning cycle is shortening because it provides immediate feedback.
However, the training through stimulation may be time-consuming to implement for employee operating heavy machines.
Despite the benefits that organizations could derive from traditional training method, the computer-based training method is growing. The computer-based training method involves delivery training content through internet, WAN/LAN technology, extranet, and satellite broadcast. The report recommends that PepsiCo should employ both traditional training method such as presentation methods and computer stimulation method or computer online-based training method. With recent development in information communication technology, computer-based training (CBT) has continued to serve as a basic training method for employee. The use of CBT is growing due to the benefits that organization is deriving from CBT system. Typically, the cost of implementing CBT compared to the traditional training method…
Curtin, L.B. Finn, L.A. Czosnowski, Q. A et al. (2011). Computer-based Simulation Training to Improve Learning Outcomes in Mannequin-based Simulation Exercises. American Journal of Pharmaceutical Education. 75 (6):, 1-6.
Dubois, D. & Rothwell, W. (2004). Competency-Based or a Traditional Approach to Training? T+D. 58( 4): 46-57.
Srimannarayana, M. (2011). Measuring Training & Development. Indian Journal of Industrial Relations 47 (1):117-125.
Pepsico (2011). Pepsico Inc. Annual Report 2011. USA.
Pepsico vs. Coca Cola
Pepsico vs. CocaCola
The purpose of this essay is to present the comparative analysis of two companies CocaCola and PepsiCo. The main objective of the essay is to compare and analyze financial performance of two companies in terms of ratios.
CocaCola is 126 years old company was created by Atlanta pharmacist John Pemberton in 1886. It has 3500 growing products available in 200+ countries. CocaCola receives 1,322,000 tweets per quarter, which is an obvious indicator of popularity (Our Company, 2011).
Pepsico is also a global company created in the late1890s by Caleb radham, North Carolina pharmacist. Company is a global food and beverage leader with net revenue of more than $65billion (Company, 2012).
They are direct competitors of each other over a century in the soft drink industry. We know that both companies have high degree of brand awareness and loyalty globally.
(2013, March). Retrieved March 8, 2013, from wikinvest: http://www.wikinvest.com/stock/Pepsico_ (PEP)/Data/Interest_Coverage_Ratio
(2013). Retrieved March 8, 2013, from Ycharts: http://ycharts.com/companies/KO/debt_equity_ratio
(2013). Retrieved March 8, 2013, from wikinvest: http://www.wikinvest.com/stock/Coca-Cola_Company_ (KO)/Data/Interest_Coverage_Ratio
(2013). Retrieved March 8, 2013, from Ycharts: http://ycharts.com/companies/PEP/debt_equity_ratio
PepsiCo's Leadership 
More than Chips and Soda: PepsiCo's Leadership and Vision
More than Chips and Soda: PepsiCo's Leadership and Vision
hile the PepsiCo Company is known primarily for its flagship brand, Pepsi-Cola, the organization is a global leader in the snacks and beverages industry. Throughout the company's history, PepsiCo executives have demonstrated the ability to lead the company to new heights. From the pharmacist formulating a refreshing new soft drink over 100 years ago, to today's executive team overseeing strategic mergers and acquisitions, their actions set PepsiCo apart. The vision of PepsiCo executives is responsible for its success taking PepsiCo to a position of global leadership. Through examining the company's history, I highlight the ability of PepsiCo executives to discern opportunity and capitalize on it, to pursue their mission of becoming the foremost consumer products company in the world. This essay summarizes PepsiCo's leadership achievements.
The Official Board.com. (2011). PepsiCo. Retrieved August 9, 2011 from: http://www.theofficialboard.com/org-chart/pepsico
Pepsi Brattleboro. (2007). History of Pepsi. Retrieved August 9, 2011 from: http://www.pepsibrattleboro.com/pepsihistory.html
PepsiCo 2010 Annual Report. (2011). Performance with Purpose. Retrieved August 9, 2011 from: http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf
PepsiCo Americas Beverages. (2011). The PepsiCo Family. Retrieved August 9, 2011 from: http://www.pepsico.com/Company/The-Pepsico-Family/PepsiCo-Americas-Beverages.html
Pepsi is vastly superior in terms of size and financial strength. Additionally, they would represent the vast majority of COC's sales volume. For COC, a strategic alliance with Pepsi may hold appeal as it would allow them to continue to build their company by giving them the financial strength to meet the needs of other customers. For Pepsi, a strategic alliance would have little benefit in terms of operations. There would be one potential benefits, however. One is that the Gallery brothers would still have a stake in the business. They are the main source of value in COC so there continued presence is essential. One caveat to that is with a large and stable customer like Pepsi they may lose their drive to create. Most of their major innovations have been responses to crises. In times of stability they have generally rested on their laurels, which would not benefit…
Enrico knew that, and therefore could rest assured that even when faced with a complete reorganization, his employees would accept the circumstances under which they would have to toil, and would, in the long run, excel!
Pepsico had a reputation for making essential decisions quickly and Roger knew that in order to maintain, and enhance that reputation a consolidation would have to take place. Currently, some of the decisions that had to be made, were making their bureaucratic way through the many levels of management, and days or weeks later, a decision would be made. This was not a healthy situation for Pepsico since many of their customers demanding much quicker resolutions. Another problem was that each separate division inside Pepsico showed wasted efforts by redundant employees. Human resources, accounting, payroll etc. were all separate entities for each division. These separate entities were the direct cause of duplicative efforts, costing…
Pepsi is making strides towards addressing some of the major challenges presented by the industry's external environment. The company's dual strategy towards increasing innovation has provided it with more and better innovation opportunities than its main rival, albeit less than smaller, younger firms. Pepsi's culture is more conducive to innovation and the company takes greater risks with business acquisitions in order to improve its product portfolio. In addition, Pepsi also has focused energy on growth in international markets rather than on bolstering its core products in the domestic market. Over time, this will provide Pepsi with strong diversification of income streams. Pepsi's demonstrated ability to operate outside of its core beverage industry also implies that the company will be better able to manage the threats faced by that business. If a sugar tax on soft drinks does through in the U.S., Pepsi will lose a lower percentage of its revenue…
PepsiCo Case Analysis
PepsiCo is the wold's lage snack and beveage company. PepsiCo enjoyed the envious position of maket leade of the convenience food industy with 21% maket shae and its next competito Kaft Foods had only 11% maket shae. PepsiCo manufactues, makets and sells sweet and salty snacks, cabonated and noncabonated beveages and poducts poduced fom oats and othe gains. PepsiCo had a ten-yea ecod of inceased net evenue and net income and paid thei shaeholde a gowing annual dividend. Recently, PepsiCo's stock pice declined most likely due to the U.S. financial cisis of late 2007 and all of 2008.
PepsiCo thought it might have to estuctue its snack and beveage business to impove oveall pofitability and evise the downtun in its stock pice, specifically it wanted to impove the pofitability of its intenational business though its ability to captue stategic fits between its vaious bands and poducts.…
references and cultural mores to navigate. These challenges may not allow for a single strategy for all international markets but several strategies for aligning products and brands and manufacturing and distribution process to the local customs.
Each division needs to determine its market place strategies. For PepsiCo American Beverages, the management should take a defensive stance in the carbonated beverage categories. They need to defend and grow its market share against Coke-cola. At the same time, the non-carbonated beverage group should take a strong offense to expand PepsiCo's product offerings to grow market share. PepsiCo Americas Food division should maintain the status quo; it has strong market share in many categories and has perfected the design and launching of new products. PepsiCo International needs to focus their product offerings and cost control of its manufacturing processes. The international division needs to answer the flavors desires of many different cultures. Expansion into new markets must be implemented in a thought full manner: where does the manufacturing take place, what are the costs of transporting raw materials and finished goods and is augmenting the product lines to include new flavors profitable?
Phase 1: Senior management needs to force on the restructure of the company. It needs to ensure that the Latin American businesses successful assimilate into the Americas food and beverage business units. Additionally, the management should focus on the management process for tracking results in the three divisions and how the tracking segments reporting system will work and how decisions will be made base on the results.
Phase 2: Maintain the status quo in the food and beverage divisions. This includes continuation of cost containment and new product development. The assimilation of the Latin America business needs to assesses the potential synergies in purchasing ingredients, manufacturing of products and distribution processes and vendors. The international division should spend 2008 evaluating its performance by market. This analysis will identify areas of strengths and weakness, which need to be capitalized upon or improved.
International Business Strategy and the Strategic ole of International Human esource Management
Brief Overview of Pepsi Co. Middle East
Strategy for competing on the global market
Diversified Business Model
Three-channel distribution network
PepsiCo Leveraging its dominant position
How pressure for cost reduction and pressures for local responsiveness influence strategic choice
Brief Overview of Pepsi Co. Middle East
PepsiCo is one of the biggest and leading food and beverage corporations in the world. The company as of 2012 generated over 65 billion dollars in net revenues. PepsiCo has a diverse global portfolio of brands that consists of numerous flavorful brands of snacks. PepsiCo Middle East is one of the six segments from which the primary company generates its revenues. PepsiCo Middle East, which is included in PepsiCo Asia, Middle East and Africa (AMEA), encompasses all businesses that deal with beverage, food as well as snack in the Middle East.…
Bailey, S. (2014). PepsiCo: A company overview. Market Realist.Retrieved 23 June 2015 from: http://marketrealist.com/2014/12/pepsico-company-overview/
DuBiotech. (2014). PepsiCo opens food and beverage innovation center in DuBiotech to drive growth across the Middle East. Retrieved 23 June 2015 from: http://www.dubiotech.ae/media/press-releases/6-news/497-pepsico-opens-food-and-beverage-innovation-center-in-dubiotech-to-drive-growth-across-the-middle-east
Kottolli, A. (2015). International Staffing Strategy.Retrieved 23 June 2015 from: http://www.geocities.ws/akottolli/International_Staffing_Strategy.html
Matthews, J. (2013). The Evolving Global Mindset and the Management of Organisations. Available at SSRN 2344640.
PepsiCo esearch on future consumer trends
Section 1 deals with pertinent models and concepts to technology-led innovation management. It includes models like, esearch and Development Model (DM) which is about relevant product knowledge with respect to customer demands; Market Actors Model (MAM), which is all about gathering market knowledge and consumer's expectations; Operations Management Model (OMM), which is about creating a valued food culture; Culture Technology Model (CTM), which is about marketing and product development teams work closely; Corporate Identity Model (CIM), which is about focusing on building a brand; and lastly, Strategic Foresight Model (SFM), which is about focusing on long-term plans.
Section 2 deals with debriefing the SFM model which is going to be used to measure PepsiCo's innovation management. Key reason for choosing this model to measure Pepsi's innovation management is because Pepsi itself uses this model to enhance its esearch and Development Efforts and…
Barker, J. (2011). The implications wheel. http://implicationswheel. com / (accessed December 27, 2011).
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De Geus, A. (1997). The Living Company. Boston, MA: Harvard Business School Publishing.
Ertel, C, and Randall, D. (2005). Moving beyond the official future. Special Report: Mastering Risk. Financial Times 16(6): 10-11.
Financial atios: PepsiCo
Financial ratios are great tools when it comes to the evaluation of the performance of a business entity. In that regard therefore, ratios are used by various stakeholder groups including but not limited to investors, suppliers, creditors, and even regulatory bodies. This text concerns itself with ratio analysis with my entity of choice being a publicly traded beverage company. For purposes of this discussion, I will concern myself with PepsiCo. PepsiCo regards itself "one of world's leading food and beverage companies…" (PepsiCo, 2013)
Key Financial atios
A financial ratio in the words of Moyer, McGuigan, ao, and Kretlow (2011, p. 70) "is a relationship that indicates something about a company's activities…" Various financial ratios have been developed over time. Some of the key financial ratio categorizations that could come in handy in this context include: profitability ratios, liquidity ratios, and financial leverage ratios. So as to enhance…
Baker, H.K. & Powell, G. (2009). Understanding Financial Management. Malden, MA: John Wiley & Sons.
Brigham, E.F. & Houston, J.F. (2009). Fundamentals of Financial Management (12th ed.). Mason, OH: Cengage Learning.
Gallagher, J. & Andrew, J.D. (2007). Financial Management: Principles and Practice (4th ed.). New York, NY: Freeload Press
Moyer, R.C., McGuigan, J., Rao, R. & Kretlow, W. (2011). Contemporary Financial Management (12th ed.). Mason, OH: Cengage Learning.
Edwards v. Pepsico
Company and Product Safety Issue
In the case of Edwards v. Pepsico, 268 Fed. Appx. 756, 2008 U.S. App, Mr. Edwards had three fingers cut off of his dominant hand while working on a bulk bag unloading unit (BBU) at his place of employment, Whitlock Packaging Corporation, Inc. (Whitlock). His lawsuit claimed that, under Oklahoma state-law theories of manufacturers' product liability and gross negligence, defendants were responsible for design flaws in the BBU and a failure to warn of safety concerns.
At trial, the jury learned about the BBU and the roles played by the various defendants. The BBU was designed for Pepsi-Cola Company, a division of Pepsico, Inc. (Pepsi), as part of a system for the production of ready-to-drink beverages bottled under the Lipton Tea name. Pepsi pressed for a hastened manufacturing schedule because it had acknowledged bottled tea as a profitable product. The BBU holds…
About OSHA. (n.d.). Retrieved from http://www.osha.gov/about.html
Edwards v. Pepsico, 268 Fed. Appx. 756, 2008 U.S. App.
OSHA Standards. (2011). Retrieved from http://www.osha.net/federal-osha-standards-and-regulations.html
Pearson, C., Wolfe, T.G., Whitmire, L. & Anderson, R.E. (2002). An Overview of Oklahoma
In September 1996, a mutual fund manager who had over 3 million shares in PepsiCo had told the CEO that no one understood why the restaurant group was not being sold off while the group was not being run efficiently. He had also mentioned that it did not fit in with other business of PepsiCo. Thus it is clear that the CEO of PepsiCo knows the reason, but is not able to take the action, or is unwilling to take the needed action.
Regarding the strategies to be applied now, the important aspects that they must cover are the situations of the organization's resources, circumstances and objectives. The first question here is of the difficulty with resources that the organization has now, and for this resources have to be collected, and at the same time, the process of collecting the resources must not interfere with the other aspects. So, the…
Indra Nooyi: A Transcultural Leader
As seen from the case study, Indra Nooyi's leadership is shaped by three consistently noticeable aspects that enabled her grow and become a success story. These factors include communication, relationship building, and moral compass (Case Study 10).
Communication: Indra Nooyi shows that communication skills are among the five CS of leadership. She believes that a strong moral compass, confidence, courage and competence would go to waste without communication skills. Besides listening as a key skill for leadership, Indra attends communication training to boost her abilities and flex those communication muscles that interact with the public. In fact, to Indra communication is so valuable that she maintains a blog at Pepsi that allows her to talk to her workers through posts on a weekly basis (Cunningham & Harney, 2012).
On elationship building, Indra does more than just writing blog posts week after week to…
Case Study 10. Indra Nooyi: A Transcultural Leader
Cunningham, J., & Harney, B. (2012). Strategy & strategists. Oxford: Oxford University Press.
Northouse, P. G. (2010). Leadership: Theory and practice. Thousand Oaks: Sage Publications.
Synergy that is realized when two or more companies merge takes the form of revenue enhancement and cost savings. Cost saving opportunities is often initiated to offset revenue decline. The merger between PepsiCo Inc., Pepsi Bottling Group, Inc., and PepsiAmericas was formalized on Friday 26th, February 2010. This came after PepsiCo Inc. had made clear its intentions to acquire all the outstanding shares of common stock in Pepsi Bottling Group and Pepsi Americas on April 20, 2009 (PepsiCo Inc., 2010). This paper seeks to discuss the revenue enhancements and cost enhancements that were realized after the combination of these companies.
After PepsiCo had acquired Pepsi Bottling Group and Pepsi Americas it realized good results in the first quarter of 2010. This was made possible by their efficient operational ability and solid market place execution. In fact, the benefits of acquisition of Pepsi Bottling Group and Pepsi…
PepsiCo Inc. (2012). PepsiCo Reports First Quarter 2012 Results. Retrieved July 16, 2012 from http://www.marketwatch.com/story/pepsico-reports-first-quarter-2012-results-2012-04-26
PepsiCo Inc. (2010). PepsiCo Delivers Solid First-Quarter Revenue and EPS Growth. Retrieved July 16, 2012 from http://www.pepsico.com/Download/Q1-2010-Earnings-Release-Tables-Final.pdf
One of the most effective ways of analyzing a business is to conduct a situational analysis. This is when there is a focus on looking at past / current economic, political, social and technological information to understand the opportunities / challenges impacting a firm. In the case of Pepsi Co, the company has been continuing to evolve with different changes that are taking place inside the industry. To fully understand what is happening requires examining various internal factors, resources, tangible / intangible assets, capabilities, core competencies and conducting a value chain analysis. Together, these different elements will highlight the strengths and weaknesses of Pepsi Co. ("Situation Analysis")
Internally, Pepsi Co has been focusing on increasing their reach through rapidly expanding. This occurred by identifying those firms that have the brands, which are seeing dramatic increases in growth and then acquiring them. Over the course of time,…
"Pepsi Co's Factory of the Future." Triple Pundit, 2012. Web. 24 Aug. 2012.
"Situation Analysis. Business Dictionary, 2012. Web. 24 Aug. 2012
"The Value Chain." Net MBA, 2011. Web. 24 Aug. 2012
Penzkopfer, Andres. The Market of Pepsi. Nordstadt: Verlag, 2004. Print.
The annual reports were used to derive ratios. The report will analyze each ratio in turn, comparing the respective performance of each company. Once this analysis is complete, the report will draw conclusions regarding the two companies and their potential role in our firm's investment portfolio.
There are three main types of ratios -- liquidity, solvency and profitability. In terms of liquidity, Pepsi exhibits superior performance. Pepsi has the better current ratio (1.28 to 1.10) and cash ratio (0.77 to 0.63). This means it is in a better position to meet its immediate cash needs. Pepsi also turns over its inventory faster (9.08 times to 5.72 times). Coke turns over its receivables faster (10.31 times to 10.04 times). It is worth noting, however, that while Coke is better, it is barely so; whereas Pepsi is significantly stronger than Coke in inventory turnover. Both companies, however, would be considered liquid.…
Iindra Nooyi exemplifies the strengths of a multicultural leader who thrives in a diverse organization committed to social responsibility. Born and raised in India in a middle class family, Nooyi transformed herself into an international powerhouse—one of the few women of color ever to serve as a Chief Executive of a major Fortune 500 company. During her twelve years as CEO of PepsiCo, Nooyi has made major changes to the firm that have changed company culture and also the position of the company in the market. Her legacy represents how leaders can be successful in multicultural environments.
Although she recently stepped down as the stalwart CEO of PepsiCo after twelve years, Indra Nooyi left a lasting legacy as a leader. The company’s first ever female chief executive, Nooyi “boosted revenue 80 percent during her tenure,” and also radically transformed the company culture and even its mission (Haigh, 2018,…
Bellis, R. (2018). Pepsi offers yet more proof that diversity isn’t just a Silicon Valley problem. Fast Company. https://www.fastcompany.com/4033937/pepsi-offers-yet-more-proof-that-diversity-isnt-just-a-silicon-valley-problem
Clifford, C. (2016). PepsiCo CEO: Hiring more women and people of color is a “business imperative.” CNBC, Oct 17, 2016. https://www.cnbc.com/2016/10/17/pepsico-ceo-hiring-more-women-and-people-of-color-is-a-business-imperative.html
Era, S.R. & Paige, C. (n.d.). Meeting the diversity challenge at PepsiCo. http://businessfacts.us/management/Meeting_the_Diversity_Challenge_at_PepsiCo_31.shtml
Glotz, J. (2018). Indra Nooyi’s candour about the challenges faced by female leaders will be missed. The Grocer. https://www.thegrocer.co.uk/people/diversity-and-inclusion/indra-nooyis-candour-about-the-challenges-faced-by-female-leaders-will-be-missed/570361.article
Haigh, M. (2018). Indra Nooyi shared a work regret on her last day as PepsiCo CEO. CNBC. 3 Oct, 2018. https://www.cnbc.com/2018/10/03/indra-nooyi-shares-a-work-regret-on-her-last-day-as-pepsico-ceo.html
Isidore, C. (2018). PepsiCo CEO Indra Nooyi is stepping down. CNN Business. 6 Aug, 2018. https://money.cnn.com/2018/08/06/news/companies/indra-nooyi-pepsico/index.html
Novak, D. (2018). Follow Indra Nooyi’s example. CNBC. https://www.cnbc.com/2018/09/12/pepsico-indra-nooyi-be-a-leader-people-want-to-follow.html
In this case, customers are not captive, they are free to exercise their desires, needs, and expectations and to choose the product that they feel most connected with. Usually, old customers will be loyal to either Coca Cola or Pepsi, they will not switch sides, on the one hand. On the other hand, is the new and potential customers that the two companies must fight over. Customers have great power over the two companies, over their strategies, and over the direction they will orient towards. Both companies' strategies should be determined by customers. The first thing to be considered for having a successful strategy is understanding the customer. Pepsi has been successful at this, while Coca Cola is still trying to figure out what their customers and potential customers really want.
egarding the bargaining power of suppliers, Pepsi seems to be one step ahead of Coca Cola in this field…
Foust, Dean (2006). Queen of Pop. BusinessWeek online. Retrieved August 29, 2007 at http://www.businessweek.com/magazine/content/06_32/b3996401.htm .
Brady, Diane (2004). Pepsi's Thousand and One Noshes. BusinessWeek online. Retrieved August 29, 2007 at http://www.businessweek.com/magazine/content/04_24/b3887061_mz017.htm .
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Bottled portable water was not a significant product in the beverage industry in the US two decades ago. The industry was dominated and controlled by such giants as Groupe Danone SA’s Evian and Nestle SA’s Perrier. By 2002, the industry was worth $3.5 billion. In 1997, Pepsi made attempts to join the bottled water market. Some of the efforts included buying a spring water company and a shot at selling a brand that was sparkling. However, these efforts did not yield fruit. The management came to the conclusion that the best method to create a successful water brand was to exploit a resource that was already in existence, i.e. the water treatment equipment already at the bottling plant locations. These were being used to purify water for the soft drinks that the company produced (McKay, 2002).
The then Pepsi beverage main CEO along with his team figured out that there…
At which point, PepsiCo will use the talent management model to help retain key individuals. This is significant, because it shows how all three of these different pieces work together, with the company being able to effectively identify and recruit talent. Then, show them how PepsiCo is different, in managing this talent. Together, these elements have allowed the company, to adapt to changes in consumer tastes and new competitors. However, in the future this model faces several challenges the most notable would include: retirement, globalization, maintaining an effective talent management system and the loss of talent to competitors. This is important, because it shows that while the current system is effective, the company must be prepared to adapt to these challenges in the future. It is through examining the current model and the challenges that if faces in the future; that highlights the effectiveness of PepsiCo's employee talent system.
Byham, W. (n.d.). Taking Your Succession Management Plan into the 21st Century. Retrieved Jul. 129, 2010 from DDI website: http://www.ddiworld.com/pdf/ddi_gyol_wp.pdf
Cummings, T. (2009). PepsiCo's Career Planning. Organization Development and Change. (pg. 464). Mason, OH: Cengage.
Silzer, R. (2010). Take the Pepsi Challenge. Strategy Driven Talent Management. (pp. 617 -- 620) San Francisco, CA: Josey Bass.
Silzer, R. (2010). Take the Pepsi Challenge. Strategy Driven Talent Management. (pg. 625) San Francisco, CA: Josey Bass.
Naked Juice Case Study
Today, increasing numbers of Americans are choosing healthy alternatives for the cola drinks that have dominated the beverage market for decades. Some of these alternatives include so-called “super-premium” brands that place a high priority on providing consumers with the best quality ingredients available. One such firm is Naked Juice which leveraged its humble direct sales beginnings into a national enterprise that was subsequently acquired by PepsiCo. The purpose of this case study is to identify the strategies used by Naked Juice to reach its current position in the beverage industry and an analysis of PepsiCo’s current marketing strategies and their implications for Naked Juice in its portfolio of subsidiaries. In addition, a discussion concerning the optimal key marketing metrics that the parent company should use to evaluate the performance of Naked Juice and an assessment concerning whether these measures should be different from its traditional carbonated…
Yet, the benefits of the technique above could have turned into disadvantages if the spokesperson lost his temper, didn't know what to answer or provided details that shouldn't have reached the media.
Fourthly, the corporation established non-stop toll-free numbers. These offered two major benefits: the softening of the corporate image (PepsiCo appeared as an entity open to dialogue and concerned about the safety of its consumers) and the permanent feedback provided by consumers. Yet, the main drawback is that some joking callers could use a false identity and report untrue events just to put the company on the wrong track and make it lose time. However, benefits are heavier than drawbacks, in this case.
Fifthly, the corporation used a slogan at the end of the crisis - "Pepsi is pleased to announce...nothing." This was a witty remark suggesting that the company remained the producer of the same qualitative beverage and…
1. Gordon, K.T. (2001). Under Fire - How a Small Business Can Handle a PR Problem. On the Internet at http://findarticles.com/p/articles/mi_m 0DTI/is_4_29/ai_73121444.Retrieved July 6, 2007.
2. Richardson, K. (2006). Public Relations in a Crisis: How to Make the Web Work for You. On the Internet at: www.sideroad.com/Public_Relations/public_relations_crisis.html. Retrieved July 6.
3. Internet Usage Statistics - the Big Picture (2007). On the Internet at: www.internetworldstats.com/stats.htm. Retrieved July 6.
Coca Cola & Pepsi
Coca-Cola and Pepsi are long-time rivals in the soft drink industry. In terms of their primary markets, the two have been engaged in an intense battle for market leadership for decades. hile this makes them natural comparables as investments go, they are significantly different in a number of other ways and this makes the question of which is the better investment a more challenging debate. Pepsi has spun off its bottling enterprises into a separate company, Pepsi Bottling Ventures, while Coca-Cola uses third party bottlers under contract. Pepsi has historically been the more diversified of the two companies, with its current businesses including Lay's and Quaker Oats/Gatorade. The nature of competition in the soft drink industry is international for both firms, but it is also intense. For both firms, the core soda products are viewed strategically as cash cows, but gains in market share and shelf…
Investopedia. (2011, 1). Reading the balance sheet. Investopedia. Retrieved June 9, 2011 from http://www.investopedia.com/articles/04/031004.asp
Investopedia. (2011, 2). Reading the income statement. Investopedia. Retrieved June 9, 2011 from http://www.investopedia.com/articles/04/022504.asp
Loth, R. (2011). Financial ratio tutorial. Investopedia. Retrieved June 9, 2011 from http://www.investopedia.com/university/ratios/
MSN Moneycentral: PepsiCo. (2011). Retrieved June 9, 2011 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=Balance&stmtView=Ann&symbol=pep
Pepsi or Coke
During 2010, both Pepsi Cola and Coca-Cola completed the acquisition of their previously independent North American bottling affiliates. PepsiCo, Inc. (NYSE:PEP) acquired The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS). These deals closed on February26, 2010. (Pepsi PNewswire, 2010) Almost immediately, Coca-Cola (NYSE:KO) announced that it would acquire the North American operations of Coca-Cola Enterprises (NYSE:CCE) and sell to CCE its bottling operations in Norway and Sweden. The Coke deals closed in October 2010. (Kwon, 2011)
PepsiCo has trumpeted the benefits of the consolidation with its bottler, including substantial cost savings and improved speed to market for new products. Coca-Cola named all the same advantages, headlined by an expected $350 million in eventual synergies (following one-time costs of $425 million). Coca-Cola assumed $8.8 billion of CCE's debt along with $580 million of employee benefit obligations. Notably, the bottling business is a significantly lower-return…
Coca-Cola, 2009 Annual Report, Retrieved February 26, 2011 from www.cce2009annualreport.com
Coca-Cola, 2010 Form 10K, Retrieved February 28, 2011 from http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7441829
Kwon, Esther (2011, February 15), "The Coca-Cola Company," Standard & Poor's Stock Report
Laboy, Carlos (2011, February 7), "The Coca-Cola Company," 'Credit Suisse Equity Research
Financial analysis is a tool that allows third parties to analyze corporate financial statements. One of the main reasons that the Securities and Exchange Commission requires that statements are compiled and presented in a consistent manner is to ensure that third parties will be able to use the statements to compare different companies. These comparisons can, among other things, help with investment decisions. This paper will compare PepsiCo and Coca-Cola Company, the two leading soft drink marketers in the world. PepsiCo is actually the larger of the two companies, because it is more diversified, with its snack food properties. These properties also alter the company's finances, creating certain points of difference between the two companies. This report will cover a number of different forms of financial analysis, arriving at a conclusion about which company has the stronger financial position.
The first set of ratios to be studied…
FTC. (2010). FTC puts conditions on PepsiCo's $7.8 acquisition of two largest bottlers and distributors. Federal Trade Commission. Retrieved May 19, 2012 from http://www.ftc.gov/opa/2010/02/pepsi.shtm
Leckey, A. (2010). Coca-Cola Co. outlook strong after big acquisition. Los Angeles Times. Retrieved May 19, 2012 from http://articles.latimes.com/2010/oct/31/business/la-fi-leckey-20101031
Loth, R. (2012). Financial ratio tutorial. Investopedia. Retrieved May 19, 2012 from
The slight decline in the cash ratio is not considered to be of significance in light of the generally solid current and quick ratios. The improvement in times interest earned comes in the face of a significant increase in long-term debt at PepsiCo. The company's debt ratio increased to 50.2% from 48.6%. This was largely a consequence of a nearly 65% increase in long-term debt.
Pepsi's operating margin is 18.1%, down slightly from 18.5% in 2006 and 18.37% in 2005. The company's ability to maintain margin stability illustrates strong managerial control over the company's cost structure. This is because Pepsi has little control over costs in the ultra-competitive segments in which they operate. They also have little control over factor costs such as high fructose corn syrup, the cost of which is based on commodity costs. The company's net margin declined slightly in 2007 to 14.3% from 16.05% in 2006,…
Coca-Cola Co. 2007 Form 10-K.
PepsiCo 2007 Annual Report
MSN Moneycentral. Retrieved March 24, 2009 at http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=KO&CP=0&PT=8
financial comparison of Pepsi and Coke. The comparison of the two companies is facilitated by the use of GAAP, which means that the financial statements of the two companies are constructed, broadly, according to consistent methodologies and criteria. As a result, there should be direct comparability between the statements of these two companies.
Two main techniques will be used for this comparison. The first is horizontal analysis, where the results of the company are compared against past results from the same company. The second is vertical analysis, where the results of each company are compared on a year-over-year basis according to how the different line items are weighted. The two companies can also be compared on this basis. Horizontal analysis allows the two companies to be compared on the basis of which company is growing faster or controlling costs better. The vertical analysis allows the two companies to be compared…
Overall, it is reasonable to conclude that the trends in the financials of these two companies favor PepsiCo, simply because the company appears to have responded to its financial challenges more quickly. For example, Pepsi had a massive increased in selling, general and administrative expenses in FY2010, but recovered to contain those expenses in FY2011. Compare this with Coca-Cola, where the firm's selling, general and administrative expense increased significantly in FY2011. It is worth considering, however, that the trends we are seeing may be reversed in the coming 2012 fiscal year. Both companies have the opportunity, having identified negative trends, to reverse those trends with solid financial management. When sales increase at a relatively slow rate, the best response is to cut the costs more rapidly. Both of these firms appear to take the view that revenues are cyclical and therefore it is not important to worry about slowdowns, but that is not the case at all. Both firms need to be more aggressive, because the vertical analysis shows that expenses as a percentage of revenues are increasing. This means that both companies have seen their margins reduced over the past couple of years.
Both Pepsi and Coke have had trouble recently on account of costs that are increasing much faster than revenues. However, we can see from this analysis that the costs associated with PepsiCo have been contained better than the costs that Coca-Cola faces. This tells us that Pepsi may well be responding better to a negative environment than Coke is. The company has maintained its margins better and in general outperformed its rival, based on horizontal and vertical analysis, over the past couple of years.
In turn, this complexity is driven by an increasing understanding of sustainability, going "green," and bringing ethical and moral philosophy into the business community. Besides increasing coffee outlets globally, Starbucks must count on corporate social responsibility as a key maxim of their production and marketing efforts. The company's "Global esponsibility strategy and commitments…. And the communities [they] do business with, as well as [their] focus of being an employer of choice, are also key compliments to [their] business strategies" (Schultz). PepsiCo echoes this in understanding that the market is now all people on earth, every country, every demographic. Pepsi confirms this commitment to CS noting, "At PepsiCo, our actions -- the actions of all our associates -- are governed by our Worldwide Code of Conduct. This Code is clearly aligned with our stated values -- a commitment to sustained growth, through empowered people, operating with responsibility" (Nooyi).
Indeed, "every business…
Bezos, J. (2011). Letter to Shareholders. Amazon.com 2010 Annual Report. Retrieved from:
Gooch, J. (April 2012). Letter to Shareholders. Radio Shack 2011 Annual Report. Retrieved from: http://ir.radioshackcorporation.com/phoenix.zhtml?c=84525&p=irol-irhome
Nooyi, I.K. (2011). Letter to Shareholders. PepsiCo 2010 Annual Report. Retrieved from:
I would have treaded the following alternative path so as to maintain the company's competitiveness on a global scale.
It was imperative to infuse more funds in Gemex so as to control the major portion of Gemex's stock prior to the fall of the Mexican currency. Pepsi must have accorded stronger emphasis on this matter, even though the family's head was unwilling to make a commitment. Pepsi realized their strategy is not heading in the correct direction as also the significance of business relations. It had been prudent on the part of Pepsi to analyze the Mexican economy in a better fashion so as to foresee the critical economic condition present. The most crucial and vital step which completely Pepsi failed to recognize was that it should have taken over Gemex in its Mexican market.
One more point remained that Pepsi should have laid out business activities around Gemex that…
PepsiCo in Mexico: Anatomy of an Affiliate's Exposure." Case Study materials.
Course Section and Code
Anytown's mayor has suggested placing the town for sale on E-bay as a publicity stunt in order to promote tourism to the town. The concern is that a purchaser may actually believe that he can purchase the town. The results in the Pepsi Harrier Jet Case would suggest otherwise. In that case, PepsiCo ran an advertisement suggesting that consumers could purchase a Harrier Jet with sufficient Pepsi product points. The court determined that reasonable people could not have believed that they could actually win a Harrier Jet. Furthermore, advertisements do not generally constitute offers. There are differences however. E-bay's terms of usage may be sufficient to place this scenario outside of the circumstances of the Pepsi Harrier Jet Case.
Executive Summary: Pepsi Harrier Jet
In the Pepsi Harrier Jet case, PepsiCo offered rewards based on points retrieved from products. Points could also be…
Larson, A. 2003. Contract law: an introduction. Retrieved February 5, 2011 from Expert Law,
West's Encyclopedia of American Law, 2d. 2008. Objective theory of contract. Retrieved February 5, 2011 from The Free Dictionary, website: http://legal-dictionary.thefreedictionary.com/Objective+Theory+of+Contract
West's Encyclopedia of American Law. 2011. Unilateral contract. Retrieved February 5, 2011
Due to the increasingly complex nature
Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?
CFOs are increasingly asked to engage in strategic planning for organizations, and to interact with other members of the managerial board in a meaningful fashion. According to Brewis (1999), "those who come from a purely accounting background are not generally expected to make such a speedy rise up the corporate ladder, but much has to do with the character of the individual and the mentoring system that the corporates provide." CFOs with an insufficiently broad perspective might simply focus on 'buying' solutions rather than engineering them through the careful and reasoned coordination of people and resources. CEOs must communicate well with…
Brewis, J. (1999). How a CFO can graduate to CEO. Corporate Finance, (175), 13-13. Retrieved
Freedman, C. (2003). Not just bean counters anymore. Chief Executive, (189), 22-22. Retrieved
The strategic group map for the energy/sports drink category should focus along the axes of energy and sport. An energy drink is basically a caffeine/sugar bomb, intended to provide a burst of energy and alertness. A sports drink tends to also have a lot of sugar, but not necessarily caffeine, and instead will have salt as a means of boosting electrolytes. Thus, the two categories can be quite a bit different from one another, but can also have some overlap. My strategic group map looks at how the industry is structured along these two axes (Ketchen & Short, 2014).
A drink that has no caffeine but focused on electrolytes and sugar would be viewed as a sport drink, in the upper right quadrant. Examples would be Gatorade, Powerade, and numerous other knockoffs thereof. In the lower left quadrant are the energy drinks that include the likes of Monster…
Ketchen, D. & Short, J. (2014). Mastering strategic management 2.0. Flat World Knowledge. Retrieved November 16, 2014 from http://catalog.flatworldknowledge.com/bookhub/reader/3085?e=ketchen_1.0-ch03_s04
Caffeine Informer. (2014). Top selling energy drinks. Caffeine Informer. Retrieved November 16, 2014 from http://www.caffeineinformer.com/the-15-top-energy-drink-brands
Euromonitor (2014). Sports and energy drinks in the U.S. Euromonitor. Retrieved November 16, 2014 from http://www.euromonitor.com/sports-and-energy-drinks-in-the-us/report
Organizational Ethical Dilemma
PepsiCo is a global provider of various drink and food products, from Pespi and Mountain Dew to Frito-Lay corn chips and Honest Tea. It has market share in diverse communities around the world. The main ethical challenge it faces is how to stay social responsible and culturally sensitive. This paper will use the Trevion, Nelson (1995) model of ethical decision making to focus on this issue, what it means, its impacts for stakeholders, and how it can be resolved.
The first step in Trevion and Nelson's (1995) model of ethical decision making is to gather the facts. The background of the case is this: since the 1960s Pepsi has been appealing to the youth generation both domestically and abroad. Its aim is to capture market share by endorsing activities and trends popular among the new generation: for example, in the 1960s it introduced Diet Pepsi to appeal…
Ciulla, J. (2005). The state of leadership ethics and the work that lies before us. Business Ethics: A European Review, 14(4): 323-335.
Ferrell, O. (2010). PepsiCo's Journey Toward an Ethical and Socially Responsible Culture. University of New Mexico: Daniels Fund Ethics Institute.
Jennings, M. (2006). The Seven Signs of Ethical Collapse. European Business Forum, 25: 32-38.
Lamberton, B., Mihalek, P., Smith, C. (2005). The Tone at the Top and Ethical Conduct Connection. Strategic Finance, 3: 37-39.
S. It is at a stage where it would be considered a cash cow. Yum is feeling out international expansion opportunities for Taco Bell, but there is little possibility that Taco Bell will supplant KFC and Pizza Hut as the key driver of economic growth. Those two firms have stronger product offerings for international markets. The role that Taco Bell plays, providing cash that can fuel global expansion of other brands, is the ideal role for the company within the context of Yum Brands.
There are a couple of companies that could make a good fit for Yum. They are Starbucks and Dunkin Donuts. These firms operate in complementary segments to Yum's existing portfolio and have core product offerings that can be taken overseas, thus the industry is attractive. The stock price for the former is particularly depressed in light of their recent struggles although the latter is perhaps a…
MacNealy, Jeremy. (2007). Fool on Call: Yum! Brands Wall of China. Motley Fool. Retrieved May 8, 2009 from http://www.fool.com/investing/general/2007/10/11/fool-on-call-yum-brands-wall-of-china.aspx
CNBC Video Report. (2008). CNBC Special Report on China Features Yum! Brands. CNBC. Retrieved May 8, 2009 from http://www.yum.com/news/pressreleases/081908.asp
Yum.com website: Multiple pages. (2009). Retrieved May 8, 2009 from www.yum.com
Taco Bell website: Multiple pages. (2009). Retrieved May 8, 2009 from http://www.tacobell.com/
Financial Analysis of Pepsi and Coca Cola
Synopsis of Companies
Pepsi and Coca-Cola companies boast of having two of the most recognized and preferred or desired beverages in the whole world. These two establishments are very fierce competitors in the beverage industry and incessantly compete with one another with the main objective of becoming the main and top distributor of not just sodas built but other beverages as well. This fierce rivalry that exists between the two companies is referred to as the "Cola Wars" and began in the period leading to the 1980s and has since then continued and become even more intense. In the period leading to the 80's Pepsi boosted and increased its market share, a time which coincided with Coca Cola Company being the top most distributor and supplier of beverages (PepsiCo Annual eport, 2013).. At this point in time, the two companies energetically and dynamically…
Goodman, A. (2013). PepsiCo, Re-Energized. Forbes. Retrieved from: http://www.forbes.com/sites/agoodman/2013/06/14/pepsico-re-energized/
O'Toole, B. (2014). Green Mountain stock soars on Coke partnership. CNN Money. Retrieved from: http://money.cnn.com/2014/02/05/investing/green-mountain-coca-cola/
Passport. (2013). Coca-Cola Co The SWOT Analysis, In Soft Drinks (World). Retrieved from: http://www.euromonitor.com/medialibrary/PDF/Coca-Cola-Co_SWOT_Analysis.pdf
PepsiCo, Inc. And Subsidiaries. (February 19, 2013). Form 10-K.
Alvarez began working for the firm at age 20 until he was 54. He was the oldest production supervisor. His performance was satisfactory but he was also known for short temper and obscene language. He got into a fight for which he was fired. The basis of the case was, therefore, the fight and not his age. The complaint was, thus, dismissed (AltLaw).
AltLaw eta. "United States Court of Appeals for the First Circuit." Forseca vs. Pepsi
Cola of Puerto Rico ottling Company (1998). Retrieved on November 23, 2008 from http://altlaw.org/v1/cases/1094540
Nadine Waller v Wendell R. Thames and Pepsi Cola Corporation."
Retrieved on November 23, 2008 at http://altlaw.org/v1/75253
ellis, Mary. "The History of Pepsi Cola by Caleb radham." Inventors. About.com.
Retrieved on November 23, 2008 at http://inventors.about.com/library/inventors/blpepsi.htm?p=1
usiness Editors. "MFHA Hits a Milestone with a $500,000 Pledge from Pepsi Cola to Create the MFHA usiness Development Institute." usiness Wire:…
AltLaw Beta. "United States Court of Appeals for the First Circuit." Forseca vs. Pepsi
Cola of Puerto Rico Bottling Company (1998). Retrieved on November 23, 2008 from http://altlaw.org/v1/cases/1094540
Nadine Waller v Wendell R. Thames and Pepsi Cola Corporation."
Retrieved on November 23, 2008 at http://altlaw.org/v1/75253
32). By contrast, PepsiCo benefitted from its wide product diversification. PepsiCo's product line includes popular snack names, while Coca-Cola has stuck to beverages. That has given PepsiCo the lead in overall sales, $43 billion to $31 billion in 2009 (see Dlugosch, 14 April 2010, p. 1). Question 4: Both companies' vertical involvement in their main global markets was determined by the consideration that contracts between soft-drink concentrate producers and bottlers allow the bottlers to have the last say in retail price, new packaging (but they could use only authorized packaging), selling and advertising in its territory (Martin, 26 March 2004, p. 5). This often causes strain on the relationships between bottlers, that very often are unable to produce and sell in large volumes, and the concentrate producer (Martin ibid). To accelerate revenue growth and be more agile and flexible both companies engage in vertical involvement in their main global markets…
Ali, T. (26 February 2010). The Coca-Cola Company to buy Coca-Cola Enterprises: Vertical Integration Continues. 1-4. Accessed 6 December 2011.
Badal, A. Coca Cola Company (2007). 33-40.
Please insert missing publication data.
As obesity became a hot top, outcry from parents, educators and government institutions began to criticize these arrangements. Coca-Cola has also been rebuked for its Harry Potter promotional advertising campaign, the costliest movie tie-in ever, that promotes children's literacy while simultaneously pushing Coke sales (aue, 2002).
In 2003, the Centre for Science and Environment (CSE) said soft drinks sold by Coca-Cola and PepsiCo in India contained high levels of pesticides such as DDT and malathion (Coke, Pepsi India deny pesticides in soft drinks).
The independent environmental group said it had found no pesticides in tests of Coke and Pepsi soft drink brands sold in the United States and attributed India's high pesticide residues to the soft drink and bottled water industry's use of an enormous amount of ground water as the basic raw material. For their part, Coca-Cola and PepsiCo denied the reports and resisted efforts government efforts to display…
Baue, W. (2002, January 3). Harry Potter hawks Coke, inciting ire amongst fans and consumer advocates alike. Institutional Shareowner. Retrieved January 26, 2005 from Web site: http://www.institutionalshareowner.com/news/article.cgi?sfArticleId=746
Coca-Cola 2003 annual report. Coca-Cola. Retrieved January 25, 2005 from Web site: http://media.corporate-ir.net/media_files/irol/94/94566/reports/ko_022704.pdf
Coca-Cola Enterprises' profit falls, (2004, October 28). Associated Press. Retrieved January 25, 2005 from Web site: http://biz.yahoo.com/ap/041028/earns_coca_cola_enterprises_3.html
Coke announces plan to alter school vending program in bid to curb the commercialization of schools (2001, March 19). Ethics Newline. Retrieved January 24, 2004 from Web site: http://www.globalethics.org/newsline/members/issue.tmpl?articleid=03190113315321
Coca-Cola and Pepsi are the world's two largest producers of non-alcoholic beverages. Both companies are global in scope, and market hundreds of different products. Each has multiple billion-dollar brands. Yet, there are significant differences between the two. Coca-Cola has typically focused on its soft drink businesses, while Pepsi has sought to build market size through diversification. Corporate restructuring has allowed Pepsi to divest itself of its restaurant businesses and its bottling business, leaving the company in recent years with a structure similar to that of its rival and a focus on the beverage and snack food industry. The intent of this paper is to analyze the two soft drink giants in the context of their finances. The financial performance of these companies derives from their business practices, so some attention will be paid to strategic issues in this report. The bulk of the report, however, will be focused on…
MSN Moneycentral: Coca-Cola Company. (2010). Retrieved October 23, 2010 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=KO&lstStatement=CashFlow&stmtView=Ann
MSN Moneycentral: PepsiCo. (2010). Retrieved October 23, 2010 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=PEP
PepsiCo 2009 Annual Report. In possession of the author.
Coca-Cola Company 2009 Form 10-K. In possession of the author.
Based on this situation of the Crush brand, the recommendation for the future strategy in the orange segment is that of investing more in the products and in their marketing in order to attract more customers. Still, this course of action would be expected to generate only a slight increase in sales, and this is due to the fact that the soft beverage market is already mature and consolidated, and major shifts are improbable.
Still, the orange sector represents a stable one, which would bring sustainable revenues. In a more specific formulation, Cadbury Beverages should recognize its orange segment as one retailing cash cow products. These products are able to generate suitable revenues, for investments which only maintain, rather then reinvent the product line. The profits generated from this segment are as such secure and the costs are lower, indicating as such, that even if the market for them does…
Kerin, R.A., 1995, Cadbury Beverages, Inc., Crush Brand
Though municipal untreated tap water can be used for premix (as opposed to post mix when soda syrup was mixed on site) that comes from the beloved soda fountain in most restaurants the marketing of the Aquafina brand is still likely to be present and bottled Aquafina is often sold there. If on the other hand an individual asks for a cup for water and then pours water from the "water" bypass tap on the soda fountain they are getting municipal tap water, usually unfiltered.
Endorsements are often developed in a similar way to those associated with other types of soft drinks and sports endorsements are common in the bottled water industry as even the Aquafina spin off products that contain the Aquafina (seven step) water and additional flavorings and sweeteners are considered by many to be healthier than soda, but to some degree this remains to be seen. As…
Aquafina (2010) Website Retrieved December 13, 2010 from
Brown, Bruce. The Skinny on Bad Bottled Water: Due diligence reveals why America drinks Coke & Pepsi. (January 2005) Web. Retrieved December 13, 2010 from
"Factory Accident Risks and Injuries" (November 2010) Web. Retrieved December 13, 2010 from
Quantus Environmental Life Cycle Assessment of Drinking Water Alternatives & Consumer Beverage Consumption in North America (February 2010) Web. Retrieved December 13, 2010 from < http://beveragelcafootprint.com/?page_id=102// >
Lipton Tea Can Do That
Term Marketing Project on Lipton Iced Tea
Lipton Iced Tea
Lipton Iced Tea is a beverage launched by Lipton in collaboration with Pepsico. Lipton is an established brand in the tea market while Pepsico has a prominent presence in the soft drink industry.
Ever since the popularity of tea started to grow in the West, particularly in the United States of America, the tea market has evolved through various stages. In order to dominate the market, major tea producers like Lipton, Tetley and Nestea have kept on coming up with innovative varieties of tea. Lipton, which has the reputation of being the most original brand in terms of variety launched cold beverage, Lipton Iced Tea, thus adding a new dimension to the tea market. Lipton Iced Tea enjoys even more popularity after the recent researches stated the healthy benefits of consuming tea. Moreover, the iced…
Anonymous. (n.d.) A Marketing Plan for Lipton Ice Tea. Retrieved from www.*****/samples/Marketing_Plan.pdf
Anonymous. (1993, October). The many facades of tea. Entrepreneur.
Thefind. (n.d.) Retrieved from http://www.thefind.com/food/browse-lipton-iced-tea
Lipton. (2010). Rainforest Alliance. Retrieved from http://www.liptont.com/tea_experts/sustainability/index.aspx
A low concentration of market share is always held by many rival firms making the competitive landscape more intense.
Threat of substitutes; Substitutes refer to other products in other industries. Pepsi deals with beverage industry and food industry for example. The private label food products that are low priced compared to those of Pepsi which is highly priced, is leading to price wars as customers opt for cheaper products.
Buyer power; The purchasing power of buyer increases when suppliers are many and few buyers of a product and is low when buyers are many with few suppliers'. It's important for Pepsi the behavior of their customers in order to lay effective strategies.
Supplier power; Suppliers' if powerful can exert an influence on the producing industry. As a producing industry, Pepsi can use this platform to establish a buyer-supplier relationship and capture some of the industry profits. This is possible through…
NetMBA,(2010). Strategic Management: Value Chain. Retrieved on December 2, 2011 from http://www.netmba.com/strategy/value-chain/
Prenhall, (2010).Enterprise Integration: The Pepsi Challenge. Retrieved on December 2, 2011 from http://wps.prenhall.com/bp_laudon_essbus_7/48/12303/3149766.cw/content/index.html
QuickMBA (2010). Porter's 5 Forces: A Model for Industry Analysis. Retrieved on December 2, 2011 from http://www.quickmba.com/strategy/porter.shtml
Summary of the Company
Coca-Cola is a manufacturer and sometimes distributor of non-alcoholic beverages. The company was founded in 1886 in Atlanta, where the company is still based. It was concocted by John Pemberton, who then sold the product in soda fountains and pharmacies. The name comes from key ingredients, including cocaine and Kola nut, and the drink was initially marketed as a medical tonic. Coca-Cola was initially a syrup that was sold, to which carbonated water was added at the time of dispensing. The company spread nationwide in the early part of the 20th century, and began overseas expansion (Bellis, 2015).
The first major shift in the business model came in the 1960s when the soda fountain -- the main distribution point for the product, began to fall out of favor (Bellis, 2015). To some extent, this was replaced with fast food restaurants, another primary distribution point,…
Bellis, M. (2015). The history of Coca-Cola. About.com Retrieved April 24, 2015 from http://inventors.about.com/od/cstartinventions/a/coca_cola.htm
Coca-Cola Form 2014 Form 10K. Retrieved April 24, 2015 from http://assets.coca-colacompany.com/d2/78/7d7cad454f3fbd033d55d786b890/2014-annual-report-on-form-10-k.pdf
Hebblethwaite, C. (2012) Who, what, why: In which countries is Coca-Cola not sold? BBC News. Retrieved April 24, 2015 from http://www.bbc.com/news/magazine-19550067
Interbrand (2014). Rankings. Interbrand. Retrieved April 24, 2015 from http://www.bestglobalbrands.com/2014/ranking/
Coca-Cola's PowerAde is one of the primary rivals of PepsiCo's Gatorade in the sports beverage market. Gatorade is the most popular sports beverage drink "with sales of 553 million cases last year" (PowerAde seeks to gain zero-calorie consumers to rival Gatorade, 2011, Sports Business Daily). However, PowerAde has undertaken some aggressive moves to position itself ahead of its rivals. In 2011, PowerAde replaced another of its rivals, Vitamin Water "on the sidelines of 88 NCAA non-football championships, including baseball and basketball, giving it wide-ranging marketing rights" (PowerAde seeks to gain zero-calorie consumers to rival Gatorade, 2011, Sports Business Daily). PowerAde sales have tripled in the last ten years, showing Coca-Cola's ability to expand its marketing outreach in this area.
PowerAde has positioned itself as a lower-cost alternative to Gatorade, offering the same electrolyte replenishment at a lower price. But overall, Coca-Cola does not…
Keep playing campaign. (2008). Marketing case studies. Retrieved November 27, 2011 at http://marketing-case-studies.blogspot.com/2008/05/keep-playing-campaign.html
McWilliams, Jeremiah. (2011). Gatorade spin-offs amp up sports drink battle. The Atlanta
Constitution. Retrieved November 27, 2011 at http://www.ajc.com/business/gatorade-spin-offs-amp-797817.html
McWilliams, Jeremiah. (2011). PowerAde, Gatorade go after youth market. The Atlanta
WikiNerdia allows the users to ask questions and all the nerd community members answer the questions. People normally trust the reviews and answers of the customers more than the brand. Giantnerd gets the benefit of their fan engagement and ultimately the brand trust increases. Customers can be your sale force and work for any company if the company can get the benefit by engaging the audience. A brand must think of multiple opportunities for the customers so that they can spread the word about the company. eal-time engagement opportunities and exclusive social communities are the tools which can turn existing customers to word-of-mouth advocates (Goldman, 2013).
Social Media will have a huge impact on business over the next decade, especially on the recruiting matters. Social media technology presents exciting opportunities for the recruitment industry. A research has highlighted that Twitter, LinkedIn and Facebook are the most used social media websites…
Goldman, J. (2013). Going Social: Excite Customers, Generate Buzz, and Energize Your Brand with the Power of Social Media. New York: AMACOM.
Hensel, K., & Deis, M.H. (2010). Using Social Media to Increase Advertising and Improve Marketing. Entrepreneurial Executive, 15, 87+. Retrieved May 16, 2013, from http://www.questia.com/read/1P3-2191652481/using-social-media-to-increase-advertising-and-improve
Libert, B. (2010). Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. New Jersey: John Wiley & Sons.
Mathieson, R. (2010). The on-Demand Brand: 10 Rules for Digital Marketing Success in an Anytime, Everywhere World. New York: AMACOM.
Pepsi is a good model for my objectives because they are not only a highly successful business but they also make strong contributions to the different countries in which they operate. Pepsi donates to charities and builds its enterprise in a manner that supports local businesses. hat Pepsi does is they promote local bottlers and they help those bottlers to build their businesses. Ultimately, this helps Pepsi to build its business but beyond that it also helps Pepsi to exceed on a corporate level.
Overall, I view Pepsi as a business to emulate both in terms of its general business success as one of the world's most admired brands, but also as one of the most successful business in terms of community involvement. I look at a program like the Pepsi Refresh program and I see a company that has a strong involvement in the community, to the extent that…
Schwartz, a. (2010). Pepsi Refresh Project announces do good for the Gulf finalists. Fast Company. Retrieved November 19, 2010 from http://www.fastcompany.com/1686659/pepsi-refresh-project-announces-do-good-for-the-gulf-finalists
PepsiCo. (2010). Overview. PepsiCo. Retrieved November 19, 2010 from http://www.buec.udel.edu/antilj/Buad%20880/pepsi-gatorade/PepsiCo%20Corporate%20Overview.pdf
The innovation and determination that saw Nooyi's promotion and make her such an excellent role model is demonstrated n her direct decisions. She was instrumental in PepsiCo's acquisition of Quaker Oats and its move (somewhat) to healthier products, while at the same time diverting resources to the company's fast-food chains, making them one of the profit centers of the company (Graham 2006). These actions dictated the general shift in policy within the company, and the reallocation of resources necessarily changed the organizational structure of PepsiCo to some degree. Nooyi continues to lead by example, which is one of the reasons PepsiCo has remained so strong.
Brenda Barnes leadership style while on the job has been somewhat eclipsed by the fact that she left PepsiCo right when she was heir apparent to the CEO position in order to spend more time with her children (Quick et al. 2008). Her career has…
Graham, S. (2006). Diversity: Leaders not labels. New York: Free Press.
Lussier, R. & Achua, C. (2007). Leadership: Theory, Application, & Skill Development. Mason, OH: Cengage.
Quick, J., Cooper, C., Gavin, J. & Quick, J. (2008). Managing Executive Health. New York: Cambridge University Press.
The first new market to be opened would probably be Canada or Mexico (considering the fact that the United States is the company's home market). This decision is made easier by observing the beating that alMart took in Europe and in Asia a short while ago when attempting to enter those markets.
An article in "The Times" on July 29, 2006 stated the following; "al Mart, the world's largest retailer, abruptly pulled out of Germany yesterday....In a humbling admission of defeat, al Mart said it would sell its 85 German stores to the rival supermarket chain Metro and book a pre-tax loss of about $1 billion on the failed venture." (Times 2006)
Since al Mart is one of the world's largest companies, and still took a beating, it might behoove the company to concentrate more on creating new products, while building strong markets that are conducive to drinking our product…
Brady, D. (2004) Pepsi's Thousand and One Noshes, Business Week, June 14.
Faust, D., (2004) Things go Better with Juice, Business Week, May 17
Wal-Mart Pulls out of Germany at cost of $1 Billion, (2006), The Times, http://business.timesonline.co.uk/article/0,13129-2290398,00.html , Accessed October 7, 2006
Branding & Product-Market Expansion
Corporate Branding and Product-Market Expansion
Growth strategies developed within companies vary according to the nature and dynamics of the market or industry that the company's products and services are competing in. Different strategies are utilized, such as increasing market penetration, undergoing a market expansion, implementing vertical integration, or developing innovative/creative ideas for the market/industry. In the market of consumer goods and services, a prevalent practice and the strategy that has proven to be economically viable and effective in strengthening corporate branding is through product-market expansion.
In product-market expansion, the company increases its growth through the development and launch of additional products and services that are still categorized under the corporate brand but extends the company's scope by expanding or adding more markets apart from the existing markets that the company already operates in. In product-market expansion, the company thinks about the specific market that it wants…
sustainability and reviews the implications and impact of various sustainability modes, all of which appear to be positive. To begin this review requires coming to an understanding of what sustainability is. As the Interface (2008) website describes it, "Sustainability can be many different things -- a motto, an ideal, a way to do business, a way to live your life or a call to action." Because this seems an appropriate way to view the many aspects of sustainability, this paper adopts this viewpoint as well.
Raven (2002) discusses how we got to this point facing the difficult challenges of human sustainability. Over the course of 400 generations, or about 10,000 years, the human population has grown from several million to over 6 billion. Humans continue to depend on a series of ancient, genetically and socially determined habits and attitudes which seem dysfunctionally inappropriate for modern society. As a consequence then,…
United Nations. 1987. Our Common Future, Chapter 2: Towards Sustainable Development Retrieved on May 5, 2011 from http://www.un-documents.net/ocf-02.htm
What is Sustainability. 2008. Retrieved on May 5, 2011 from http://www.interfaceglobal.com/Sustainability/What-is-Sustainability-.aspx
Whiteman, G. 1999. Sustainability for the planet: a marketing perspective. Conservation Ecology 3(1): 13. Retrieved on May 5, 2011 from:: http://www.consecol.org/vol3/iss1/art13/
Naked Juice Company started by Jimmy osenberg in Santa Monica in 1983. The company began as an operation out of a house, where the juice was made, and it was sold on the beach to sunbathers. The company's products were popular, and it began to professionalize. The first step was to secure distribution in California. Over the past 21 years, however, Naked Juice has become a much larger brand. Distribution now spans all 50 states, Canada and the UK (NakedJuice.com, 2014).
At the heart of the Naked Juice concept is that the products are all-natural, where the sweetness and richness of flavor is derived from the natural sugars in the fruit juice. The natural fruit juices are also intended to have a high level of nutrients, and are free from preservatives as well (Lifestyle Direct, 2014). It is on these principles that the brand was built, and gained a following…
Lifestyle Direct. (2014). Naked Juice & Smoothies. The Nibble. Retrieved March 16, 2014 from http://www.thenibble.com/reviews/main/beverages/juices/naked-juice.asp
NakedJuice.com. (2014). How we got here. Naked Juice Company. Retrieved March 16, 2014 from http://www.nakedjuice.com/our-purpose
Tepper, R. (2013). Naked Juice class action lawsuit settlement over health claims means 49 million for consumers. Huffington Post. Retrieved March 16, 2014 from http://www.huffingtonpost.com/2013/08/28/naked-juice-class-action-lawsuit_n_3830437.html
Kim, S. (2013). Naked Juice class action settlement offers up to $75 per customer. ABC News. Retrieved March 16, 2014 from http://abcnews.go.com/blogs/business/2013/08/naked-juice-class-action-settlement-offers-up-to-75-per-consumer/
products or service of your chosen organization, and two (2) key factors in the organization's external environment that can affect its success. Provide explanation to support the rationale.
De Beers is the world's famous diamond company, established in 1888, with proficiency in exploration, mining and marketing of diamonds. More than 20,000 employees make contribution to the communities in which we work. De Beers carries out profitable business which helps the government reach their aims of turning natural resources into natural wealth and is working to provide good long-term development for Africa. Anglo American and the Government of the epublic of Botswana are the two shareholders of De Beers, 85% and 15% respectively. This company is made up of fully owned partnerships, investments and subsidiaries. It is involved in most of the diamond chain value such as exploration in four continents, mining in Namibia, Canada, South Africa and Botswana; valuation, arrangement,…
Austin JE (2000) The Collaboration Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances. San Francisco, CA: Jossey-Bass.
Baker, R (2010). Pepsi Reveals Sustainable Business Plan', Marketing Week U.K., 19 October. Available from: http://www.marketingweek.co.uk/sectors/sustainability/pepsico-reveals-sustainable-businessplan/3019459.article
Barkay, T. (2013). When Business and Community Meet: A Case Study of Coca-Cola. Critical Sociology, 39: 277.
Bieri1, F. And Boli, J. (2011). Trading Diamonds Responsibly: Institutional Explanations for Corporate Social Responsibility. Eastern Sociological Society.
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, uffles, Doritos, Tostitos, Cheetos, Fritos, Santitas, Quaker oatmeal, grits, rice cakes, Aunt Jemima, Quaker Chewy granola bars, Captain Crunch, Life cereals, ice-A-oni, 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 eport," 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…
Coca Cola. (2014). Coca Cola. Retrieved from: http://assets.coca- colacompany.com/d0/c1/7afc6e6949c8adf1168a3328b2ad/2013-annual-report-on-form- 10-k.pdf
Pepsi Co Annual Report. (2014). Pepsi Co. Retrieved from: https://www.pepsico.com/Assets/Download/PEP_Annual_Report_2014.pdf
Standard and Poor's. (2015). S&P Stock Guide. New York, NY: McGraw Hill.
Goodman, A. (2013). Pepsi Co Re-Energized. Forbes. Retrieved from: http://www.forbes.com/sites/agoodman/2013/06/14/pepsico-re-energized/
Coca Cola Company is the biggest beverage company in the world. The company faces major competition and the top three competitors include Pepsico, Inc., Nestle S.A. and Dr. Pepper Snapple Group, Inc. The weaknesses of the company encompasses its substantial dependency on carbonates and the adverse perception of coca cola products being filled with high sugar content and therefore deemed unhealthy. The prospects that the company should seize encompasses the rise in growth and development of emerging markets and also the increase in need for healthier drinking options. The company's recent performance has been impressive as the company has generated increases in net income. However, the company should improve the sales revenue generated as this amount has been dwindling in the past three years. The company relies on debt to finance its assets as its debt to equity ratio stands at 188%.
The history of Coca-Cola started out in…
Coca Cola Company. (2016). About Our Suppliers. Retrieved from: http://www.coca-colacompany.com/our-company/ workplace-overview/suppliers/suppliers
Coca Cola Company. (2016). Form 10-K. United States Securities and Exchange Commission.
Coca Cola Company. (2016). Supplier and Customer Partnerships. Retrieved from:
32, and Pepsi's ratio is .29. These are close, but suggest that Pepsi is actually able to generate more revenue for every dollar of property and equipment it owns.
This makes sense given the operational differences at these companies; as noted above, Coca Cola does not actually own or operate all of the production elements for its products, thus it makes sense that is has much lower property values than its rival Pepsi, which is more fully integrated (Coca Cola, 2012; Pepsi, 2012). This also suggests, however, that Pepsi's revenue generation and overall value is more tied to its physical properties, plants, and equipment than is Coca Cola, meaning expansion could ne more costly for the company (Palepu, 2007). In this way, productivity might not transfer into long-term efficiency and profitability, which is something both investors and competitors should consider.
If determining human resource and plant/equipment productivity was…
Bharti Airtel is the world's fifth largest telecom company and it is famous for outsourcing everything except finance, marketing and sales. In the early days Bharti used to do all the business processes itself and it used to cost much more. Then they came up with the idea of outsourcing everything and just keep the departments of core competencies. And they kept marketing because in today's world every telecom company is providing the same services. The only difference between them is brand positioning that is how a product or a brand's image is in the consumer's mind. So, they made sure they pay specialized attention on that and for that they hired the famous Asian musician A. ehman for the special Airtel tune that attracted people and associated them with AirTel.
Airtel outsourced their IT processes to IBM, entire network operations to Ericsson and Siemens along with…
Bharti Airtel -- "Perfect example of outsourcing all its activities! But can it succeed in Africa?. (n.d.). India Business Blog | Finance Telecom Stock Market. Retrieved July 24, 2012, from http://trak.in/tags/business/2010/09/20/bharti-airtel-outsourcing-africa-business/
Bureu, E. (2010, April 1). Ericsson wins Airtel's $1.3-billion outsourcing project - Economic Times. Featured Articles From The Economic Times. Retrieved July 24, 2012, from http://articles.economictimes.indiatimes.com/2010-04-01/news/28469946_1_network-outsourcing-maintenance-and-management-contract-ericsson
Has Airtel outsourced too much? (n.d.). India Business Blog | Finance Telecom Stock Market. Retrieved July 24, 2012, from http://trak.in/tags/business/2009/06/12/has-airtel-outsourced-too-much/