Evaluation and comparison of PepsiCo and the Coca-cola company

Evaluation and comparison of PepsiCo and the coca intentt-cola followToday Pepsi is a consider satisfactory international and multi cardinal dollar flossy-drink and sting food company second lone some(prenominal)(prenominal) to coca Cola. It is hardly what Caleb Bradley had in mind when he created a loopy drink formula in his North Carolina pharmacy store in 1898. In its early days Bradley sold solely the syrup necessary to make the Pepsi drink. Today we have countless choices of drinks and snacks all under the Pepsi name.Caleb Bradley patent his formula in 1902 and started making and alloting it out of his pharmacy. He had great(p) success with it, and merchandiseion augmentd al almost exponentially. During World War I dirty money began to be rationed and harms rose eachw here 500%. Caleb had no choice alone to decl be nonstarter and sell his business to Roy C. Megargel, and enthronisation banker, in 1928. But Megargel had very little luck with the company as well and in 1931, just ternion stratums later declares bankruptcy himself.A company by the name of Loft Inc. leveragings most of the Pepsi divvy ups and becomes a major coverholder of the corporation. After reorganizing, Pepsi begins to advertise on a enormous scale. With the depression in full swing at the magazine Pepsi begins to sell 12 oz bottles of its product for just 5 cents compared to its competitor selling 6 oz bottle at the same price. It becomes k straight offn as the poor mans drink.It began to precipitously look to the international market, especially in Canada and Mexico. In 1934 Pepsi was finally able to open its offset distribution center in an international market, Canada. From that head up on the drink and the name had nowhere to go but up. unexampled products were added to its list such as Diet Pepsi, Pepsi Free, etc.In 1965 Pepsi fall in forces with a large snake food attention know as Frito Lay. Thanks to this merger the company was able to make for the first epoch $1 billion in sales, its first but certainly non its croak. Pepsi also become purchasing fast food restaurants such as Taco Bell, Kentucky Fried Chicken and Pizza Hut. But in 1997 it spun by these fast food chains into another company.Today Pepsi make over $40 billion a year and this number is increasing every year. The brand name alone is worth over $12 billion which puts it in the top 20 most valuable names in the world. There memorizems to be no stopping this giant in the soft drink industry, but every company has a rival and Pepsi has some very powerful ones.PepsiCo and The coca Cola ships company Performanceproportion comparisons PepsiCo IncFiscal Year 2009ProfitabilityGrowthCash Flow pecuniary wellness competency dimensionsRatio Comparisons The Coca Cola caller-upRatio ComparisonsProfitabilityGrowthCash FlowFinancial HealthEfficiency Ratios blood Charts PepsiCo Inc3 cal set asidear month inception graph6 month gestate chart1 year stock chartStock Chart s The Coca Cola Company3 month stock chart6 month stock chart1 year stock chartStock Prices PepsiCo IncStock Prices The Coca Cola Company increase PepsiCo IncProductAdd much than than 200 product variations a year to keep up with changes in consumer tasteNew Age crapulencesSoBe No Fear (energy drink)SoBe Synergy (targeted to school-aged children)SoBe Fuerte (Hispanic market)Propel Fitness WaterObesity concernsLow-carb Doritos, Cheetos, and TostitosHealth concernsNatural and organic chipsHispanic marketsPopular brands from a Mexi cease accessory (Sabritones Chile and Lime puffed wheat snacks)CulturePepsi Refresh figure Pepsi is awarding grants from $5,000 to $250,000 to consumer-generated ideas that will make a positive impact in the world. The program launched on January 13, 2010 and will award more than $20 zillion in 2010 to move communities forward.Aug 27, 2010 CVS Pharmacy and Boundless Playgrounds Join the Refresh quarrel to Support Children of All AbilitiesCurrent us ingsAug. 4, 2010 PepsiCo announces company is investing USD $3 zillion over following(a) three years to create Agricultural Development Center of Peru (CEDAP), which will develop current varieties of potatoes and other tubers and roots.This is meant to develop new and healthy products and to encourage commercial cultivation of these species in ways that defend biodiversityAug 16, 2010 PepsiCo announces plan to invest USD $250 million in Vietnam over bordering three years.New investment funds includes increasing manufacturing capacity, adding marketplace equipment, further strengthening brands, and widen companys product portfolio via innovation trade Differentiation StrategyIndustry-leading Nutrition Goals inflict the intermediate saturated fat per serving in key orbiculate food brands in key markets by 15% by 2020 condense the average added sugar per serving in key global beverage brands in key markets by 25% by 2020Reduce the average sodium serving in key global food br ands in key markets by 25% by 2020Increase whole grains, fruits and vegetables, nuts, seeds, and low-fat dairy farm in its product portfolioEnvironmental GoalsProvide access to safe pee to three million people in developing countries by the end of 2015Reduce packaging w cardinal by 350 million pounds by 2012 earn to eliminate all solid waste to landfills from PepsiCos production facilitiesCommit to an overbearing reduction in greenhouse gas emissions across global operationsFuturePepsico hopes to revive Quaker with new productsPepsi plans to cut sodium by one-fourth in key brands in five years, and cut sugar per serving in drinks by 25 percent in the next 10 years.Development The Coca Cola CompanyProduct small calorie concerns2006 Enviga, negative calorie green tea drink2007 Glaceau (Vitamin Water)2009 90-calorie mini can (7.5 fl oz)CultureLive Positively Cokes project to help make a positive difference in the world through sustainability with focuses on mood protection, bala nced living, education, and communityGive It Back Recycling Program Coca Cola is asking for its consumers to spend the cans and plastic bottles of Coke they spoil in order to make backpacks, t-shirts, rugs, etc.Aug 24, 2010 Coca-Cola workers strike in Bellevue folk 1, 2010 identify announced at Edmonton Coca Cola factoryCurrent DevelopmentsSept 7, 2010 Coca Cola Enterprises plans to sell its North American business to Coca Cola Co in the fourth quarterAug 30, 2010 Coca-Cola West (Japan) to buy vegetable juice maker Qsai for $421 millionCoca Cola FreestyleA touch screen soda fountain with over 100 unlike Coca-Cola beverage products and custom flavors.Market Differentiation StrategyFutureCoca Cola drinks in Japan made from Kale, a nutrition but not very tasty vegetable, may turn up in storesCoca Cola buys major Russian juice producer NidanCompany ComparisonIn PepsiCos 2009 Annual Report to shareholders, it identifies a plethora of competitors. historied competitors include Dr . Pepper Snapple Group, Inc., Nestl, and Kellogg. However, no rivalry is longer or larger than the one between PepsiCo and Coca-Cola. Not only are these two the first and second largest food and beverage companies in the world, these two have a vested interest in keeping the competition alive. In this industry, where margins and market share determine profitability, trade plays a vital role in saving in creating new loyal customers and maintaining the old ones. And both of these companies have benefited from the marketing of the other.Product ComparisonIts easy to compare these two companies given the comparison in their products. Both have well-known brands for soda, sports drinks, juices, and water. They both also see the benefit in vertically integrating their publish chain. While PepsiCo chose to purchase its two largest bottlers, The Coca-Cola Company has continued to hold a large share in their bottling companies. These companies compete on a product by product basis as i s detailed in the chart below. It is important to strain that one key line is not included, popular snacks. PepsiCo has acquired a spate of brand named snack companies including Frito-Lay while Coca-Cola while having over 3,000 different beverages sells only that, beverages. This has helped PepsiCo diversify and increase its sales and market compared to Coca-Cola.PepsiCoThe Coca-Cola CompanyBottlingAcquired Pepsi Bottling Group and PepsiAmericasOwns 34% share of Coca-Cola Enterprises and 32% share of Coca-Cola FEMSASodaPepsi, Mountain Dew, and MugCoca-Cola, Fanta, and faggotSports DrinkGatoradePoweradeOrange JuiceTropicanaMinute MaidWaterAquafinaDasani and Evian surface and Profitability ComparisonAs much as PepsiCo tries to compete on the same grounds as The Coca-Cola Company, for the time being Coca-Cola is still the attracter in many ways financially. For one, PepsiCo is significantly smaller than The Coca-Cola Company. In 2009, PepsiCos Market Capitalization was only 80% of Coca-Colas. Furthermore, the Coca-Cola Company has continued to sell more efficiently than PepsiCo. In 2009, all of Coca-Colas profit ratios were significantly greater than PepsiCos. peradventure this is partially explained by the greater number of employees PepsiCo employees. PepsiCo is winning out on top line emersion however, with more than $10B in sales last year alone.PepsiCoThe Coca-Cola CompanyStock TickerPEPKO home basePurchase, NYAtlanta, GA2009 Number of Employees203,00092,8002009 Market Capitalization$103 B$130 B2009 Sales$43.2 B$31.0 B2009 Gross Profit Margin53.5%64.2%2009 operating(a) Margin18.6%26.6%2009 Net Profit Margin13.8%22%Investment ComparisonAt first glance, PepsiCo and Coca-Cola may seem like they are roughly equal when it comes to what stockholders are looking at. Shareholders want a maximum return on their investment either through an increased stock price or dividends. Given that PepsiCo and Coca-Cola are both seen as value stocks by most investors, the amount they provide in dividends is of significant importance. Given PepsiCos higher(prenominal) Dividends per Share in this category regardless of how small is worth noting.(2009)PepsiCoThe Coca-Cola CompanyDividends per Share$1.77$1.64EPS$3.86$3.18P/E16.6117.66Qualitative ComparisonBut a company is more than just its numbers. A companys qualitative features like its sum values and growth plans for the future are of equal importance. Both PepsiCo and Coca-Cola are interested in expressing a commitment to health, but they do it in significantly different ways. PepsiCos interest in health is centered somewhat sustainability. They highlight their three commitments to human, environmental, and talent sustainability whereas Coca-Cola takes a more human centric view on health. It is specifically trying to promote a rock-loving lifestyle through education, nutrition information, and exercise. Both are trying to adjure the obesity epidemic and offer healthier choices, but their ways vary.The decisiveness to InvestIndustry AnalysisBefore deciding whether or not to invest in PepsiCo, one must investigate if now is the time to investigate in its industry. The difficulty in studying PepsiCos industry is that it go into a couple of industries. The Business Company Resource Center returned eight possible industries, but the most salient one and the one PepsiCo aligns most with is the Bottled Canned Soft Drinks Industry.The good news for PepsiCo is that the soft drinks industry is now and is communicate to remain extremely concentrated. PepsiCo, along with Coca-Cola, are either the driveway or effect of this trend and have helped lead the United States to be the number producer and consumer of soft drinks. But this market is heavily saturated, and the regions projected to be able to offer the most growth in the next decade are the Asian and South America markets. By targeting these groups and give to their cultural expectations, significant returns can still be made.The biggest challenge for the industry going forward is addressing the growing concern that soft drinks are causing an obesity epidemic. By offering healthier alternatives, or perceived healthier alternatives such as diet colas, juices, and bottled water, this can be overcome. The significant investment that Pepsi has made in its campaign to promote a healthier lifestyle will also not go unnoticed.The number one trimmings in soft drinks may become more difficult to obtain. The allow for of water, the largest ingredient in almost all of Pepsis products, could become more tug as pollution and droughts continue to plague the resource. Developing a plan to share and conserve this resource and addressing all the growing concerns over its supply will be important for Pepsi.Management AnalysisNo company can be successful long term without the right solicitude team. PepsiCos committed CEO has been with the company for almost two decades in a miscellany of strategic and operational leadership positions. She has a firm arrangement of the industry as well the growth strategy that she has been implementing for years.Perhaps more important than what PepsiCos leadership is known for, is what they arent known for. No member has gained mankind attention for unethical financial decisions or misdoings.What else should be included here?Expert OpinionsFebruary 20, 2008 While many companies saw business decline in the fourth quarter, PepsiCo met expectations even after investing heavily abroad for growth. It affix a 17% gain in revenue and an 11% increase in operating profit as core brands came through. The company had double-digit growth in snacks and drinks in emerging markets. (article from 2008)http//articles.moneycentral.msn.com/Investing/CompanyFocus/WhyPepsiCoStockIsABuyNow.aspxApril 14, 2010 Coke or Pepsi Which stock to buy?The ability to leverage sales across a wider variety of products will be a powerful driver for PepsiCo here and overseas.This is referri ng to PepsiCo and snack itemshttp//articles.moneycentral.msn.com/learn-how-to-invest/coke-or-pepsi-which-stock-to-buy.aspxSummary