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Comparative study of PepsiCo and Coca Cola strategies.
Transcript of Comparative study of PepsiCo and Coca Cola strategies.
Conclusion and Recommendations
1.Strategy's play an integral part in the growth and survival of the firm.
2.Both the firms have been continuously changing and developing their new strategy's.
3.Pepsi in the recent years with its diversification strategy has been wining the battle.
4.Coca Cola still has a very big share in the carbonated drink segment.
Comparative study of Business and Corporate level strategies of Coca Cola and PepsiCo
Business level Strategies of PespiCo
Strategies of Coca Cola and PepsiCo
Business level Strategy of Coca Cola
Corporate level Strategy's of Coca Cola
Financial's of PepsiCo
Financial's of Coca Cola
Effectiveness of the Strategies
Net revenue grew by 9.85%.
Operating profits grew by 20.1%.
Dividend increased by 10.05%.
Effectiveness of strategies of Coca Cola
1. Net revenue grew by 13%
2. operating profits grew by 23%
3. Dividend increased by 9.55%
Two of the most valuable companies in the world.
Discuss the different business and corporate level strategies
Discuss and evaluate the business and corporate level strategies by PepsiCo and Coca-cola corporation
Study the effectiveness on the financial performance and the growth of the companies
Propose improved strategies for both the companies
1. Net revenue grew by 5.95%
2. operating profits grew by 5.95%.
3.Dividend increased by 9.03%.
History of PepsiCo Corporation
Made in 1893 by Caleb Bradham and named it pepsi cola
Changes in Management in 1931.
Frito-lay merger in 1965
Market capitalization of 131.49 billion dollars.
Second largest in market capitalization and first in revenues which were $65.5 billion dollars.
Indra Nooyi assumed the position as CEO in 2006
1. Net revenue grew by 33%.
2. Operating grew by 23%.
3. 8 billion returned to shareholder through stock repurchase and divided payouts.
Effectiveness of Strategies of Pepsi
History of Coca-cola Corporation
Made by John Pemberton in 1886 and sold to Asa Griggs
Sold to Ernest Woodruff in 1919.
Globally recognized brand in over 200 countries.
Market capitalization of 178.54 billion dollars.
700,000 employees and 48 billion dollars in revenues.
Current CEO Mukhtar Kent
1.Net revenues decreased by 15%.
2. Operating fell down by 7%.
3. 6.5 billion paid back to shareholders.
1.Continue with their diversification strategy.
2.Reduce system wide costs with better integration.
3.Expand into new markets.
4.Concentrate into high growth areas like nutrition supplants and healthy foods.
1.Continue to capitalize on their brand image by following the differentiation strategy.
2.Bring costs down by integration both vertical and horizontal.
3.Keep hold of their first mover advantage.
Cost leadership Strategy
Appeared 12 years after the brand Coca Cola
Locating its factories in developing countries
Redesigned its packaging and commercials
promotions through celebrities.
Focused cost leadership
Pepsi targeting its markets in China
China has large and cheap labour forces.
Using its reputation as one of the highest rated companies in terms of work satisfaction among employees
Cost leadership Strategy
Fairly new for Coca Cola
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Corporate level strategies of pepsi
Related Constrained Diversification Strategy
Operational and Corporate Relatedness
Processing, Marketing, Research and Development, Distribution.
Focuses heavily on Mergers and Acquisitiveness of other food companies.
Global level strategies to market and distribute healthy food market.
Vertical and Horizontal integration
Acquiring new brands.
Acquiring third party bottlers and distributers.
Operational relatedness:-Sharing of manufacturing facilities.
Corporate relatedness:- Sharing of knowledge and market expertise.
Expertise through their different regional branches.
Vertical integration:- buying of bottlers and distributors.
Horizontal Integration:- buying Vitamin water, contracts with Monster energy drink.
Minli Zhu - T00025303, Mohit Bhatia - 9581414, Japinder Bikram Bajwa - 9582720
1. Net revenue grew by 14%.
2. Operating profits grew by 7%.
3. 6 billion paid back to share holders
Extensive Distribution Network
Corporate Social Responsibility
Competent in mergers and acquisitions
22 brands earning more than 1 billion dollars a year
Successful marketing and advertising
Complementary product sales
Proactive and progressive
Highly dependent on wal-mart
Weak brand awareness
Low profit margins
Increasing demand for healthy food and beverages
Further expansion through acquisitions
Growing beverage and snack consumption around the world.
Decreasing gross profit margins
Changes in legal requirements
A change in consumer tastes
World’s largest market share in beverages
The best global brand in the world
Strong marketing and advertising
Very extensive distribution channel
High customer loyalty
Bargaining power over suppliers
Corporate social responsibility
High focus on beverage drinks
Undiversified product portfolio
High Debt due to acquisitions
Consumption of bottled water is growing
Increased demand for healthy food and beverages
Growing emerging markets
Growth through acquisitions
Changes in consumer tastes
Competition from pepsico
Saturating carbonated drinks market