Pepsi Versus Coke

In: Business and Management

Submitted By lynjackson2
Words 2828
Pages 12
My Business Plan Part I &II.
Lenora Jackson
Professor: Dr. Aldith A. Bell
Operations Management –BUS 515
June 10, 2012

Nora’s Cafe concept is built upon a café and bakery in the middle of a small near a major interstate. Nora’s Café dine-in or take-out establishment that will allow its customer’s an opportunity to take a break out of there busy schedules to have a beverage and a treat to eat. The menu will consist of gourmet coffees, teas, and other beverages, homemade and imported desserts, soup, deli sandwiches, chips, various salads. Some of the items may vary change due to the season and replace with something in season.
My mission is to provide a cafe that will give the people in town a place to fellowship while enjoying a special treat of their choosing. This venue will give the town a place to dine without having to drive for miles for a simple but delicious treat.

Operations strategy for Nora’s Café and Bakery
The business I would like to own is café and bakery shop in the rural area of my city. There are very few places to eat in my area and I think this is something that is needed and would be great for those traveling from North Carolina into Virginia look for a place to stop other than a truck stop . Looking at this situation, there are opportunities for those that have a desire to start a business. Currently the service station has a small convenience store, and there is a little country store that sells anything from hand-dipped ice cream, to grocery store items. Looking at my surroundings, I felt that a cafe and bakery would be a great asset for the people and the truck drivers coming through the main highway. My café / bakery would be opened to those students in the DECA program or vocational school students that need to get on the job training and work experience in their field.
The impact of operations strategy

Similar Documents

Pepsi vs Coke

...2007-2008 School of Sustainable Development of Society and Technology Malardalens University Vasteras, Sweden. Marketing Communication of Pepsi & Coca Cola in Pakistan! Muhammad Kashif Omer Malik 840310-P655 E-mail: Tutor: Leif Linnskog Date: 01 Sep 2008 Marketing Communication of Pepsi & Coca Cola in Pakistan 2008 Extracts Date Author 01 September 2008 Muhammad Kashif Omer Malik Qilah Lachman Sing, Ravi Road, Lahore, Pakistan. +923214912558 Master level thesis in Business Administration (15 ECTS) Marketing Communication of Pepsi and Coca Cola in Pakistan Leif Linnskog How the marketing communication of Pepsi cola and Coca cola is seen in Pakistan and how come the strong position of Pepsi cola? The research is done basically on the qualitative format in which some facts and figures are used for the support of the central issue of research. The data was collected by approaching different sources including primary and secondary styles. The purpose of this research is expose the facts of the appearance of both Pepsi and Coca Cola in Pakistan in terms of marketing communication. This research is mainly based on the marketing communication in which the purpose is to expose the either company’s marketing communication on the media and contribute the matter to the fact of Pepsi cola’s strong position. The appearance can be better in seen in the physical manner and the marketing communication is the best possible......

Words: 32489 - Pages: 130

Coke Versus Pepsi

...| Coca-Cola Versus Pepsi | The Coke Wars Financial Analysis | | Accounting 557: Financial Accounting Sumadi, Mohammad | | 12/15/2012 | | Possibly one of the biggest rivals in Corporate America today, the battle between Coca-Cola (KO) and PepsiCo (PEP) continues to baffle not only consumers but investors as well in determining which product is a better buy. While both companies have had recent problems in emerging nations such as India by having their products be condemned for improper ingredients, a shakeup like this might be necessary to promote future growth for possibly undersold equities. Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia. In May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia. John Pemberton concocted the Coca Cola formula in a three legged brass kettle in his backyard. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta on May 8, 1886.About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a......

Words: 2555 - Pages: 11

Coke or Pepsi

...little doubt that the most spirited and intense competition in the beverage world is between Coca-Cola and Pepsi Co., the two main players in the carbonated soft drink (CSD) production market. The competition between the two giants has benefited not only the consumers but also the companies. By checking and challenging each other in the market, the competition has lead to improvement and diversification of products and has forced each company to be creative and innovative. Throughout time, both companies have employed a number of diverse strategies to differentiate their products and to gain market share. Each successful tactic by one company would be copied by the opponent almost in the same manner or countered in a different fashion. As the CSD market has become more consolidated and saturated and as consumer demand and taste has changed, both companies shifted their attention to emerging nations and other major international markets as well as on other areas where they could grow their businesses (e.g. non-cola beverages and snack foods). The CSD industry involves the concentrate producers selling syrup (and sometimes sweetener) to bottlers, who add carbonated water and high fructose corn syrup to the concentrate, bottle or can, package and ship it food stores, fountain outlets, vending machines, convenience stores, and other outlet. Recently, both Coca-Cola and Pepsi Co. have pursued a strategic plan of backwards integration, consolidating their bottlers into one......

Words: 1008 - Pages: 5

Coke vs. Pepsi

...Coke Versus Pepsi : Differences in Cultural History Rather than Taste Posted by Nicole Smith, Jan 16, 2012 Food And Drink No Comments Print For many years, Coca Cola and Pepsi have enjoyed the position as the two most enjoyed soft drinks in the USA, as they have maintained their popularity over the past several decades. One can divide soft drink fans into two major camps: Coke-lovers and Pepsi-lovers. Each of the camps substantiates its favoritism not only on flavor, but also on ideas, facts, and preferences that justify its choice and allow it to stay true to its selection. The following analysis of the history of Pepsi and Coca Cola explores Pepsi and Coke with an emphasis on advertising and cultural significance of these efforts, discovering what makes these soft drinks so popular and what differentiates them from each other. What emerges is that there is little in the way of differences between Coke and Pepsi outside of different cultural histories. There are many similarities between Coca Cola and Pepsi and the history of Coca Cola is nothing like the history of Pepsi outside of the fact that both companies were advertising soda. Both were intended to serve as recreational drinks associated with parties, fun, sex, and entertainment. The two drinks have just about the same color, the same amount of carbon dioxide, and have a similar taste. While in the past they both used different natural extracts from the coca nut, nowadays they both rely on artificial flavors and......

Words: 1012 - Pages: 5

Coke Versus Pepsi Financial Analysis

...Pepsi's ROE of 35% is higher than Coke's ROE of 28%. The number of shares outstanding for coke is higher than pepsi. The asset turnover for Pepsi is roughly 1.6 times that of Coke. The asset turnover of Coke is lower than pepsi resulting in a lower ROE. Coke has to increase their sales or sell assets. The impact of this is reflecting in the higher ROE. The impact of this also is reflecting in the higher ROE. The operating costs are also high in the case of Coke. In regard to the valuations of Coke and Pepsi, Pepsi is undervalued as compared to Coke as the P/E ratio is 15.6; if we consider Coke P/E ratio of 18.4 the expected market price of Pepsi should be ~$70. The acquisition of CCE requires Coke to assume more debt resulting in higher leverage for Coke and higher operating expenses from a bottling company will result in a lower EPS. It will increase interest expense and affect the ROE adversely. Estimating the rate of interest using the interest expense paid in 2009's for the long term debt on the books, the ROE is expected to reduce to 25%. The acquisition of the bottling company will require that Coke shows the consolidated figures of the bottling company in its financials. The assets of Coke will increase however, there is not enough information for us to evaluate. We believe that after the acquisition of the bottling company the comparison between Coke and Pepsi will be worse. ----------------------- [pic]...

Words: 300 - Pages: 2

Coke vs Pepsi in India

...Case 1-3 Coke and Pepsi Learn to Compete in India Tyler McBee MKT 3450- 01 17 September 2013 3. Both Pepsi and Coca-Cola have effectively attempted to accommodate their products to the tastes and preferences of India. As an advertisement and sponsorship method, both companies have partnered with cricket, movies, and music. These three entertainment industries are very popular in India. Something that has set Pepsi and Coca-Cola apart from other companies in the food industry is partnering with religious and other festivities. Serving or sponsoring events like Navratri makes a huge impact on society’s eyes causing them to see Coca-Cola and Pepsi as socially responsible companies. Pricing policies in India is difficult to work with, because of the restrictions by the government. Pepsi has had a leg up on Coca-Cola because of their early entry into the industry. Obviously they have had better reactions from consumers because Pepsi seems to care, simply because it reached to smaller villages and different communities than Coca-Cola; in consumers’ eyes this appears that Pepsi just cares more. 5. An idea to help with their water issues within each company’s plants is to recycle water. If water is needed to run a machine or make a certain ingredient for the finished product and the water isn’t contaminated or altered by any way, why not reuse it? I believe that Coca-Cola approached the retalaliation of the water issue with a bad attitude. A foreign company......

Words: 601 - Pages: 3

Coke and Pepsi

...Case Two: Coke and Pepsi learn to compete in India 1) The political environment has played key role in the following ways: Indian government viewed as unfriendly to foreign investors. Outside investment have been allowed only in high-tech sectors and was almost entirely prohibited in consumer goods sectors. If an item could be obtained anywhere else within the country, imports of similar items were forbidden. This gave Indian consumers have little choice of products or brands and no guarantees of quality or reliability. Also, Indian Laws, the government mandated that Pepsi’s products be promoted under the “Lehar Pepsi” name. For Coca-Cola, they attempted to enter into Indian market by joining with Parle and became “Coca-Cola India”. Some of these things may have been anticipated, especially the corruption within Indian government. As far as the contamination issues goes, that might not have been so easy to anticipate. Both companies held their own when trying to prove their products were within safe limits compared to other food products. They could have developments in political arena; Coke could agree to start new bottling plants instead of buying out Parle, and, therefore, wouldn’t agree to sell 49% of their equity. 2) Coca-Cola entered the market again a few years after Pepsi entered. While Coke's application was being denied, Pepsi's was being approved which gave them a head start in the market. Although it would seem that Pepsi would benefit from getting a......

Words: 756 - Pages: 4

Case Study: Estimating the Cost of Capital – Coke Versus Pepsi 2001

...The purpose of this paper, prepared by Jessica Chan under the supervision of Robert F. Bruner is about analyzing the companies Coca Cola and Pepsi after Pepsi has announced a merger with Quaker Oats Company with a deal at around $14 billion. With this deal Pepsi would have access to 83.6% of the sport drink market and around 33% of the U.S. noncarbonated-beverage market, followed by Coke with 21%. The paper wants to answer the questions how the latest announcement of Pepsi has an effect on the two companies´ prospects for value creation by showing the company background of both companies, giving a briefly industry overview of the beverage market and competitive events and establishing a financial comparison, especially with ratio and economic profit analysis. In the world Coca Cola and Pepsi have towered as the two leading brands of beverages. In the year 2000, Coca Cola was the largest manufacturer, distributor, marketer of soft-drink concentrates and syrups in the world and its market value reached $110.01 billion. On the other side Pepsi was a $20 billion worth company in 2000, acting in the snack food, soft drink and noncarbonated beverage market. Both companies have reached worldwide expansion of their markets, which include a large product range of beverages, apparel and paraphernalia with their respective logos. Both have grown into longstanding global and social industry leaders. Coca Cola´s annual sales were $20.5 billion which were earned also through a variety of...

Words: 464 - Pages: 2

Coke vs Pepsi Analysis

...because of its tasty product, focuses on marketing and advertising to make a profit. Coke and Pepsi employed the following technique to make the soft drink industry profitable: marketing (Yoffie 21). Coke and Pepsi have dominated the market on soft drinks by offering a product that people enjoy, at a price that the average Joe can afford, and by utilizing marketing strategies and campaigns. Through effective leadership, an environment was created which enabled success and profitability as well as creative strategies and campaigns. Both Coke and Pepsi developed and deployed aggressive marketing campaigns which began generations ago by fighting trademark infringements and continued with cleaver and aggressive sales techniques. By branching into other flavors and types of drinks via mergers and acquisitions, both Coke and Pepsi generated additional revenue from more than just their core beverage. The fierce competition the two Cola Giants created, ensured profitability and world recognition of the American developed carbonated soda. 2. Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? The concentrate business has been historically dominated by large magnates such as Coca-Cola and Pepsi. Data, from the case study, detailing the industry breakdown indicates that Coke held 51% of market share in 2003 while Pepsi and Cadbury Schweppes held 22% and 6% of international market shares for that......

Words: 1960 - Pages: 8

Coke vs Pepsi

...The aim of this case study - “Coke Versus Pepsi, 2001” is to analyze the trend of both companies – Coke and Pepsi, after announcement of Pepsi’s acquirement to Quaker Oats, based on the past and forecasted information and materials. This essay would use “Economic Value Added” (EVA) measure, in order to identify the expected values of both companies. Carolyn Keene, the consumer analyst at mutual fund firm SPL, believed that the value comparison of Coca-Cola and PepsiCo should be measured by EVA. So what is EVA? Economic Value Added is a popular method of value creation developed by Stern Stewart and Co of New York. It is a measure of economic profit. The EVA is the difference between the firm’s after-tax return on capital and its cost of capital. Stewart states that the earnings, earnings per share, and earnings growth are misleading measures of corporate performance, and the best practical periodic performance measure is economic value-added. The formula to measure EVA is: EVA= NOPAT – (invested Capital x WACC). EVA is a dollar amount and if that amount is positive, the company can earn more net operating profit after tax than the cost of capital used to generate the profit. There are a number of advantages that should be addressed of using EVA as a measure of company performance. The first one is the close relationship with NPV who is the most common measure of company performance. EVA is closest in spirit to corporate finance theory that argues that the value of the......

Words: 1953 - Pages: 8

Coke and Pepsi

...Financial Analysis: Coke vs Pepsi Computed 2009 Ratios and Commentaries (see table) Coke has higher operating and profit margin compared to Pepsi. The share price of Coke reflects a higher Price to Earnings ratio 18.4x compared to Pepsi 14.2x. This is likely due to the equity market having more confidence in the continuation and sustainability of Coke’s earnings than Pepsi. However, the equity market had priced a discount on Coke’s market capital structure compared to Pepsi. This can be seen from the market to book ratio where investors value Pepsi's balance sheet structure more than Coke. Pepsi is priced 5.5x of equity value compared to Coke which is priced only at 5x. Having a higher operating and profit margin, Coke is more likely to be able to sustain any shocks in the market (eg. from lower sales). The sustainability of Coke’s earnings are also helped by more efficient tax structure seen from lower effective tax rate compared to Pepsi. Its Selling General Administration expenses are also within the industry norm (compared to Pepsi). Coke’s has room to further improve its efficiency by improving its balance sheet structure. This includes a more efficient use working capital (eg. reducing receivables and inventory days), using higher leverage to attain higher return on equity and optimizing/sweating the assets more to generate higher asset turnover. Coke’s acquisition is substantially cashless. It exchanged $3.4bn of equity investment it had in CCE and...

Words: 443 - Pages: 2

Coke and Pepsi

...COKE AND PEPSI 1. Why, historically, has the soft drink industry been so profitable? 2. Why is the profitability of the concentrate business so different to that of the bottling business? 3. How has the competition between Coke and Pepsi affected industry profits? 4. Can Coke and Pepsi sustain their profits? Answers: 1. Market forces are promising for profits through the Porter’s five forces analysis. The soft drink industry has been profitable over the last couple of years for the following reasons. The soft drinks have become more available and with the addition of flavored and diet options which have made more Americans consume hence increasing the profitability of the industry. Revenues have also been extremely intense even with the bottling companies. We could also say that the soft drink industry has been controlled by just Coke and Pepsi which in return has given them positive economic profit. Also, the companies in charge of Coke and Pepsi started expanding their profits through collaborations and acquisitions of subsidiary bottled water and tea companies. For example, Coke and Nestea, Pepsi creating Orange Slice. The inputs for both products were mainly sugar and the packaging. And if sugar got expensive they could switch to corn syrup as they did in the earl 1980’s. Lastly, the soft drink industry were able to sell to buyers through five principal channels and the most principal suppliers were supermarkets. 2. There are higher number of bottler’s......

Words: 500 - Pages: 2

Coke and Pepsi

...These days Coke and Pepsi are using the 4Ps of marketing mix (Price, Product, Place and Promotion) in such a way so that a good quality can be provided to the consumers at a reasonable price to attract the consumers towards their brands. Both the companies know that there is so much potential in the Indian soft drink industry and the can increase their sales by making good marketing strategies. So, they are spending a huge amount of money on advertising and other sales promotional activities of their brands SOFT DRINK INDUSTRY: AN OVERVIEW It all began in 1886, when a tree legged brass kettle in Hohn Styth pemberton’s backyard in Atlanta was brewing the first P of marketing leged. Unaware the pharmacist has given birth to a caromel colored syrup, which is now the chief ingredient of the world’s favorite drink. The syrup combined with carbonated the soft drink market. It is estimated that this drink is served more than one thousand million times in a day. Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and book keeper. Pemberton & Robinson laid the first foundation of this beverage when an average nine drinks per day to begin with, upping volumes as sales grew. In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the 1950’s Colas were a daily consumption item, stored in house hold fridges. Soon were born other non- Cola variants of this product like orange & Lemon. Now, the soft drink industry has......

Words: 853 - Pages: 4

Coke and Pepsi

...Case Study, Coke & Pepsi Shuang Li Integrated Marketing, Section 008 September 12th, 2015 1. Why, historically, has the soft drink industry been so profitable? Customer High consumption need in the market. Since 1970 consumption of CSDs grew by an average of 3% per year for 30 years. Compare to other beverage, Americans drank more soda. Market Environment The soft drink industry just likes an oligopoly market, and Coke and Pepsi have too big market share to affect the industry. Therefore, other companies are very difficult to entry this industry Little capital investment and material cost The soft drink producers do not need much investment in machinery, labor, and overheads, so they can save their capital investment. Substitutes Although there are lots of substitutes, like beer, milk, coffee, but they do not have huge marketing. However Coke and Pepsi spend a lot on advertising and brand building, so they got brand loyalty. 2. Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? Bottlers need huge capital to invest in their manufacturing processes, while concentrate companies do not need that much costs. 3.How has the competition between Coke and Pepsi affected the industry’s profits? The competition between the Coke and Pepsi often led to price war, which are companies offering products at discounted prices. This activity always makes lower price, and it weaken the......

Words: 327 - Pages: 2

Coke vs. Pepsi

...              PepsiCo – CocaCola Case Write-Up 11/09/15 Danny Blanks Ben Crook Will Dauterive Alberto Fernandez Zijian “Justus” Jia     Case Questions Coke vs Pepsi 1) What is EVA? What are the advantages and disadvantages of using EVA as a measure of company performance? EVA stands for economic value added. EVA is a value based financial performance measure based on Net Operating Profit after Taxes, the invested capital required to generate that income, and the WACC. The primary advantage of EVA is that it provides a measure of wealth creation that aligns the goals of divisional or plant managers with the goals of the entire company. A primary disadvantage with EVA is that it struggles to control for size differences across organizational units compared to Return on Investment (ROI). Another disadvantage with EVA is that numbers can be easily altered or manipulated to boost EVA, therefore painting a better picture than what actually exist. EVA also places a large emphasis on producing immediate results, thereby creating a disincentive for management to invest in quality projects. 2) Please examine the historical performance of Coca-Cola and PepsiCo in terms of EVA. What trends do you observe? What are the factors behind those trends? What do you think are the key drivers of EVA? Through observing EVA for Coca-Cola and PepsiCo, we noticed a few things. First, Coca-Cola’s EVA seems to be more stable, but...

Words: 1020 - Pages: 5