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Transcript of PEPSICO ANALYSIS
PEPSICO is currently traded on the New York Stock Exchange (NYSE: PEP)
PEPSICO IPO was on January 6, 1978. On the IPO day, PEP’s volatility was between $1.47 and $1.48. Closing price was at $1.469/ share
IPO trading volume was 2.82 million shares PEPSICO IPO Mutual Funds Holdings Institutions Holdings Profitability The real cost of debt as of December 31, 2011 was 4.38%. I project the cost of debt will increase by 1.5% in 2 years. In 2007, PEPSI annouced a new organizational structure. Because the company accumulated a significant amount of retained earnings, the BOD decided to use higher percentage of cash payment for its inventory purchases instead of utilizing leveraged finance. INTRINSIC VALUE PEP is currently traded at its intrinsic value (after discounting the projected FCF), we believe it is not a stock for speculative investors
PEP is maybe more suitable for investors who are looking for dividends income Conclusion Mutual funds holdings Vision:
At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.
“Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.”
Performance with Purpose:
“At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society - delivering what we call Performance with Purpose.”
“Our approach to superior financial performance is straightforward - drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.” Vision, Mission, Objectives FINANCIAL ANALYSIS Pepsi offers different “universities” globally to train, depending on your position.
PepsiCo University (PEP U): to develop a global mindset, build strategic thinking, develop talent and create a collaborative and innovative culture.
Finance University: A multi-hour web-based course organized under a number of colleges: Investor Relations/External Reporting, Audit/Risk Management, Control, Tax, Treasury, Operations and Supply Chain Finance, Sales Finance, Strategy/M&A, Business Planning, Systems and IT (under development).
Customer Management University: supporting our commercialization competencies, a robust and continuously updated sales and customer management curriculum is available for all U.S. sales professionals.
Global R&D University: The eight colleges are: Packaging, Nutrition, Food Safety and Regulatory, Ingredient Application Science, Human Research and Science, Experience Design, Product Development and Process Engineering. HR University is being launched in 2011. Training PepsiCo Foundation: Established in 1962
Goal: Seeks to foster healthy, vibrant and self-sufficient communities worldwide through global partnerships that improve the quality of life across communities in areas of great need.
Strategy: Advance programs that help people locally, complementing sustainability platforms of Performance with Purpose.
(In 1998, PepsiCo became the first corporation to become a mission sponsor of the YMCA of the USA.)
Associate Programs: matching gift, United Way, Secondary Education Assistance. Socioculture Environmental Sustainability:
Water-Respect the human right to water through world-class efficiency in our operations, preserving water resources and enabling access to safe water.
Land and Packaging-Rethink the way we grow, source, create, package and deliver our products to minimize our impact on land.
Climate Change- Reduce the carbon footprint of our operations.
Community- Respect and responsibly use natural resources in our businesses and in the local communities we serve.
Products- Provide more food and beverage choices made with wholesome ingredients that contribute to healthier eating and drinking.
Marketplace- Encourage people to make informed choices and live healthier.
Community- Actively work with global and local partners to help address global nutrition challenges. Socioculture Continued: “Eighty percent of our executive team was promoted from within.”
As of December 31, 2011:
approximately 297,000 people worldwide
approximately 107,000 people in the United States.
A portion of the workforce belongs to unions.
pension plans cover certain full-time employees in the U.S. and certain international employees. Benefits are determined based on either years of service or a combination of years of service and earnings. Current Hiring Trend Diversity Data 5 Strategies to Drive Our Growth into the Future:
1. Is to build and extend our macrosnacks portfolio globally.
2. Is to sustainably and profitably grow our beverage business worldwide.
3. Is to build and expand our nutrition business.
4. Is to increase and capitalize on the already high coincidence of snack and beverage consumption.
5. Is to ensure prudent and responsible financial management. Pepsi’s Growth Potential All information was taken from Pepsico website and their 10K
http://www.pepsico.com/ Works cited HUMAN RESOURCES COMPETITION Strengths: Branding, Diversification, Distribution
Weaknesses: Wal-Mart, US Markets, Low Productivity, Image Damage
Opportunities: Broadening of Product Base, International Expansion, Growing Markets
Threats: Decline in Carbonated Drink Sales, Government Regulations, Intense Competition, Potential Disruption SWOT Political: Various federal laws, land acquisition, stricter norms, raw material prices
Economical: New opportunities, fuel price, availability of labor, global economic perspective
Social: Replenishing water, partnering with farmers, solid waste management program
Technological: operation in almost all countries, cans/plastic bottles, newer/attractive designs, state-of-the-art-plants
Environmental: clean with air, packaging sources
Legal: FDA, GMO’s, ingredients PESTEL Pepsi:
Marketing = $3.5 billion in 2011
Sales = $66.5 billion in 2011
Marketing = $3.3 billion in 2011
Sales= $46.5 billion in 2011 Sales/Marketing Numbers Plans to increase advertising and marketing support behind its global brands by $500-$600 million in 2012, with particular focus on North America; going forward, it expects to maintain or increase that rate of support as a percentage of revenues
In 2010, announced strict science-based criteria that ensure only our most nutritious products meet the standard for advertising to children under the age of 12. Marketing Model Strategy Primary Competitor: Coca-Cola
Other competition includes: Nestle, Kraft, Dr. Pepper Snapple Group Inc.
Strengths = promotion strategy, widely accepted, contracts with big restaurants i.e. McDonald’s
Weaknesses = Target group is mainly younger people; not a healthy beverage
Opportunities = Can try and create healthier drinks, since people are being conscious of their health
Threats = Competitors, i.e. Pepsi Factual Data of Direct Competitors Products sold all over the world, including Europe, Asia, South America, and Australia. They have a major international presence and even sell products specifically for certain countries. For example, in India, Aliva is a popular brand of baked snacks. Aliva was developed in India specifically for the Indian customer. Global Presence Opened a new lab in the US as part of a shift to improve the nutritional profile of its vast portfolio of foods and beverages. Within the past two years, has added world-renowned clinical scientists and experts in nutrition, food safety, epidemiology, and health policy to its staff. This group will focus on long term research aimed at developing healthier foods and beverages that can improve people’s overall diets.
Research and Development of Upcoming Products HISTORY