Pepsico

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University Of Education 1

Business project

Prepaid By

Farooq Ashraf 104

Asad Afzal 128

Sheraz Saleem 129

Submitted To

Ms. Faiqa Shafqat

University Of Education Lower

Mall Lahore

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enilPue tcejorP

Acknowledgements

Executive Summary

o Objectives

o Mission

o Keys to Success

General Business Environment in Pakistan

Introduction to Industry

Company Summary

o Company Ownership

o Company History

o Company Locations and Facilities

Product and Services

o Product and Service Description

o Competitive Comparison

o Sales

o Technology

o Any Future Products and Services

External Environment : PEST Analysis

External Factor Analysis Summary

Task Environment : Industry Analysis, Opportunities and Threats

Internal Environment : Value Chain Analysis

Internal Factor Analysis Summary

SWOT Analysis

BCG Matrix

Financial Analysis

Grand Strategies

Conclusion

Recommendations

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Dedication

I dedicate my Project work to my family and many friends.

A special feeling of gratitude to my loving parents, whose

words of encouragement and push for tenacity ring in my ears.

I also dedicate this dissertation to my many friends and Our

Respected teachers. Who have supported us throughout the process. I

will always appreciate all they have done,

especially Mam Faiqa for helping us develop our technology skills,

for the many hours of proofreading, and Our seniors for helping us

to master the leader dots.

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ACKNOWLEDGEMENTS

We have benefited a lot from the project during the fourth

semester of our course BBA.

This project has been a rewarding knowledge. We have got in to

the various aspects of Pepsi Pakistan by analyzing various

information sources on the internet.

We take this opportunity to acknowledge the valuable assistance

who helped me in the successful assistance of this project.

And also express my special thank to Mam Faiqa (Faculty

Guide) who provide me an opportunity to do this project.

Last but not least We express our to all the persons and friends

who always encourage us and provide us support all the time.

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Executive Summary

Objective

The project was done by keeping following views In mind.

The project was done to find out the present state of pepsico

The study of distribution and marketing strategy of pepsico,the

major competitors in this category.

To collect data about the company to study its activating.

Way of operating.

To study its Internal & External environment of the pepsico

company.

To study about pepsico product available in markets and as there

market share individually.

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Mission

The mission regarding this project is as follows.

so that we can know how to study about market and to analysis

different aspects of it

How the companies surviving in the market and how they are

competition with their competitors.

By this project we can able to know the growth of he company.

With this project we can understand the position of the company in

the market.

So that we can able to know the products of the company in the

market and how they are going.

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Key to success

Success is more than an idea it is a state of mind. Although success is

relative to each individual, the key to achieving success is the demeanor

in which you go about living your life and taking advantage of

opportunities that come to you.

Whether it is in life or in business,

you should never take anything for granted and you should learn how to

make the most of the situations that are presented to you.

Learn to listen to your gut feeling

Have an open mind when it comes to unfamiliar ways of thinking

Accept new technologies and try to learn as much about them as

you can

Constantly educate yourself

Give back when you can

Know that being street smart is just as important as being book

smart

Care for yourself

Treat others with respect

Make self-examination a habit

Find a passion and commit yourself to it

To become a successful business man these are the main

point which are discussed above. And I am follow these point for

our company betterment and I work day and night for our success.

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scBorPBB Environment

nr enkoBenr

There are a number of factors which are conducive to

economic growth but the two most important factors, surpassing all

others, are law and order situation and provision of utilities at reasonable

rates. By law and order we mean, as the name implies, peace and

security of workers and entrepreneurs. We have voluntarily entered into

‘war on terror’ and for a few dollars we have gone very deep in it. Our

engagement has brought about terrorist which has no principles or

scruples. They blast bombs arbitrarily and at random. Nothing is safe in

the country including mosques and shrines. Our expenses on security

have gone up sky-rocketing with no results. Our budget for the poor has

been distorted. Transport system is completely jeopardized with NATO

supplies on and off.

Smuggling is now almost a legitimized business. Big bosses

are directly and indirectly involved in it. As for utilities power is on top.

The imbalance so-created in exchequer has made IPP Circular Debt

figure high and not manageable, hence persistent shortage of supplies

against demand in any season. That Coal and windmill generation are all

but dreams; hence no immediate respite. Gas shortage, due to

Baluchistan issue, has become grave. To top it all, insurgencies in

Baluchistan, political decision to make new provinces, general unrest,

the ever increasing crime, numerous SC Petitions, country wide protests

and strikes, ‘jalaogherao’ situation, isolation worldwide, US consistent

threats of sanctions and number of such things have baffled the

government. There is no rule of law.

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GDP

Pakistan is the 27th largest economy in the world acceding to GDP (PPP) and the

48th largest according to GDP (Current prices, US dollars). In 2010, Pakistan's

GDP (PPP) was US$ 464.897 billion and GDP (Current Prices, US dollars) of US$

174.866 billion. By 2011, Pakistan's economy GDP(PPP) will grow by 3.88

percent to US$ 482.91 billion. After which, Pakistan's GDP (PPP) is expected to

grow annually by 6.3 - 7.9 percent from 2012 to 2016. By the end of 2016,

Pakistan's GDP (PPP) will reach US$ 674.268.268.

GDP Rate Of Pakistan .

Years 2010 2011 2012 2013 2014

Pakistan 2.6 3.7 4.4 3.6 4.4

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Unemployment

In 2010, Pakistan's unemployment rate stood at 6.195 percent, as it had been for

the past 2 years. Forecasters expect that unemployment rate to remain

constant at 6.195 percent till 2016. With a high population growth, which also

means more people entering the workforce every year, the government plans to

increase investment in the production of electricity, education and healthcare, and

to supply more jobs to the growing labor market

Inflation

Pakistan has been pegged with high inflation problems in the last decade,

averaging 7 to 9 percent, and hitting a record high of 20.775 percent inflation rate

in 2009. In 2010, inflation rate (Average Consumer Price Change) for

Pakistan is at 11.73 percent. By 2011, inflation rate is expected to rise by 32.14

percent to 15.5 percent. However, experts forecasts that inflation rate will decline

in 2012 to 14 percent and from 2014 onwards, inflation rate will maintain at 7

percent.

High inflation in Pakistan is a big threat to the country's growing economy. Rising

food and utility prices, and limited wage growth have forced more women to enter

the workforce to provide for the family, despite of cultural resistance and domestic

abuse over this issue.

Pakistan posted a current account deficit of US$ -3.946 billion in 2010. The

country's current account deficit is also the 3rd highest in Asia, after India and

Vietnam. However, this figure has shown big improvement from the current

account deficit of US$-13.874 billion in 2008. The declines in global demand

during 2008 financial crisis for its exports and ongoing internal political instability

have led to Pakistan's huge current account deficit.

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From 2011 to 2012, the current account deficit is expected to increase by 67.9

percent to US$-5.134 billion from the 2011 figure of US$-3.056 billion. From

2013 to 2016, current account deficit will grow further between 21 to 31.6 percent,

and reach US$-12.535 billion by 2016.

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Pakistan Beverage Industry

In the 1950’s one of the most potent business community of

Pakistan, brimming with the spirit of Independence from the late 1940’s, decided

to launch a local brand of beverages. Pakistan Beverage Limited created the brand

Pakola which is still holding on its unique equity with the Pakistanis within and

outside the country. The Plant was situated in a 1,000 square yard area in the hub

of Karachi industrial area.

With the booming success of their brand and their well known reputation of

enterprising marketing and trade penetration, Pakistan Beverage Limited easily

became the target of many a multinational companies who were interested in

seeding their beverage businesses in this new land of tremendous opportunity

driven by its demographics. In 1979 Pepsi Cola International offered the Pepsi

Franchise to Pakistan Beverage Limited, the then Bottlers of Pakola Brands of

Beverage in different flavors.

Within five years of acquiring the Pepsi Franchise, Pakistan Beverage Limited

succeeded in replicating its previous business successes in the beverage market by

becoming the market leader in Soft Drinks in Karachi and then later in Hyderabad.

The dynamic partnership which was created in 1979 between Pakistan Beverage

Limited and Pepsi Cola International, indeed, is a force to reckon with in the

market which stands true till this day.

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This great success gradually trickled down to other cities of Pakistan in the south

and the North, over a period of time, making Pepsi and its brands the most popular

drink in the country.

Today, with almost 60 acres of accumulative area under manufacturing and

warehousing, Pakistan Beverage Limited is one of the most well equipped and well

managed Pepsi Cola Bottling Plant among all Pepsi franchises across the country.

Pakistan Beverage Limited currently consists of 5 manufacturing sites which

includes the Karachi Site, Yasir Fruit Juice, Hyderabad Plant, Quetta Plant and the

Aquafina site.

The Company has made tremendous progress under the dynamic leadership of its

Chief Executive/Managing Director Mr. Yasin Kassam Teli, his younger

brother Mr. Siraj Kassam Teli and his son Mr. Zaid Yasin. Not only did they

make advancements in leaps and bounds with respect to latest equipment

installation, but also got gelled together a blend of diverse group of highly

qualified professionals to run and manage the ever so growing business.

Pakistan Beverage Limited’s Karachi plant has four (4) state of the art bottling

lines and one (1) canning line which are all producing various brands and flavors

of Carbonated Soft Drinks, namely Pepsi, Mirinda, Mountain Dew, Diet Pepsi, 7

Up and 7up Free. The company also has another renowned PepsiCo brand of

drinking bottled water under the brand name of Aquafina which is produced at a

plant located on super highway and is PSQCA certified. Through its subsidiary

company, M/s Yassir juice Limited, it is manufacturing juice under brand name

Slice in PET,GLASS and Tetra packs.

With the vision of becoming the largest branded beverage manufacturing and

selling company, Pakistan Beverage Limited is marching ahead and continues to

provide superior quality beverages to the consumers with a quality backup service

to the customers in the market place.

Pakistan Beverage Limited, through another Group Company, M/s Pakola Products

Limited, also produces plain & flavored milk in Tetra Pack at its plant on Super

Highway. It is market leader in flavored milk with a wide range of different

flavored.

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Introduction of Pepsico

Inventor :

In the year 1898, a pharmacist Caleb Bradhman invented Pepsi in New

Bern in North Carolina. Its original name was “Brad’s Drink” and on

16th June 1903 the name was changed to Pepsi Cola.

Caleb Bradhe

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Invention Story by The Inventor

Pepsi Cola is, just like Coca-Cola, a creation of an

American pharmacist. In 1893, 5 years after the introduction of Coca-

Cola, Caleb Bradham began to serve his customers ‘Brad’s Drink’ from

his own soda machine. Because of the positive reactions of his samplers

he decided to begin advertising in 1898 and he named the drink Pepsi-

Cola. He founded the Pepsi-Cola Company in 1902. Pepsi-Cola is a big

success in the United States and the Pepsi-Cola Company decides to

export the drink to Mexico in 1907, other countries would follow soon.

Pepsi Cola is, just like Coca-Cola, a creation of an American

pharmacist. In 1893, 5 years after the introduction of Coca-Cola, Caleb

Bradham began to serve his customers ‘Brad’s Drink’ from his own soda

machine. Because of the positive reactions of his samplers he decided to

begin advertising in 1898 and he named the drink Pepsi-Cola.

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He founded the Pepsi-Cola Company in 1902. Pepsi-Cola is a big

success in the United States and the Pepsi-Cola Company decides to

export the drink to Mexico in 1907, other countries would follow soon.

Pepsi-Cola is referred to as the ‘kitchen cola’ in the 1960’s because

it’s much cheaper than competing drinks. The company decides to focus

their advertising strategy on the post-war baby boom generation. One of

the new slogans is: “Now it’s Pepsi, for those who think young”. Diet

Pepsi is introduced in 1964 for people who would like to live healthy.

The PepsiCo Company was founded in 1965 by the president of

the Pepsi-Cola Company and the chairman of Frito-Lay. It produces and

sells not only soft drinks like Pepsi, 7-Up, Mountain Dew, Miranda and

Gatorade but also snacks like Lays, Doritos,

Hamka’s and Quaker cereals in 192 countries.

Famous people like Michael Jackson, Lionel

Richie, Tina Turner, Shaquille O’Neal, the Spice

Girls, David Beckham, Britney Spears and Cindy

Crawford appeared in Pepsi commercials in the

1980’s and 1990’s to emphasize that Pepsi is the

drink for ‘the new generation’.

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Global Market Access

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Pepsico Europe PepsiCo Europe includes all beverage, food and snack businesses in Europe and

South Africa. Either independently or in conjunction with third-party partners,

PepsiCo Europe makes, markets, sells and distributes some of the most respected

household brands, including Lay's, Walkers, Doritos, Cheetos and Ruffles, many

Quaker-branded cereals and snacks, beverage concentrates, fountain syrups and

finished goods under various beverage brands, including Pepsi, Pepsi Max, 7UP,

Diet Pepsi and Tropicana. These branded products are sold to authorized bottlers,

independent distributors and retailers. In certain markets, PepsiCo Europe operates

its own bottling plants and distribution facilities. PepsiCo Europe also, either

independently or in conjunction with third-party partners, makes, markets and sells

ready-to-drink tea products through an international joint venture with Unilever

(under the Lipton brand name), and sells and distributes a number of leading dairy

products, including Domik v Derevne, Chudo and Agusha.

Pepsico Asia , Middle east & Africa.

PepsiCo Asia, Middle East and Africa (AMEA), includes all

beverage, food and snack businesses in Asia, the Middle East and Africa,

excluding South Africa. Either independently or in conjunction with third-party

partners, PepsiCo AMEA makes, markets, sells and distributes a number of iconic

PepsiCo brands, including Lay's, Chipsy, Kurkure, Doritos, Cheetos and Smith's,

many Quaker-branded cereals and snacks, beverage concentrates, fountain syrups

and finished goods under various beverage brands, including Pepsi, Mirinda, 7UP,

Mountain Dew, Aquafina and Tropicana. These branded products are sold to

authorized bottlers, independent distributors and retailers. In certain markets,

PepsiCo AMEA operates its own bottling plants and distribution facilities. PepsiCo

AMEA also, either independently or in conjunction with third-party partners,

makes, markets and sells ready-to-drink tea products through an international joint

venture with Unilever (under the Lipton brand name) and licenses co-branded juice

products to third-party partners through a strategic alliance with Tingyi under the

House of Tropicana brand name.

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Products & Services History

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PepsiCo's Beginnings

PepsiCo, Inc. was established through the merger of

Pepsi-Cola and Frito-Lay. Pepsi-Cola was created in the late 1890s by Caleb

Bradham, a New Bern, N.C. pharmacist. Frito-Lay, Inc. was formed by the 1961

merger of the Frito Company, founded by Elmer Doolin in 1932, and the H. W.

Lay Company, founded by Herman W. Lay, also in 1932. Herman Lay, former

chairman and CEO of Frito-Lay, was chairman of the board of directors of the new

company; Donald M. Kendall, former president and CEO of Pepsi-Cola, was

president and chief executive officer. The new company reports sales of $510

million and has 19,000 employees. Major products of the new companies are:

Pepsi-Cola Company: Pepsi-Cola (formulated in 1898), Diet Pepsi (1964) and

Mountain Dew (introduced by Tip Corporation in 1948).

Frito-Lay, Inc.: Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's

brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese

flavored snacks (1948), Ruffles brand potato chips (1958) and Rold Gold brand

pretzels (acquired 1961).

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1960’s

Doritos brand tortilla chips are introduced. They are destined to become

the most popular snack chip in the United States. Pepsi enters Japan and Eastern

Europe.

1970 PepsiCo moves from New York City to its new world headquarters in

Purchase, N.Y. The new corporate headquarters features a building by one of

America's foremost architects, Edward Durrell Stone (1902-1978), set on a 144-

acre campus amid an outdoor sculpture garden.

Frito-Lay begins a program of expansion. Over the next decade, the company

opens, on average, more than one new plant a year.

Pepsi is the first company to respond to consumer preference with lightweight,

recyclable, plastic bottles, and introduces the industry's first two-liter bottle.

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1974

Pepsi Co moves from New York City to its new world

headquarters in Purchase, N.Y. The new corporate headquarters features a building

by one of America's foremost architects, Edward Durrell Stone (1902-1978), set on

a 144-acre campus amid an outdoor sculpture garden.

Frito-Lay begins a program of expansion. Over the next decade, the company

opens, on average, more than one new plant a year.

Pepsi is the first company to respond to consumer preference with lightweight,

recyclable, plastic bottles, and introduces the industry's first two-liter bottl

1880’s

PepsiCo acquires Walkers Crisps and Smith Crisps, two of the United Kingdom's

leading snack food companies.

PepsiCo enters the top 25 of the Fortune 500 ranking.

1986

PepsiCo is listed on the Tokyo stock exchange.

Pepsi-Cola acquires Mug Root Beer.

PepsiCo purchases Kentucky Fried Chicken (KFC)

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1990’s

PepsiCo acquires Tropicana Products from Seagram Company Ltd., the biggest

acquisition ever undertaken by PepsiCo.

Frito-Lay becomes the snack chip leader in South and Central America as it enters

a joint venture with Empreseas Polar SA of Venezuela.

The Pepsi-Cola Company celebrates its 100th anniversary

Pepsi-Cola forms a joint venture with Unilever to develop and

market tea-based drinks.Lipton came in to existence from there.

PepsiCo acquires a controlling interest in Gamesa,

Mexico's largest cookie company.

PepsiCo signs the largest commercial trade agreement in history.

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2000’s

PepsiCo merges with The Quaker Oats Company.

PepsiCo announced its intent to acquire New Zealand snack

company Bluebird Foods..

PepsiCo and Calbee Foods Company announce a strategic

alliance to make and sell a wide range of food products in Japan.

PepsiCo introduces the first climate-friendly vending machines to the United

States.

PepsiCo and Tingyi Holding, one of the major food and beverage

companies in China, announce an agreement to form a strategic alliance in China.

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Fresh, spritz, totally hip, and magnetic to the young soda-loving

population, Mountain Dew is the penultimate item in our list

Diet pepsi is for the health conscious and diet, and daibaties people and in

the completion of diet coke.

7-Up is usually seen as the younger sibling to the Pepsi Cola brand, and is

largely overlooked in the United States

Aquafina is the one of the most useable product in the different

countries of world.

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Comparison between Pepsi & Coca cola

1. Coca-Cola was created in 1886 in Georgia, while Pepsi was created in

1893 in North Carolina.

2. Pepsi is sweeter than coke, despite what labels on the bottles say

about its sugar percentage.

3. Coke has a “vanillan” chemical, which gives it a vanilla taste, while

Pepsi has a more citrus flavor.

4. Pepsi is less carbonized than Coke, because it contains less CO2.

Which means that Coca-Cola drinks are more fizzy than Pepsi ones.

5. In order to compete with Coca-Cola, Pepsi created a new formula for

their “Pepsi Challenge”. It was a successful move, since people

preferred the distinguishable citrus taste of the less carbonated drink.

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6. Coke has a larger salt percentage than Pepsi. While in a 240 ml

serving Pepsi contains 20mg sodium, Coke contains 33mg.

7. Pepsi contains more caffeine than Coca-Cola. So, if you’re looking

for something to drink when you need a little bit more energy, you might

find Pepsi more appropriate.

This is an unbiased comparison of the two of the most popular

carbonated beverages in the world -- Coke and Pepsi. In spite of winning

in blind taste wars, Pepsi is less popular around the world (with a few

notable exceptions like India).

Comparison chart

Coke Pepsi

Sodium 50mg 15mg

Founded 1886 1898

Originally Brewed From Coca leaves and Kola Nuts Pepsin

Syrup Coloring E-150D E-150 D

Caffeine 34 mg/serving 37.5 mg/serving

Taste Sweet Sweet

Sugar Content 39mg 41mg

Carbonation content 80.9% Less

Calories 160 150

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Flavors available

COKE

Coca-Cola, New Coke which was renamed Coke II, Diet Coke (also

known as Coca-Cola Light), Diet Coke Plus, Coca-Cola C2, Coca-

Cola Zero, Coca-Cola Cherry Zero, Caffeine Free Coca-Cola,

Caffeine Free Diet Coke

Coca-Cola Cherry, Diet Coke Cherry, Coca-Cola with Lemon, Diet

Coke with Lemon,

Coca-Cola Vanilla, Diet Coca-Cola Vanilla, Coca-Cola with Lime,

Diet Coke with Lime,

Coca-Cola Black Cherry Vanilla, Diet Coke Cherry Vanilla, Coca-

Cola Black,

Coca-Cola with Orange (sold in the UK) Coca-Cola Raspberry, Diet

Coke Raspberry, and Tab (original Diet Coke, still available in some

countries)

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PEPSI

Pepsi Diet, Pepsi, Pepsi max, Pepsi One, Caffeine Free Pepsi,

Caffeine free Diet Pepsi, Pepsi Throwback, and Pepsi Next

Wild Cherry pepsi, Diet wild cherry pepsi, Pepsi Lime, Diet Pepsi

Lime, Pepsi Jazz in two flavors (Strawberries and Cream and Black

Cherry Vanilla), Pepsi Twist (lemon flavored in both regular and

diet varieties)

In Australia Pepsi samba is sold, it's a mix of mango or the tamarind

which is like America's version of the Pepsi summer mix they sell

here which tastes like Skittles.

Crystal Pepsi and Blue Pepsi (had quick and fatal runs and didn't

last long at all).

Pepsi X and Holiday spice has more caffeine then regular Pepsi and

is similar to the energy drinks but is not sold in the US.

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Taste

Although when compared in double blind taste tests, the majority of

people could not tell the difference in taste, people will swear they love

one or the other.

Marketing Approach

Pepsi has a bigger company. Pepsi tries to reach out to the younger

generation by appealing to pop culture. If you visit their website you will

be greeted with flashy pages containing pop music, cars, and fashion.

Coca-Cola's website also has links for music and sports, two arenas in

which soda-pop is often consumed; however, Coca-Cola's is less flashy

and uses a classical appeal, most likely because of Coca-Cola's long

history as the standard for cola beverages.

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Advertisement

Advertising Strategy of Pepsico

Pepsi’s target audience are mostly teens and young adults and

their advertising reflects this in every possible way.

The company changes its advertising strategy and image to

reflect the target's interests.

Pepsi makes sure that the advertisements reflect to the target

audience’s interests and nostalgia.

The advertising strategy includes cool, hip promos to attract

more of the target audience.

The advertising is mostly creative and has different elements like

music and sports other than bollywood.

Pepsi.com also plays an important role in advertising and attracts

target audience by giving access to options like downloads,

gaming, music mixing applications etc..

Advertising History

Pepsi has continuously focused on the current teen generation.

How Pepsi has used humor, music, sex appeal in advertising.

Ad expenditures for 2001 is $ 1,800,000,000

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Slogans

1939 - “Twice as Much for a Nickel”

1950 - “More Bounce to the Ounce”

1958 - “Be Sociable, Have a Pepsi”

1961 - “Now It’s Pepsi for Those Who Think Young”

1963 - “Come Alive, You’re in the Pepsi Generation”

1967 - “(Taste that beats the others cold) Pepsi Pours It

On”

1969 - “You’ve Got a Lot to Live, Pepsi’s Got a Lot to

Give”

1984 - “Pepsi. The Choice of a New Generation”

1985 - “New Generation” advertising continues

1992 - “Gotta Have It”

1993 - “Be Young, Have Fun, Drink Pepsi”

1997 - “Generation Next”

2000 - “Joy of Cola”

1012- “Dill mange moor”

2013-“Dill mange Abhi”

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Pepsi

while Pepsi had Britney Spears, Keshauntae Brown, Michael Jackson,

Mariah Carey, and One Direction. Junaidjamshed ,Alizafar,JunoonBnad,

here the same way brand embessedorsvary from country to country.

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Pepsi Sponsorships

Pepsi has always used the platform of sports and music to position itself in

subcontinent but Pakistan has witnessed some of Pepsi’s imaginative campaigns

and catchy lines lately regarding religious festivals such as Ramazan.

A question hence arises that why Pepsi would endorse Pakistan Idol?

Where some see Pepsi endorsing Pakistan idol as a strategic take on arch rival

Coca Cola’s far more famous expedition ‘Coke Studio’, others recall that Pepsi has

maintained its association with music and celebrities in Pakistan.

On the other hand, Pepsi has had a global association with popular music and pop

stars for decades. Some of the more famous brand ambassadors for the companies

were world renowned music artists like Michael Jackson, Britney Spears and

Beyonce.

“Our mission is to move at the speed of culture,” Bozoma Saint John, Pepsi's head

of music and entertainment marketing said.

“If we move too slowly we've missed the moment, and therefore our brand is no

longer relevant,” he further added.

Therefore, Pepsi has more than one reason to endorse the grand reality show of

Pakistani television, and whether it was part of Pepsi’s planning or not; sponsoring

Pakistan Idol will lead them into direct competition against the popular Coke

Studio.

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Pepsi Sponsor’s Cricket

It has official sponsorship deals with three major North American

professional sports leagues. Pepsi became the new title sponsor of the

“Indian Premier League” for the upcoming five seasons. Pepsi has

official sponsorship deals with Pakistan Cricket Team. Pepsi is the

largest sponsor in the sports world.

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Coca Cola

Coca-Cola had Santa Claus, Selena, Bill Crosby, Michael Jordan,

Paula Abdul, 50 cent, Courtney Cox, New Kids on the Block, Joe

Greene, The Temptations, Aretha Franklin, there brand embesiders

vary from country to country and they take new faces mostly in their

adds somehow the present policy is relate to this.

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Comparison As Availability

As describe above availability of coke favors it and the availability

declines of pepsi doesn’t favor’s it

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Comparison as to their Products

Pepsico

Though Pepsi's beverage brands may not be as strong, its snack food

business is enormous

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Coca cola

Here are some of Coke's biggest brands — 15 of them have reached $1

billion or more in retail sales

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Market share of pepsi and Coca cola

Coke has a big lead in cola market share over Pepsi, but Pepsi's

multiple business lines haul in more cash

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PesBico versus Coke Cola Advantages & Disadvantages

Snack Foods One could easily point to Pepsi's diversification into snack

foods as the primary difference between the two companies; however, I

would argue that Pepsi's embrace of snack foods is a symptom of Coke's

reign over the non-alcoholic beverage industry.

Soft Drink Beverage Pepsi is Coke's primary competitor, Coke's dominance is

not only manifest, but growing. According to Beverage-Digest's 2013

report, Coca-Cola holds 42% of the Carbonated Soft Drink (CSD)

beverage market versus a 28.1% share for Pepsi. While Coke's share

of that market increased by 0.1%, Pepsi's dropped by 0.4%.

http://www.beverage-digest.com/pdf/top-10_2013.pdf

http://www.beverage-digest.com/pdf/top-10_2013.pdf

B.B.A-iv-Evening


Market share of Pessico

Product Wise

Pepsi Co. is one of the world’s greatest maker of

food products that has captured the taste buds (and hearts, too) of the

munching public. In this list, find out the top 10 most sold product of

this global company. Dominated by the sodas that has made the

company what it is, the list also features some very surprising items that

will make your knowledge better

10.Quaker Oats.

And what a throw ball the first item on this

countdown is. Yes, one of the world’s leading producers of all things unnatural and

unhealthy, one of the vanguards of junk food fandom, is also the maker of the

healthy breakfast food Quaker Oats. This line of heart-friendly grains pulls in a

robust $2.5 billion a year.

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9.Lipton teas

Lipton teas are not exclusively PepsiCo.

products. Instead, they are produced in partnership with Unilever. Technically,

though, it belongs in the family. Like the other products on this list, it is tasty and

wildly popular. It earns for Pepsi Co. and Unilever about $3 billion dollars, same

as the next item on this list. It’s only ranked lower because of the non-exclusivity

product factor.

8. Doritos Tortillos Chips

The perfect snack food to team up with Pepsi’s

sodas, Doritos Tortillos Chips come in at number eight in this countdown for Pepsi

Co.’s most sold products. Crunchy and flavorful, it is an easy choice to get for

picnics, outdoor activities, and munch parties. It earns about $3 billion every year.

B.B.A-iv-Evening


7. 7-Up

7-Up is usually seen as the younger

sibling to the Pepsi Cola brand, and is largely overlooked in the United States. Its

story outside of the country, however, is different. Its worldwide annual sales reach

into about $3.5 billion dollars. That’s a very respectable figure for this still

refreshing, highly enjoyable soda.

6. Tropicana

Proving that drinks are still Pepsi Co.’s

stronghold, despite its product diversification, the company’s fruity drinks under

Tropicana made it to this top 10 list. Its orange juice (the most popular from this

line) pulls in a decent $4 billion each year.

It has maintained a loyal following inside and outside of the Pakistan.

Its reincarnations in other countries are very interesting and are very successful.

Some of those products are Tropicana smoothies and fruity sodas.

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5. Diet Pepsi

It can be surprising to find Diet Pepsi middling in this list

of most sold Pepsi Co. products. After all, it shares the company name—it should

have ranked higher in this list. In recent years, the Diet Pepsi brand has somehow

weakened, with rival Coca Cola coming out with comparable products like Coke

Zero that appealed to more people, relegating the Diet Pepsi into the third or fourth

option in its category.

That does not mean that Diet Pepsi is anywhere being phased out or papered. The

brand still sells at a brisk pace, and rakes in a healthy $5 billion every year.

4. Gatorade

The world’s leading sports and energy drink, Gatorade is a

staple in many basketball courtside areas, marathon routes, cyclists’ bikes, and

gym’s locker rooms. Advertised as a delicate blend of great taste and chemical mix

of ions, salts, and other vitamins and minerals that can power the active body.

Even with the likes of sports superstars Usain Bolt, Michael Jordan, and Serena

Williams, it is only the fourth most sold product of Pepsi Co. That’s still a good

place to be, though, because it is pulling about $7 million annually for the

company.

http://www.therichest.com/celebnetworth/athletes/richest-olympians-athletes/usain-bolt-net-worth/

http://www.therichest.com/celebnetworth/athletes/nba/michael-jordan-net-worth/

http://www.therichest.com/celebnetworth/athletes/tennis/serena-williams-net-worth/

http://www.therichest.com/celebnetworth/athletes/tennis/serena-williams-net-worth/

B.B.A-iv-Evening


3. Lay’s Potato Chips

It is one of the world’s, and certainly

America’s, most favorite comfort food, featured prominently in many shopping

carts for special occasions like the Fourth of July or at summer outings, or for

mundane activities like an at-home beer drinking session or a study session gone

too long into the night.

Generating about $7.5 billion a year for Pepsi Co., Lay’s is just edged out by the

next item on this list by a few millions.

2. Mountain Dew

Fresh, spritzy, totally hip, and magnetic to the

young soda-loving population, Mountain Dew is the penultimate item in our list.

You can say whatever you want about Mountain Dew, that its power to attract

customers in the market is because of its intrinsic taste or the power of great brand

positioning and marketing, but there’s no denying it’s pulling in the big bucks for

Pepsi Co. It earns about $8 billion every year for the company.

That amount, though, is nothing compared to the top one most sold product of

Pepsi Co.

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1. Pepsi Cola

Say Pepsi Co., and the first thing that pops into the mind of every man,

woman, and child in the civilized world is the iconic blue-and-red circle separated

by a white wave. The first, and probably the only, product from the company that

these people can name in the span of five seconds is Pepsi Cola.

The brand’s flagship and namesake product is still one of the world’s most

recognizable, most popular brands. It is well-loved, with people of various

generations from six continents guzzling down its carbonated, sugary goodness.

It accounts for about a fifth of the company’s total sales, generating an annual

income of almost $20 billion for Pepsi Co. That’s a lot of money for the company,

and is the reason why Pepsi Cola is the king of Pepsi Co.’s empire.

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Pepsico Environment in Pakistan

Demographic

Demographic is the study of human population in terms of size, density,

location, age gender, race, occupations and other statistics.

The Pepsi Pakistan Private Limited has also researched in the

demographics of Pakistan. The marketers at Pepsi keeps close track at

the demographic trends and development in Pakistan and after some

objective research they have come up with some facts regarding the

Pakistan demographic structure which have helped them a lot in

targeting the best segment and increasing their sales.

Young People

According to the Pepsi Pakistan research report the young people in

Pakistan lies between 50 to 60 % of the total population of, out of which

almost 45 % are 8 years older. So the Pepsi Pakistan target market is

almost 45% of the population which is a very huge amount of consumer

for a company to promote and sell their product. The Pepsi Pakistan

have targeted their market to youth mostly in universities and cafes but

their major success lies in the targeting of the family structure of

Pakistan.

Pepsico other Product like lays, etc. also inspire the young People.

B.B.A-iv-Evening


Families

Pepsi is not just a brand for young energetic youth but it is also a

family product there is hardly any party in Pakistan which does ends on

a cold drink which is a success of Pepsi demographic research. And

Lays also used in parties .

Investing in sports

Investing in sports specially in cricket have helped Pepsi in

winning the hearts of young blood which indeed is a very high consumer

of their product.

They have developed different flavors for different ages of

consumers— 7 Up is mostly used in hotels and is consume by old age

people to digest their food, The sugar free Pepsi is purchased by diabetic

patients (though it is still unhealthy for them but special product

specifically for diabetic patients eager patients to buy the product), Dew

and Sting are for younger age group who feels that they will get extra

energy after drinking and last but the not least Pepsi itself is a general

product which is not specific to a particular age group.

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External Environment

PEST Analysis

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Political Analysis for PepsiCo

In the FDA (united state food and drug) non alcoholic beverages fell in the food

group. In terms of regulation, the government shows responsibility in the process

of manufacturing all these products. For example, if they do meet a standard law,

there are possible fines lay down by government on companies.

The following are the factors that could make PepsiCo company`s actual result to

be changed from the expected result discussed in their original company`s forward

report.

Changes in regulations and laws: This comprise changes in accounting standards,

taxation requests which are (new tax laws, tax rate changes and revised tax law

interpretations) in addition to ecological laws in foreign and domestic jurisdictions.

This is going to affect our product selling price.

Political Conditions: This is mainly in our international markets, which include

civil unrest, change in government and restriction on the possession to transfer

capital across borders. For example the civil unrest in Gaza is going to affect our

market in the Middle East.

Ability to enter developing markets: This mainly depends on both political and

economic situation and how fine they are capable of forming strategic business

alliances and make essential infrastructure enhancements. This might be difficult in

some countries because of some strict laws set by their government e.g. existence

of monopolies, employing 95% of the citizen and so on. This is going is affect our

international market penetrating to developing countries.

Changes in the non-alcoholic industry environment: These consist of competitive

product, without limitation and pricing pressures and their capacity to achieve or

keep share of sales in the global market because of other competitors. The

government affect all these changes by setting rules like barriers to entry i.e.

making it difficult for new company to come up, price fixing, this is going to affect

our share value in the global market because our product are not sold at our

desirable price.

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Economic Analysis for PepsiCo

Global Recession: Few years ago, the united state economy was very good and

almost every part of it was rising and was going fine. Though, lot things have

change. Economists often describe recession as a negative GDP growth or two

consecutive quarters of contraction. Recently, the government officially confirmed

that united state has been experiencing recession for the past few months.

However, the forceful action by Federal Reserve and congress has helped the

economy in going back to sustained positive growth in the next few months. The

Federal Reserve is trying their best to help the economy recover.

Interest Rate: Interest rate has been cut down ten times recently. The rate has now

fall between 40 years low of 3%. Reducing the interest rates will definitely

stimulate customer demand in the economy. Companies will have the opportunity

to enlarge and increase by collecting loans as an outcome of low interest rates on

borrowings. PepsiCo can easily loan money to invest in new products because the

interest rates are now reduced. The loan collected can also be used on research of

new products. As researching for new product would cost less, PepsiCo will sell its

product at a cheaper price and people will spend because they will get Pepsi

product at a cheap rate.

Fear for inflation: The United States is on the course to achieve its economic levels

back. Recently, consumers are now continuing their normal way of life i.e. going

shopping, eating out at eatery and so on. Thou many are still careful with their

money because they still have the believed that lower inflation is still coming.

Consumer will recover their full confidence shortly and will have impact in our

sales figures.

According to the “Standard and Poor`s Industry surveys”, non-alcoholic beverage

industry has high sales in most countries outside the united state. For major soft

drink companies, there has really been improvement in the economic in major

international markets. Such as Brazil, Japan etc. These markets will keep on

playing a major role in the steady and success growth for most non-alcoholic

beverage industry.

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Social Analysis for PepsiCo

A lot of United States citizens are now practicing healthier way of life. The impact

of this on the non alcoholic beverage industry is that many people are now

changing to pure water and diet cola with zero sugar compare to coke, beer and

other alcoholic beverages. The necessity for pure water and products that are

healthier are now very important in the standard day to day life.

Most consumers between the ages of 40-55 are gradually more worried with

nourishment. As many are growing older, they are more worried in increasing their

prolonged existence. This will keep having impact on the non alcoholic beverage

industry by rise in demand for healthier beverages.

Technology Analysis for PepsiCo

The following are some of the factors that affect the company’s actual result to

differ from the result expected.

The usefulness of company marketing, advertising and promotional programs. The

recent development in technology of TV and internet e.g. the latest use of HD

graphics. They make product look more attractive especially if the HD is used on

the television. This help in convincing the customers and selling the products.

The introduction of vending machines, plastic bottles and cans have helped to

increase sales for PepsiCo. This is mainly because they can easily be carried and

disposed after use. The introduction of vending machine has also helped to

increase sales because it will save labour cost.

As technology is growing everyday and getting more advance, there has been

overture of new machineries which will enable PepsiCo product to increase

tremendously than it was years before.

PepsiCo has over 10 factories in the United States which use most state of the art

of drink technology to make sure top product quality and very fast delivery. The

biggest factory is in New York opened in 1990. This factory has a machine with

the latest technology which can manufacture cans of PepsiCo drinks faster than

bullets from a machine gun.

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SWOT Analysis

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B.B.A-iv-Evening


BCG MATRIX

Divisions of PepsiCo:

1. Frito-Lay North America (FLNA)

2. Foods North America (QFNA)

3. Latin American food and snack businesses (LAF)

4. PepsiCo Americas Beverages (PAB)

5. Middle East Asia and Africa (MEAA).

6. United Kingdom & Europe (UKEU)

B.B.A-iv-Evening


Calculations

Related Market Share

1. 12500/1800 = 0.6

2. 1905/2500 = 0.7

3. 5895/9985 = 0.4

4. 10937/15000 = 0.7

5. 6435/12000 = 0.5

6. 5600/9000 = 0.6

Industry Growth Rate 1. 12500 – 11586 *100 = 08

11586

2. 1905 – 1860 *100 = 03

1860

3. 5895 – 4872 * 100 = 21

4872

4. 10937 – 11090 *100 = -2

11090

5. 6435 – 5492 *100 = 17

5492

6. 5600 – 4575 *100 = 22

4575

B.B.A-iv-Evening


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Value Chain Analysis

VCA is a strategy tool used to analyze internal firm activities. Its goal is to

recognize, which activities are the most valuable (i.e. are the source of cost or

differentiation advantage) to the firm and which ones could be improved to

provide competitive advantage. In other words, by looking into internal activities,

the analysis reveals where a firm’s competitive advantages or disadvantages are.

The firm that competes through differentiation advantage will try to perform its

activities better than competitors would do. If it competes through cost advantage,

it will try to perform internal activities at lower costs than competitors would do.

When a company is capable of producing goods at lower costs than the market

price or to provide superior products, it earns profits.

M. Porter introduced the generic value chain model in 1985. Value chain

represents all the internal activities a firm engages in to produce goods and

services. VC is formed of primary activities that add value to the final product

directly and support activities that add value indirectly. Below you can see the

Porter’s VC model.

http://www.strategicmanagementinsight.com/topics/competitive-advantage.html

B.B.A-iv-Evening


Support Activities Although, primary activities add value directly to the production

process, they are not necessarily more important than support activities. Nowadays,

competitive advantage mainly derives from technological improvements or

innovations in business models or processes. Therefore, such support activities as

‘information systems’, ‘R&D’ or ‘general management’ are usually the most

important source of differentiation advantage. On the other hand, primary activities

are usually the source of cost advantage, where costs can be easily identified for

each activity and properly managed.

Firm’s VC is a part of a larger industry VC. The more activities a company

undertakes compared to industry VC, the more vertically integrated it is. Below

you can find an industry value chain and its relation to a firm level VC.

http://www.strategicmanagementinsight.com/topics/vertical-integration.html

B.B.A-iv-Evening


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Example This example is partially adopted from R. M. Grant’s book

‘Contemporary Strategy Analysis’ p.241. It illustrates the basic VCA for an

automobile manufacturing company that competes on cost advantage. This

analysis doesn’t include support activities that are essential to any firm’s value

chain, thus the analysis itself is not complete.

B.B.A-iv-Evening


FINANCIAL ANALYSIS

Of

2012-13

2011-12

B.B.A-iv-Evening


Balance Sheet of Pesico Inc.

Period Ending Dec 28, 2013 Dec 29, 2012 Dec 31, 2011

Assets

Current Assets

Cash And Cash Equivalents 9,375,000 6,297,000 4,067,000

Short Term Investments 303,000 322,000 358,000

Net Receivables 6,954,000 7,041,000 6,912,000

Inventory 3,409,000 3,581,000 3,827,000

Other Current Assets 2,162,000 1,479,000 2,277,000

Total Current Assets 22,203,000 18,720,000 17,441,000

Long Term Investments 1,841,000 1,633,000 1,477,000

Property Plant and Equipment 18,575,000 19,136,000 19,698,000

Goodwill 16,613,000 16,971,000 16,800,000

Intangible Assets 16,039,000 16,525,000 16,445,000

Accumulated Amortization - - -

Other Assets 2,207,000 1,653,000 1,021,000

Deferred Long Term Asset Charges - - -

Total Assets 77,478,000 74,638,000 72,882,000

Liabilities

Current Liabilities

Accounts Payable 12,533,000 12,274,000 11,949,000

Short/Current Long Term Debt 5,306,000 4,815,000 6,205,000

Other Current Liabilities - - -

Total Current Liabilities 17,839,000 17,089,000 18,154,000

Long Term Debt 24,333,000 23,544,000 20,568,000

Other Liabilities 4,931,000 6,543,000 8,266,000

Deferred Long Term Liability Charges 5,986,000 5,063,000 4,995,000

Minority Interest 110,000 105,000 311,000

Negative Goodwill - - -

Total Liabilities 53,199,000 52,344,000 52,294,000

B.B.A-iv-Evening


Stockholders' Equity

Misc Stocks Options Warrants (130,000) (123,000) (116,000)

Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 25,000 26,000 26,000

Retained Earnings 46,420,000 43,158,000 40,316,000

Treasury Stock (21,004,000) (19,458,000) -

Capital Surplus 4,095,000 4,178,000 4,461,000

Other Stockholder Equity (5,127,000) (5,487,000) (24,099,000)

Total Stockholder Equity 24,409,000 22,417,000 20,704,000

Net Tangible Assets (8,243,000) (11,079,000) (12,541,000)

B.B.A-iv-Evening


Income Statement of Pesico Inc.

Period Ending Dec 28, 2013 Dec 29, 2012 Dec 31, 2011

Total Revenue 66,415,000 65,492,000 66,504,000

Cost of Revenue 31,243,000 31,291,000 31,593,000

Gross Profit 35,172,000 34,201,000 34,911,000

Operating Expenses

Research Development - - -

Selling General and Administrative 25,357,000 24,970,000 25,145,000

Non Recurring - - -

Others 110,000 119,000 133,000

Total Operating Expenses - - -

Operating Income or Loss 9,705,000 9,112,000 9,633,000

Income from Continuing Operations

Total Other Income/Expenses Net 97,000 91,000 57,000

Earnings Before Interest And Taxes 9,802,000 9,203,000 9,690,000

Interest Expense 911,000 899,000 856,000

Income Before Tax 8,891,000 8,304,000 8,834,000

Income Tax Expense 2,104,000 2,090,000 2,372,000

Minority Interest (47,000) (36,000) (19,000)

Net Income From Continuing Ops 6,740,000 6,178,000 6,443,000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 6,740,000 6,178,000 6,443,000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares 6,740,000 6,178,000 6,443,000

B.B.A-iv-Evening


INTERNAL ANALYSIS

Liquidity Ratios

Liquidity ratios are concerned with the ability of the

business to meet its short- term financial obligation. It is generally seen that the higher the value

of the ratio is then the larger its margin of safety is for covering short-term debts. The liquidity

ratio as twelve months with liabilities which will become due for payment within the same time a

way of analyzing credit risk when supplying goods on credit.

Interpretation:

Analyzing the current ratio of Pepsico Inc., the company in a good position to pay back

its short term liabilities with its short tern assets such as stock/ inventories, cash surpluses

and receivables because the difference between 2012 and 2013 are increase by 0.14. And

this is good for company.

The variation seen the year 2012 and 2013 shows that the company is performing well

and pay its.

Analyzing the quick ratio of Pesico Inc. the company shows a increase in its ability to

pay back its debts without relying on the inventory from past years to 2012. A ratio in

2012 less than one is often a cause for concern, particularly if it persists for any length of

time. But in 2013 it is greater then one.

Which may be due to all the reasons discussed before. Even though we can analyze that

the company can pay the debts they need to plan properly and allocate cash in

appropriate proportion.

Liquidity Ratios 2013 2012

Current Ratio 1.24 1.10

Quick Ratio 1.05 0.89

B.B.A-iv-Evening


Leverage Ratios Leverage is a general term for any technique to multiply gains and losses.

2013 2012

Debt To Equity 0.57 0.54

Debt To Asset 0.54 0.54

Long term capitalization o.36 0.36

Interpretation:

Debt to Equity ratio is increase in 2013 by 0.03 .If the ratio is increasing, the company is

being financed by creditors rather than from its own financial sources which may be a

dangerous trend. Lenders and investors usually prefer low debt-to-equity ratios because

their interests are better protected in the event of a business decline. Thus, companies

with high debt-to-equity ratios may not be able to attract additional lending capital.

Debt to Asset ratio is equal 2012 and 2013 and its ratios 0.54 less then one it is good for

company.

Long term capitalization also equal and is ratios also good for company.

Coverage Ratios

2013 2012

Interest Coverage 10.7 10.2

Interpretation:

The ratio is increased from previous year that is favorable for the company. Pepsico

Inc. in a good position because its ratio is high and it shows that it can meet its

debts.

B.B.A-iv-Evening


Efficiency Ratios

2013 2012

Receivable Turnover 9.55 9.30

Receivable Turnover in

Days

38

39

Inventory Turnover 9.16 8.73

Inventory Turnover in

Days

39 42

Total Asset Turnover 0.85 0.87

Interpretation:

Receivable Turnover increase by 0.25 its good for company because company received

their debt and increase their profit and income.

Inventory turnover is also good for company because company increase their inventory

turnover by 0.43.

Total Asset Turnover decrease its not good for company.

\

Profitability Ratio

2013 2012

Gross Profit Margin 52 % 52 %

Net Profit Margin 10 % 9 %

Return on Equity 27.78 % 27.12 %

Return on Assets 8.70 % 8.28 %

Interpretation:

• Gross profit margin equal from the last year that good for company.

• Net profit increases this is also good for pepsico Inc.

• ROI increases that means returns of the company increase which is good.

• ROE Increases from last year that also good for the Pepsico Inc.

ROA also Increases from last year that are also good for Pepsico Inc

B.B.A-iv-Evening


FINANCIAL ANALYSIS

Of

Pepsico Vs CocaCola

2012-13

B.B.A-iv-Evening


Balance Sheet of Coca Cola inc.

Assets

Current Assets

Cash And Cash Equivalents 10,414,000 8,442,000 12,803,000

Short Term Investments 9,854,000 8,109,000 1,232,000

Net Receivables 4,873,000 4,759,000 4,920,000

Inventory 3,277,000 3,264,000 3,092,000

Other Current Assets 2,886,000 5,754,000 3,450,000

Total Current Assets 31,304,000 30,328,000 25,497,000

Long Term Investments 11,512,000 10,448,000 8,374,000

Property Plant and Equipment 14,967,000 14,476,000 14,939,000

Goodwill 12,312,000 12,255,000 12,219,000

Intangible Assets 15,299,000 15,082,000 15,450,000

Accumulated Amortization - - -

Other Assets 4,661,000 3,585,000 3,495,000

Deferred Long Term Asset Charges - - -

Total Assets 90,055,000 86,174,000 79,974,000

Liabilities

Current Liabilities

Accounts Payable 9,886,000 9,151,000 9,371,000

Short/Current Long Term Debt 17,925,000 17,874,000 14,912,000

Other Current Liabilities - 796,000 -

Total Current Liabilities 27,811,000 27,821,000 24,283,000

Long Term Debt 19,154,000 14,736,000 13,656,000

Other Liabilities 3,498,000 5,468,000 5,420,000

Deferred Long Term Liability Charges 6,152,000 4,981,000 4,694,000

Minority Interest 267,000 378,000 286,000

Negative Goodwill - - -

Total Liabilities 56,882,000 53,384,000 48,339,000

Stockholders' Equity

Misc Stocks Options Warrants - - -

B.B.A-iv-Evening


Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 1,760,000 1,760,000 1,760,000

Retained Earnings 61,660,000 58,045,000 53,621,000

Treasury Stock (39,091,000) (35,009,000) (31,304,000)

Capital Surplus 12,276,000 11,379,000 10,332,000

Other Stockholder Equity (3,432,000) (3,385,000) (2,774,000)

Total Stockholder Equity 33,173,000 32,790,000 31,635,000

Net Tangible Assets 5,562,000 5,453,000 3,966,000

B.B.A-iv-Evening


nrui P BeneP re it uiun uijn

Total Revenue 46,854,000 48,017,000 46,542,000

Cost of Revenue 18,421,000 19,053,000 18,215,000

Gross Profit 28,433,000 28,964,000 28,327,000

Operating Expenses

Research Development - - -

Selling General and Administrative 18,205,000 18,185,000 18,154,000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 10,228,000 10,779,000 10,173,000

Income from Continuing Operations

Total Other Income/Expenses Net 1,110,000 608,000 1,012,000

Earnings Before Interest And Taxes 11,940,000 12,206,000 11,875,000

Interest Expense 463,000 397,000 417,000

Income Before Tax 11,477,000 11,809,000 11,458,000

Income Tax Expense 2,851,000 2,723,000 2,812,000

Minority Interest (42,000) (67,000) (62,000)

Net Income From Continuing Ops 9,186,000 9,838,000 9,274,000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 8,584,000 9,019,000 8,584,000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares 8,584,000 9,019,000 8,584,000

B.B.A-iv-Evening


EXTERNAL ANALYSIS (Only for Current Year)

Liquidity Ratios

Pepsico Inc. CocaCola Inc.

Current Ratio 1.24 1.17

Quick Ratio 1.05 0.90

Interpretation:

Pepsico Inc. in a good position in liquidity ratio because its ratio is high and it can good

in paying its bills, ratio of Cocacola Inc. is also good but it is below to Pepsico Inc..

Pepsico Inc. Is also good in Quick Ratio it Ratio Increase with 0.15 with CocaCola Inc.

Leverage Ratios


Debt To Equity 0.57 1.11

Debt To Asset 0.54 0.52

Long term capitalization 0.36 0.31

Interpretation:

Debt to Equity ratio of Pepsico Inc. is low that means it is less depended and good

position. But CocaCola Inc. ratio increase from pepsico Inc. 0.54.

Debt to Asset ratio of Pesico Inc. is high from Cocacola Inc. by 0.02. But It is less then

one pepsico Inc. and cocacola Inc. in a good position.

B.B.A-iv-Evening


Coverage Ratios


Interest Coverage 10.7 4.02

Interpretation:

Pepsico Inc. ratio is high which is good means it is in good position and can cover

interests and the ratio of CocaCola is low which is not good.

Efficiency Ratios

Pesico Inc. CocaCola Inc.

Receivable Turnover 9.55 9.73

Receivable Turnover in

Days

38 37

Inventory Turnover 9.16 5.63

Inventory Turnover in

Days

39 64

Total Asset Turnover 0.85 3.18

Interpretation:

Turnover ratio of Pepsico Inc. and CocaCola Inc. approximately same and its receivable

turnover is good.

Pepsico Inc. Inventory turnover is which is good and CocaCola Inc. turnover has low

ratio.

Pepsico Inc. Asset Turnover is low its not good for company.

B.B.A-iv-Evening


Profitability Ratio


Gross Profit Margin 52% 61.38%

Net Profit Margin 10% 18.32%

Return on Equity 27.78 26.03%

Return on Asset 8.70% 9.74%

Interpretation:

Net profit ratio of Pepsico Inc. is 10% and it is less than CocaCola Inc. so CocaCola is in

good position and it is favorable for them,

In ROI CocaCola is behind Pepsico Inc. that means CocaCola is in not good position

compare to Pepsico.

B.B.A-iv-Evening


Conclusion

It can be seen then that differences do exist between Coca-

Cola and Pepsi Cola.

This can be seen in the marketing variables which are the

basis for segmentation such as age and geographic

variables.

In a competitive market, both companies must identify and

target different market segments in order to remain at the

cutting edge.

Differences between the companies are evident with

respect to product, pricing, place and promotion.

Coca-cola relies heavily on value: quality is more than

something we see or taste. (http://www.coca-cola.com).

Pepsi, on the other hand, relies on its success resulting from

superior products and high standards of performance

(http://www.pepsico.com)

B.B.A-iv-Evening


Recommendations

Cost-Leadership Strategy

Advertising and innovative promotion.

Optimal outsourcing for production and vertical

integration.

Improving production efficiencies through Kaizen.

New Product Development

Produce a range of ‘healthy’ alternatives under the brand

name ‘Pepsi Fresh’.

Our suggestion would be a range of Vitamin enriched

waters under the name ‘Pepsi Fresh’

Produce Healthy & Fresh Juices

Documents

Pepsico