Financial Management: Coke vs. Pepsi BUS 508 – Business Enterprise June 11‚ 2011 Financial Management: Coke vs. Pepsi The purpose of this paper is to analysis companies Coke and Pepsi and determinate (a) which company is better able to pay current liabilities (debt)‚ (b) explain what profitability ratios can tell about a company’s performance and how that information would influence investing decisions‚ (c) discuss which financial ratios to utilized while examining the company’s most
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COLA WARS : COKE AND PEPSI IN THE 21ST CENTURY” INTRODUCTION "Cola Wars Continue: Coke and Pepsi in the 21st Century” explains the economics of the soft drink industry and its relation with profits‚ taking into account all stages of the value chain of the soft drink industry. By focusing on the war between Coca-Cola and PepsiCo as market leaders in this industry – with a 90% market share in carbonated beverages – the study analyses the different stages of the value chain (concentrate producers
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Cola Wars Continue: Coke and Pepsi in 2010 1. Why‚ historically‚ has the soft drink industry been so profitable? Soft drink industry is profitable because the industry has concentrated revenues between 2 major players and it is virtually impossible for a new player to compete with the key players. The industry giant’s wield power over the retail outlets. Convenience stores‚ vending machines‚ fountains are widely distributed and hence they don’t have the power to bargain over pricing issues and
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#1 – Cola Wars Continue: Coke vs. Pepsi in the 1990s Cameron V. Collins MGT – 490 June 10th‚ 2011 Case Study #1 – Cola Wars Continue: Coke vs. Pepsi in the 1990s Introduction When it comes to soft drinks there are two top soft drink brands that come to mind‚ Coke and Pepsi. These two brands were invented in the 1800s and produced tasteful drinks that could be acquired at the nearest drinking fountain. The first drink produced by both companies‚ Coca-Cola by Coke and Pepsi-Cola
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Coke has been leading the competition from 1998-2002 in terms of higher market capitalization‚ gross margin and net income. However‚ Pepsi was leading the fight in terms of growth in revenue and net income. However‚ Pepsi’s stock performed 45% better than Coke’s stock. Overall‚ Pepsi was a smaller company but it was growing faster than Coke. Coke had a strong foundation‚ however‚ their revenue during this period increased due to summer months artificially increasing the demand. Pepsi‚ on the other
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II PepsiCo Vs Coca Cola India’s Perspective Prepared By: Ajay Shivpuje (20) Control of market share and dominating volumes are key issue of this article. Just how is this done in such a competitive market is the underlying issue. Which are the strategies those helped these major players to become successful in India. Both these major giants entered India around 1992.Both giants entered with new entity name as Hindustan Coca Cola and PepsiCo as
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generates positive economic profits. The other reason why the soft drink industry is profitable is: * Bottling Network: Coke and Pepsi have agreements with existing bottlers which prevents it from taking on new competing brands. So no scope for future competitors due to high capital costs in setting up a new plant. * Advertising: Huge advertising costs by Pepsi and Coke which cannot be matched up to. * Brand Image/Loyalty: It is virtually impossible for a new entrant to match this scale
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market share‚ PepsiCo and Coca-Cola have the lions share. They have dominated the industry over the past 40 years with Coca-Cola leading in the category in 2004. With little resistance from Cadbury Schweppes‚ the distant third largest company in the industry‚ the two companies’ main focus was to increase market demand by outdoing each other in promotions‚ advertisements‚ and corporate acquisitions. Rivalry and power struggle have defined the existence of PepsiCo and Coca-Cola‚ looking for a competitive
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Marketing Strategy Analysis of Coca-Cola and Pepsi Cola Two famous beverage companies exist in the market today‚ Coca-Cola and Pepsi Cola. Each competes intensely to distribute their beverage and food products to a global market for higher profits for the last several generations. In the free market‚ it can be difficult to determine which company uses the best practices in their marketing strategy as both use similar strategies to expand their local and global markets. In this paper the subjects
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Cola wars continue: Coke and Pepsi in 2010 (HBS 9-711-462) a. Use the 5-forces framework to explain why the soft drink concentrate industry has been so profitable. The soft drink concentrate industry has been very profitable for over 100 years. The reason can easily be found by analyzing the concentrate industry using the 5-forces model. According to the 5-forces model‚ each industry’s profitability can be assessed considering the five forces that influence the market – The rivalry among existing
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