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Financials on Coke Vs Pepsi

Essay by   •  February 4, 2011  •  Essay  •  1,455 Words (6 Pages)  •  2,330 Views

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In 1886, the Coca Cola Company was developed but it wasn't until 1898 that the fierce competitor Pepsi-Cola entered into the market. These 2 companies are the two major players that dominate the consumer beverage (soft-drink) industry. Coke and Pepsi have since been competing to rein the global market in consumer beverages. The market of drinks in the United States alone is valued at more than thirty million dollars annually. With the growth of these two companies, PepsiCo has developed and acquired additional products outside the scope of just the consumer beverage industry, these products have helped the company to increase their exposure and position in the global market. This has not been the case for the Coca Cola Company; they have tried and have failed numerous times at expanding their product and marketing capabilities. Below is a list of key products offered by both Coca Cola and PepsiCo:

PepsiCo Coca Cola

Frito-Lay Brands Gatorade Brands Coca-Cola Brands

Lay's potato chips Gatorade Thirst Quencher A&W

Ruffles potato chips Gatorade Frost Thirst Quencher Coca Cola

Doritos tortilla chips Propel Fitness Water Canada Dry

Tostitos tortilla chips Tropicana Brands Dasani

Fritos corn chips Tropicana Pure Premium juices Diet (varieties)

Cheetos cheese flavored snacks Tropicana Pure Tropics juices Evian

Rold Gold pretzels & snack mix Dole juices (License) Fresca

Cracker Jack candy coated popcorn Quaker Brands Hi-C

Pepsi-Cola Brands Quaker Oatmeal Minute Maid

Pepsi-Cola Cap'n Crunch cereal Nestea

Diet Pepsi Life cereal Schweppes

Mountain Dew Aunt Jemima mixes & syrups Sprite

Sierra Mist (Regular & Diet) Quaker rice cakes

Slice Quaker Chewy granola bars

Lipton Brisk (Partnership) Quaker Dipps granola bars

Lipton Iced Tea(Partnership) Rice-A-Roni side dishes

Dole juices and juice drinks Pasta Roni side dishes

Aquafina purified drinking water Near East side dishes

SoBe juice drinks, dairy, and teas Quaker Fruit & Oatmeal bars

It is clearly evident upon reviewing these two company's brand lists, that PepsiCo is much more diverse in their products and has presence in markets other than that of just the consumer beverage market. Although Coke Cola has a well known and successful brand in its beverage products, PepsiCo has a better chance of maintaining its positions in the global market due to its diversity among its various brands.

PepsiCo and Coca Cola are among the leading companies in many areas within the industry. Below are the major positions that each company holds in size and market share:

PepsiCo is the 3rd largest manufacturer of food and beverage products with a total just shy of 30 billion dollars in sales, while Coca Cola is the 5th largest manufacturer of food and beverage products with a total of 21.5 billion in sales. The products that both PepsiCo and Coke Cola concentrate their manufacturing efforts on are products that are easily consumed and/or prepared. Therefore, PepsiCo leads the sales in convenient food and beverage category, sustaining 22% of sales. Coca Cola also has a large percent of total sales in this category coming in under PepsiCo with 12%. One important thing to remember when evaluating PepsiCo and Coca Cola is that although PepsiCo may outperform Coca Cola in a number of key statistics, this is not the case when narrowing it down to the market which Coca Cola maintains its products, the consumer beverage (carbonated) products. In this category, Coca Cola outsells Pepsi Cola by a significant amount. Among U.S supermarkets, Coca Cola has retail sales of about 1700 (millions) and Pepsi Cola with only about 1400 (millions). When including the other brands from Frito Lay, Gatorade, and Tropicana, PepsiCo then has seven brands that rank within the top thirteen products sold at U.S. supermarkets. It begins to paint a different picture when evaluating the performance of PepsiCo and Coca Cola Company, then when evaluating the performance of the Pepsi Cola products with that of the Coca Cola products.

Stock price comparison between Coca Cola and PepsiCo:

In evaluating each company's financial statements, both have a number of strategic changes that they have undergone to become more competitive. PepsiCo has seen a dramatic increase in its financing activities from the proceeds from issuance of long-term debt. It has increased from 52 million to 504 million and is mostly a result of the repurchasing of common and preferred stock. The Board of Directors have made a strategic plan to spend 70 million dollars in the next year in repurchasing the companies stock, and in return will increase in the dividend payout. There is also a crucial market within PepsiCo International that aids in the increase net revenue. PepsiCo International has a positive impact on the overall profitable PepsiCo, and an important member of this market is the Asia Pacific area. Asia Pacific has seen the largest growth among the international market for PepsiCo, including 14% growth in snack volume, and 15% in beverage volume. "Net revenue grew 14% driven

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