Coke and Pepsi
Group 3 :
Berman Nathanael, Elizabeth Megawati, Mulyadi, Rery Indra Kusuma,
Ronggo Sulistyohadi, and Sri Marianggoro Kencono
Financial Management
Ekesekutif B 27 C
2
0
10
20
30
40
50
60
1970 1975 1981 1985 1990 1995 2000 2005 2007 2008 2009
Ga
llo
ns
/ca
pit
a
U.S. Beverage Consumption
Coffee
Beer
CSD
Milk
Bottled Water
4Ps Analysis
3
PRODUCT
• Carbonated
soft drinks
• Non-
carbonated
soft drinks
PRICE
• Pepsi value
proposition
• Coke the
“premium” brand
PROMOTION
• Investment in
Trademarks
• Retail Shelf Space
• Ad Campaigns
PLACE
• Retail channels
• Fountain
Outlets
• Vending
Machines
• Mass
merchandise
Historical Timeline
4
1886-1899 1900-1929 1930-1959 1960-1973
1886-John S.
Pemberton
develops original
recipe
1898-Caleb
Brodham creates
Pepsi
• Big name
endorsements
• Iconic contour
bottle
• Bottling plants in
Europe and the
Philippines
• Robert Woodruff
named CEO
• Franchises in 24
states
• Files for
bankruptcy
• Second bankruptcy
• Acquires sugar
plantation in Cuba
• Rebounds by
marketing product
value
• Becomes second in
the cola market
• “Beat Coke”
campaign
• Emerges as cola market
front-runner • C registered trademark
• Price raised from a
nickel to a dime
• Diversifies offerings
(Sprite, Tab)
• Remains #1 in national
cola sales
• Diversifies offerings
(Mountain Dew)
• Merges with Frito-Lay
(PepsiCo) & expands
into the snack food
business
Historical Timeline
5
COLA War Years 1974-1999 2000-2010
• In response to federal nutrition
guidelines and public concern with diet
and obesity offers alternative low calorie
beverages
• Wins Subway account, retains exclusive
deals with Burger King and McDonalds
• Holds big lead over Pepsi in cola market
• In response to federal nutrition
guidelines and public concern with
diet and obesity offers alternative low
calorie beverages
• Supplies all Taco Bell, KFCs and
most Pizza Huts again
• Snack food lines very profitable
• High-fructose corn syrup replaces sugar
• Diet Coke introduced, boosts profits
• New Coke fails, Coca Cola Classic
returns
• Coca Cola Enterprises established
• Maintains lead in cola market share
• The “Pepsi Challenge”
• Pepsi Lite (1 Calorie) introduced
• Enters fast-food business
• Outpaces Coke in food store sales
• High-fructose corn syrup replaces
sugar
• Pepsi Bottling Company goes public
Company Background
The Coca Cola Company
In 1985 , One of the strategy was spin off its
bottling operations to avoid consolidation in
balance sheets and its reflects to the rise of ROE
from 23 % to 57 % over the last two decades
From 1993 to 1998 had consistently garnered the
first or second position in Fortune’s annual market
In 2000 The Coca cola company annual sales
were 20.5 billion and its market value reached
110.1 billions US$
6
The Coca Cola Company
Doug Ivester, CEO on 1997 – 1999, do instituted
7.7% hike on syrups, a rate that double from usual
increase. The bottlers company influenced,
during his 2 years term, net income fell 41%
Dauglas Daft, as the successor doing
organization such as cutting staff and reducing
bureaucracy. But one that important that his
statement to become the dominant players in
non carbonated beverages market
7
Company Background
PepsiCo, Inc
In 200o, PepsiCo, 20 billion company that
involved in snack foods, soft drinks and non
carbonated beverages business.
The company sold and distributed salty and
sweet snacks under the frito-lay trademarks and
manufactured consentrates of Pepsi, Mountain
Dew, and other brands. Also produces and
distributed juices and other non carbonated
beverages.
8
PepsiCo, Inc
Roger A. Enrico, CEO 1996 – 2000, instituted a
massive overhaul at PepsiCo
He sold off fast food chains KFC, Taco bell and
Pizza Huts in 1997
In 1999, he spun off capital intensive bottling
operation into an independent public company,
focus only selling concentrate to bottlers
In the same years, he does some acquisitions,
Tropicana and Quaker oat
During his term, ROE increase from 17% in 1996
and 30% in 2000.
9
S.W.O.T - Strengths
Most valuable brand for 13 years
Distribution in 200 countries
Extensive global dist. network
Leader in fountain accounts
Strong in emerging markets: China,
Brazil, Eastern Europe
Valuable brand
Diversification: “The power of one”
Extensive global dist. network
Leader in non-CSD
Successful marketing campaigns:
celebrity endorsements
13
S.W.O.T - Weaknesses
Declining market share since 2000
CSD focus: only 32% non-CSD
share
Price pressure from mass retailers
(Wal-Mart) : 40% of U.S. packaged
sales
Declining market share in beverages
Overdependence on U.S. markets:
50% of total sales
Low market share in fountain
accounts: 20% vs. Coke’s 69%
14
S.W.O.T - Opportunities
Expand non-CSD: juice, sport, energy, bottled water
VitaminWater, Odwalla (Coke), Gatorade, Naked (Pepsi)
Expand and modify CSD line: Stevia
Sprite Green (Coke), Pepsi Next, Trop50 (Pepsi)
Global expansion in emerging markets: India, China, Brazil (Coke) Russia
(Pepsi)
Innovative offerings tailored to local tastes
Sprite Tea (Coke), herb drinks (Pepsi)
Growing nutritious snacks product markets
15
S.W.O.T - Threats
Changing consumer tastes and preferences
Competition with each other
Threat of substitutes
Price pressure from mass retailers
Price pressure from int'l bottlers
Government restrictions in U.S. and abroad
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The Coca-Cola Company Overview
Still a beverage focused company: 70% of their revenue comes
from CSD sale
#57 in Fortune 500
International market corresponds 59% net revenue
Reached 1.9 billion servings each day
Present in +200 countries
#3 best global brand - $79.2 billion value
1.4%in sales growth
18
The Coca-Cola Company
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Portfolio
+500 non-alcoholic beverage brands
Acquired Zico Pure Premium Water
Launched Coca-Cola life in Argentina & Chile: 1st reduced-
calorie cola sweetened w/ a blend of sugar and stevia
Pepsi Co
Overview
It is a diversified company: beverages, snacks and breakfast
#43 in Fortune 500
52% of their net revenue comes from food
US is still responsible for 51% net revenue
38% more revenue than Coca in 2011, but only 12bi came from Soda
20
Pepsi Co
Portfolio
Product mix: 63% food 37% beverage
22 brands that generates 1bi in retail sales each
21
22
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Q&A
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