Xacc280 Week 9 Financial Analysis

The war between the two largest soft drink manufacturers has been legendary. This folklore began in 1938 and over a hundred years of war between Coke and Pepsi, has not only

For more than a century, Coca Cola and PepsiCo have been the major competitors within the soft drink market. By employing various advertising tactics, strategies such as blind taste tests, and reward initiatives for the consumer, they have grown to become oligopolistic rivals. In the soft-drink business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market shares in virtually every region of the world. They have brands that the consumers want, whether it be soft-drink brands or in PepsioCo’s case, snacks. With only one soft-drink market, the two competitors have no choice but to increase sales by stealing the other competitor’s clients. This led to the term, the “cola wars” which was first used

The 2 companies already strong brand equity, increasing marketing budget for their flagship brands and constant innovation (e.g. freestyle soda machine) should retain customers’ loyalty. By diversifying their product portfolio through new acquisitions and introduction of a variety of new CSDs such as diet products that already proved their profitability and non CSDs, the two companies should be able to respond and adapt to the customers changing demand and preferences such as increasing health concerns, rising interest in sports and nutritional drinks. The international market remains a key opportunity for Coca cola and Pepsi to sustain and increase their profitability. Even though Coca Cola is already a leader on the international level with 80% of sales in contrast with roughly 50% of sales for Pepsi, many foreign untapped markets are still far from being saturated and constitute a good profitable business, especially within the rising economies in Asia, Africa and the Middle East as growth means higher purchasing power. Finally, the two companies’ consolidation of their bottling system again in 2009 should cut down operating costs and increase

The Coca Cola Company (TCCC) was founded since 1886 and it has been 129 years today. TCCC is the worldwide carbonated soft drinks industry from United States of America. There are four top five soft drinks brands of Coca Cola, Diet, Coke, Fanta and Sprite. The other products are: Juice & juice drinks, waters, energy drinks, sports drinks, cordials and iced tea. It has licenses and markets more than 500 beverage brands. The company has relationship with over 250 bottling partners worldwide. TCCC is manufacturing by nearly 900 plants to worldwide markets. In strengthening operations through an integrated supply chain, the company make alliances with the Walt Disney and the McDonalds. In 2012, the key performance are highlighted by increasing

The Coca-Cola Company is one of the largest beverage companies around the world with 128 years history and more than 500 brands including Coca-Cola, Diet Coke, Fanta, Sprite and so on. Among these brands, the product “Coca-Cola” recognizes the Company better known around the world. Now Coca Cola are sold in more than 200 countries. The main headquarter of Coca-Cola locate in Atlanta, Georgia, United States. The current CEO of Coca-Cola is Muhtar Kent. According to the 2014 annual financial report, the Coca-Cola Company got $45.998 billion revenue and its decrease 1.83% than last year. The Coca-Cola Company got $7.098 billion profit by the 2014 annual report and it is also 17.31% decrease than last year’s profit.

C. Coke managed their assets better in 1996 as evidenced by their inventory turnover of 7.1 compared to 2010 of 4.5. Therefore in 1996 they sold 7.1 times their current inventory while in 2010 only 4.5 times.

Coca Cola is a large company that has been around since 1886. They are primarily marketing and selling one product; beverages. They have a 63.9% gross profit margin for 2009 and show reasonably good ratios indicating stability. For the 46th consecutive year dividend shave risen. About 74% of their net operating revenue comes from operations outside of the U.S .PepsiCo, Inc. is also a large company that has been around since 1898. They are also a leader in the beverage market but have diversified into another area; snacks. Well known snack such as Lay’s, Doritos, Frito-Lay, Rold Gold, Cracker Jack, Quaker Oatmeal, Aunt Jemima, and Rice-A-Roni just to mention a few leading brand names. The

Coca-Cola shows impressive performance in profitable growth. Coca-Cola’s current gross profit margin is very high, which is good because this indicates that the company has done an exceptional job in cutting costs. Coca-Cola is making considerable effort in making use of costs of goods sold. The management team at Coca-Cola is effectively using raw materials, labor, and manufacturing supplies. According to Muhtar Kent, it

As mention before, Coca-cola has 47.3 percent market share in the country’s cola market versus Pepsi which hold 44.5 percent. Coca-cola is also the brand known around the worlds, which are the largest producer and distributor of ark colas in the world. Even in the current monetary crisis, the company continues to expand and the financial position shows that Coca-cola has a strong cash position in compare to PepsiCo which the long term debt of PepsiCo is so high.

6. In the past ten years Pepsis net revenue compounded annually growth rate was 9%. (Annual Report, p. 4)

As of December, 31, 2013, $ 14,967 amount is recorded in the balance sheet as property, plant, and equipment net for Coca-Cola, and 83 percent of total assets does each company invest in property, plant, and equipment. On the other hand, $ 18,575 amount is recorded in the balance sheet for PepsiCo, and 76 percent of total assets invest in property, plant, and equipment, which is lower than Coca-Cola.

Coca-Cola and PepsiCo are the two biggest beverage companies in the world. Both companies dominate the beverage industry and are globally recognized by a large and diverse array of consumers. Both are massive industry leaders, each with a market cap of over $150 billion dollars. The Coca-Cola Company is roughly 130 years old and is based in the United States. Coca-Cola products are sold in over 200 countries across the world and every single day billions of coke beverages are consumed. PepsiCo was also established about 125 years ago and is based in the United States. PepsiCo, since its early beginnings, has always rivaled Coca-Cola Company as the most prominent beverage company in the world. Although each of these companies have

“Coca-Cola brands are available to consumers throughout the world. Today they account for 1.7 billion servings of all beverages consumed worldwide daily. Coca-Cola has the edge in the market and because they are first to capitalize on new consumer trends. They continue to focus on continuous operating improvements, and they are ever changing to meet market demands. Pepsi Co satisfies the needs of its customers with the wide variety of products offered. They also have the different type of beverage or snack and its brands can substitute for each other. Coco-Cola and Pepsi Co is known as the top 100 most valuable brands in the world.

The Coca-Cola Company’s annual advertising spend was $3.98 billion in 2015, $3.51 billion in 2014 and $3.27 billion in 2013. Advertising expenses accounted for 6.9% of total revenues each year. In 2015, The Coca-Cola Company was the largest beverage industry advertiser in the world.

Marketing and Advertising campaigns have had an enormous positive impact on the sales of Coca-Cola’s brand power over the years. As of 2013, the spent an estimated $3.37 billion, or 7.0% of its 2013 income, on advertising which includes in-store activations, loyalty points programs, and point-of-sale marketing.