Coca Cola/Pepsico Strategy Analysis

16/10/2012 Saxion University of Applied Science Module International Business Plan – Mr. J. Oude Rengerink IBMS Project 6 – Gr. C1 Analysis International Strategy; Part 1 – Second Version Tim Herbers (153139) Angelika Kuhn (147613) Sebastiaan Prins (112381) Luc Zijlmans (149689) Saxion University of Applied Science Module International Business Plan – Mr. J. Oude Rengerink IBMS Project 6 – Gr. C1 Analysis International Strategy; Part 1 – Second Version Tim Herbers (153139) Angelika Kuhn (147613) Sebastiaan Prins (112381) Luc Zijlmans (149689) | Coca Cola & Pepsi| Analysis International Strategy|Coca Cola & Pepsi| Analysis International Strategy| Index 1. Analysis International Strategy3 2. The Coca-Cola Company & PepsiCo4 3. Marketing5 3. 1 Marketing mix of Coca Cola5 3. 2 Marketing mix of Pepsi7 3. 3 Brand differentiation8 3. 4 Coca-Cola & Pepsi Worldwide8 4. Management9 4. 1 Management Coca-Cola9 4. 2 Management PepsiCo11 4. 3 Management co mpared12 5. Financial Position12 5. 1 Profitability13 5. 2 Liquidity14 5. 3 Solvency15 6. Production16 6. 1 Comparison Production17 7. Research and Development18 7. 1 Research and Development & Sustainability20 8. In Overall21 9. Coca-Cola Company or PepsiCo21 0. References22 1. Analysis International Strategy Before it could be determined whether the Coca-Cola Company or PepsiCo is most suitable for entering a new market, a thorough examination and evaluation of their current (internal) strategy has be performed. Several variables will be researched upon, including Human Resource Management, sustainability and ethics, management aspects (financial part of the business plan), and strategic international marketing position. During this first part we will be answering the question ‘What are the strengths and weaknesses of the companies Coca-Cola and PepsiCo? . 2. The Coca-Cola Company & PepsiCo The Coca-Cola Company Coca-Cola is a carbonated soft drink that is sold in stores, re staurants, and vending machines available in more than 200 countries throughout the world. Nowadays it is rather difficult to think of a country where it is not available. With a portfolio of more than 3,500 beverages, from diet and regular sparkling beverages to still beverages such as 100 per cent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages, their variety spans the globe.The company has 146,200 employees around the world and operates its business for 126 years respectively. Its headquarters is located in Atlanta, USA. In financial circles, Coca-Cola has been one of the strongest and most reliable trading stocks, showing a steady return in all of its years of existence but one. However, Coca Colas market share has slipped, but still dominates in much of Europe and South America. PepsiCo The carbonated soft drink producer sells its products in nearly 200 countries throughout the world. Their product assortment i ncludes 22 brands that each generate more than $1 billion each in annual retail sales.The company employs 297,000 people around the globe and is twice as much as that of Coca Cola and sells its products under the name of Pepsi Cola since 1898. Its headquarters is located in Purchase, USA. Pepsi mostly dominates in Asian markets as compared to Coca Cola. In financial circles, Pepsi is known to provide a steady growth when it comes to sales revenue as well as profit. Their sales revenue in 2011 is one third higher than that of 2008 and a disruption in that trend is not expected by sales forecasts. 3. Marketing 3. 1 Marketing mix of Coca Cola ProductThe Coca-Cola Company’s products consist of beverage concentrates and syrups, with the main product being the finished beverages and can be seen as both business and consumer products. The type of consumer product the Coca-Cola Company creates is convenience product. Convenience products normally require a wide distribution in order to sell sufficient quantities to meet profit goals In addition, the Coca-Cola Company often pays a certain amount to retail stores to resell their product. Therefore the Coca-Cola Company products can be considered a business product.The Coca-Cola Company has a fairly large product mix which contains about 400 brands, including diet and light beverages, waters, juice and juice drinks, teas, coffees, energy, and sports drinks. Since 1960 they have increased their product mix continuously. Place Coca Cola is sold in stores, restaurants, and vending machines in more than 200 countries. The headquarter is located in Atlanta, Georgia. Promotion Advertising According to Gary Armstrong and Philip Kotler, â€Å"Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Coca-Cola has used advertising to build an image for its company. Here are some of the types of advertising that Coca-Cola uses: * Television commercial; ga in good marketing coverage by appealing to consumer's senses. * Magazines; geographically and demographically select consumers that it wants to target. * Outdoor advertising; strategic placements achieve high repeat exposure. * Internet; allows customers to become interactive through various games, contests, shopping. Public Relations Coca-Cola handles public relations by including a press centre on its website.This section of the website allows consumers to view press releases, executive speeches, and statements made by the company regarding current information. In the statements, Coca-Cola can address law suits, rumours, stories, new products, and activities. Personal Selling Coca-Cola has many salespeople, who are individuals representing the company to communicate, sell, service, and build relationships with customers. These individuals form close relationships with the customers and visit them not unusual many times per week. Sales promotionCoca-Cola often runs sales with store s to quickly increase sales. Coke gives its product to the retailer for a lower price, and in-turn the retailer sells the product on sale. To advertise for these sales, the retailer generally runs an ad in their store sales circular at attract consumers. Direct Marketing Coca-Cola uses direct marketing in many ways. First, the company partners with various restaurants, movie theatres, etc. to carry its product. This way, when a customer orders a drink, the only brand they are offered is Coca-Cola, which forces them to buy a drink from that brand.By doing this, Coke forces out other competition, and keeps the restaurants, or other businesses, purchasing their product over and over again. Price Average price in the capitals for one can 350ml (2011): Greece, Spain, Belgium: $1. 74 Switzerland:$1. 72 United Kingdom:$1. 54 United States:$0. 79 Russia:$1. 07 India:$0. 36 China:$0. 26 3. 2 Marketing mix of Pepsi Product The Pepsi-Cola drink contains basic ingredients found in most other si milar drinks including carbonated water, high fructose corn syrup, sugar, colourings, phosphoric acid, caffeine, citric acid and natural flavours.The caffeine free Pepsi-Cola contains the same ingredients but no caffeine. Pepsi’s most popular product range include Diet Pepsi, Gatorade, Mountain Dew, Thirst Quencher, Tropicana, Aquafina Bottled Water, Sierra Mist, Fritos Corn chips, Cheetos, Ruffles Potato Chips, Lays Potato Chips, Tostitos, Doritos. Place Pepsi is sold in stores, restaurants, and vending machines in nearly 200 countries. The headquarter is located in Purchase, New York. Promotion Advertising Likewise Pepsi has used advertising to build an image for its company. * Television commercial; gain good marketing coverage by appealing to consumer's senses. Magazines; geographically and demographically select consumers that it wants to target. * Outdoor advertising; strategic placements achieve high repeat exposure. * Internet; allows customers to become interactive t hrough various games, contests, shopping. Public Relations Pepsi gets involved in Public Relations via social networks like Facebook. Community services as well as social campaigns are addressed on the company’s internet page. Personal Selling In order to keep up with the core competition, Pepsi’s salespeople are inevitable building similar relationships with customers like Coca Cola.Sales promotion Sales promotion is similar to that of Coca Cola. Direct Marketing The direct marketing strategy is equally to that of Coca Cola. Price Average price in the capitals for one can 350ml (2011): United Kingdom:$0. 38 United States:$0. 79 Canada:$1. 02 Egypt:$0. 66 India:$0. 12 China:$0. 10 3. 3 Brand differentiation Brand differentiation takes place after understanding what the customers wants and therefore meeting the core need. Pepsi and Coca-Cola are popular black soft drinks and mostly contain sugar and water with a slightly difference in taste.Although the ad campaigns run by both companies would have people think otherwise, the soft drink similarities are striking. A study found that 80 per cent of people cannot differentiate a sample of Coca-Cola (NYSE: KO) from a sample of Pepsi. In essence, it does not matter how the DNA of the product looks like, but how it is presented. On the one hand there is Coca-Cola, the secret inventor of cola, the original product since the establishment on the market. Pepsi, on the other hand, was born a few years after Coke and stands for something new. It markets its product being committed for a new generation.Pepsi does have a slight advantage over Coke in diversification. Pepsi has snack food brands such as Frito-Lay and Quaker. They also own the brands that make beverages such as Gatorade, Tropicana and Naked Juices. While Coke hasn’t tapped the snack food market, they do have some beverage diversification. Dasani bottled water, PowerAde and Minute Maid juices are all part of Coca-Cola. 3. 4 Coca-Cola & Pep si Worldwide The Coca-Cola Company and PepsiCo both have very successful drinks. Although Coca-Cola is greater than PepsiCo as a company as well as the amount of brands/drinks, their drinks are quite similar and therefore comparable.They also have a wide range of promotional activities. They use practically all communication mediums there are and invest huge amounts in building customer relationships. Coca Cola and Pepsi are sold in around the 200 countries worldwide. Both headquarters are located in the United Stated. The price of Coca Cola is more expensive than Pepsi in most countries. Since most people cannot taste the difference between the two, the difference in price lies with that Coca Cola is more known and wins from Pepsi on image. It is seen as a slightly ‘better' brand. . Management 4. 1 Management Coca-Cola Management Every company needs a strategy, to ensure that everything goes well within the firm. Strategic management affirms the company being well organized a nd no detail being left out. It is essential to make sure that the company is doing well internally. Business start up Coca-Cola was first introduced by John Smyth Pemberton. The distribution took place by carrying the product in a jig down the street to Jacob’s Pharmacy, where people were buying the drink for five cents at the soda foundation. StrategyNowadays, the Coca-Cola Company operates in more than 200 countries and markets more than 500 brands. Hereunder, four of the world’s top five soft drinks brands, which explains the enormous success and makes them to the world’s largest beverage company. The unique brand is consistently offering products of the highest quality and delivers creative and innovative marketing programs worldwide. The global availability and ongoing innovation, continually provides its consumers with new product offerings, with each country having its own unique needs and requirements.Mission * To refresh the world†¦ * To inspire m oments of optimism and happiness†¦ * To create value and make a difference. | Vision * People: Be a great place to work where people are inspired to be the best they can be. * Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. * Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. * Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. * Productivity: Be a highly effective, lean and fast-moving organization. | Values * Leadership: The courage to shape a better future * Collaboration: Leverage collective genius * Integrity: Be real * Accountability: If it is to be, it's up to me * Passion: Committed in heart and mind * Diversity: As inclusive as our brands * Quality: What we do, we do well Structu re The Coca-Cola’s primary business consists of manufacturing and selling beverages.The company sells their concentrates and syrups to bottling partners, which have the authorization of manufacturing, distribution and selling branded products to consumers around the globe with supreme quality and service. The relationship with its bottlers worldwide is a key source of strength and is referring to ‘the Coca-Cola system’. Culture The organizational culture describes the way a business does things, including patterns of behaviour and relationships. Therefore, the employees of the Coca-Cola Company are the most important asset, highlighting teamwork and empowerment.Not only employees, but also customers and bottling partners feel valued in this friendly, trustful and innovative culture and their motivation provides the engine that drives the Company’s growth. Based on relationships, The Coca-Cola Company provides a number of open communication channels as mont hly leadership team meetings and employee team briefing sessions and surveys to monitor employee views and feelings. 4. 2 Management PepsiCo Business start up Pepsi was first introduced as ‘Brad’s Drink’ by Caleb Bradham in 1893. The drink was produced and sold in his drugstore. StrategyThe company operates in more than 200 countries. PepsiCo has competitive advantage in the beverage industry  because of big brands, proven innovation and differentiated products. Their strong brand, socially responsible employees and corporate beliefs continues its stance as one of the most powerful companies in the world. Mission 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. Vision â€Å"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today. † Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Goals and Values Ensure high levels of associate engagement and satisfaction compared with other Fortune 500 companies * Foster diversity and inclusion by developing a workforce that reflects local communities * Encourage our associates to lead healthier lives by offering workplace wellness programs globally * Ensure a safe workplace by continuing to reduce lost time injury rates, while striving to improve other occupational health and safety metrics through best practices * Support ethical and legal compliance through annual training in our code of conduct, whic h outlines PepsiCo's unwavering commitment to its human rights policy, including treating every associate with dignity and respect Structure This adaptive organization is continuously seeking for improvement and keeping new ideas in the marketplace. PepsiCo has a decentralized organizational structure. Operational decisions are being made within the separate business units while being governed by policies at the corporate level. Culture PepsiCo offers a culture that encourages initiative, risk taking and access to decision makers.Employees have superior opportunities to pursue their goals. The company considers their culture as fairly uniform. â€Å"Extremely competitive and very focused†. Trust, respect, fairness and teamwork are being valued. Managers must be able to attract, retain and develop talents in order to achieve efficient and effective results, which are significant for PepsiCo’s expectations. Benefits as bountiful retirement packages, tuition reimbursement and legal assistance programs are being praised by their employees. 4. 3 Management compared Each company tries to outdo each other and tries to produce the best product. The battle of the two companies gives life to the industry.Both companies have a long history and have been tried and tested. The two are showing social responsibility in the community and have invested heavily in recycling programs. However, The Coca Cola Company is the market leader. It has built internal and external structures to support the delivery of its business goals. It has the best structure of supporting growth, allowing attention to local requirements and building on a clear strategic direction from the centre at the same time. To build its growth on, the company has a firm foundation of relationships and open communication channels. 5. Financial Position What is the financial position of PepsiCo?The last year’s PepsiCo has been a very financially healthy company. But like many companies also P epsiCo suffered a bit from the financial crisis. If we first look at the income statement of PepsiCo we can see that PepsiCo is now recovering from the blow they took from the financial crisis and are increasing their revenue and profits. They are recovering by spending more money on their marketing in their home market and also doing more investments then the years before. In 2009 investments were only 2. 1 billion and in 2011 their 3. 4 billion. This strategy is helping them to get back on track. We can see this strategy back in their cash flow statement and in their balance sheet.What is the financial position of Coca-Cola Company? The Coca-Cola Company has always been market leader with their coke and has always been a very strong company, not just financially but also their brand name is very strong. Even though they have a very strong brand name they took a blow in 2008 with the economic crisis and had to cut their costs and investments substantially. In 2011 their managed to get their revenue up by 11 billion but their profit stayed the same as in 2010. This was because they started to invest more; this is something that the competitor PepsiCo did as well. So both companies are recovering and doing well. 5. 1 Profitability PepsiCo Inc. , profitability ratios   | Dec 31, 2011| Dec 25, 2010| Dec 26, 2009| Dec 27, 2008| Dec 29, 2007|   | Return on Sales| | Gross profit margin| 52. 49%| 54. 05%| 53. 51%| 52. 95%| 54. 30%| | Operating profit margin| 14. 48%| 14. 41%| 18. 61%| 16. 09%| 18. 19%| | Net profit margin| 9. 69%| 10. 93%| 13. 75%| 11. 89%| 14. 33%|   | Return on Investment| | Return on equity (ROE)| 31. 29%| 29. 86%| 35. 38%| 42. 47%| 32. 83%| | Return on assets| 8. 84%| 9. 27%| 14. 92%| 14. 29%| 16. 34%| Coca-Cola Co. , profitability ratios |   | Dec 31, 2011| Dec 31, 2010| Dec 31, 2009| Dec 31, 2008| Dec 31, 2007|   | Return on Sales| | Gross profit margin| 60. 86%| 63. 86%| 64. 22%| 64. 39%| 63. 4%| | Operating profit margin| 21. 82%| 2 4. 06%| 26. 56%| 26. 44%| 25. 13%| | Net profit margin| 18. 42%| 33. 63%| 22. 02%| 18. 18%| 20. 73%|   | Return on Investment| | Return on equity (ROE)| 27. 10%| 38. 09%| 27. 52%| 28. 37%| 27. 51%| | Return on assets (ROA)| 10. 72%| 16. 19%| 14. 02%| 14. 33%| 13. 82%| In the table’s you can see the most important profitability ratios for PepsiCo and Coca-Cola Company. The gross profit margin indicates the percentage of revenue that is used to cover operating and other expenses. For the last years Coca-Cola always had the better profit margin ratio because they do not have such a diverse product range as PepsiCo does.PepsiCo also works in other markets like cereal and potato chips where the gross profit margins are usually lower. This accounts for all of the return on sales ratios. The return on investments are not very different for both companies but PepsiCo did some major investments in equity the last few years and they still managed a very high return on equity which a good result. Both companies have good returns on their investments. We can clearly see that Coca-Cola has a higher profitability; a big difference is the net profit margin where they score much better then PepsiCo. But both companies are doing very well profitability wise. 5. 2 Liquidity PepsiCo Inc. , liquidity ratios   | Dec 31, 2011| Dec 25, 2010| Dec 26, 2009| Dec 27, 2008| Dec 29, 2007| | Current ratio| 0. 96| 1. 11| 1. 44| 1. 23| 1. 31| | Quick ratio| 0. 62| 0. 80| 1. 00| 0. 79| 0. 89| | Cash ratio| 0. 24| 0. 40| 0. 47| 0. 26| 0. 32| Coca-Cola Co. , liquidity ratios |   | Dec 31, 2011| Dec 31, 2010| Dec 31, 2009| Dec 31, 2008| Dec 31, 2007| | Current ratio| 1. 05| 1. 17| 1. 28| 0. 94| 0. 92| | Quick ratio| 0. 78| 0. 85| 0. 95| 0. 62| 0. 58| | Cash ratio| 0. 58| 0. 61| 0. 67| 0. 38| 0. 33| The current ratio of PepsiCo is a shock because looking at this number they have serious liquidity problem. It took a major blow from the economic crisis looking at numbers from 2007 and 2008 when the current ratios were at a much more healthy level.Also Coca-Cola’s current ratio’s is much lower than it used to be but when we look at the current ratio in 2008 and 2007 the ratio was lower than it is now so it might be that this is not an unusual position to be in for Coca-Cola . The quick ratio shows if a company can currently pay back their current liabilities. Both companies are not able to do this but for big companies like Coca-Cola and PepsiCo this is a normal quick ratio and they do not have something to worry about. The Cash ratio of PepsiCo is much lower than Coca-Cola this might also be the cause for their low current ratio they do not have a lot of cash on their bank but they use it mostly for investments. Overall the liquidity position of Coca-Cola is better and Pepsi might need to reconsider to improve their liquidity position. 5. 3 SolvencyPepsiCo Inc. , debt and solvency ratios |   | Dec 31, 2011| Dec 25, 2010| Dec 26, 2009| Dec 27, 2008 | Dec 29, 2007| | Debt to equity| 1. 30| 1. 18| 0. 47| 0. 68| 0. 24| | Debt to capital| 0. 57| 0. 54| 0. 32| 0. 40| 0. 20| | Interest coverage| 11. 32| 10. 12| 21. 35| 22. 41| 35. 12| Coca-Cola Co. , debt and solvency ratios |   | Dec 31, 2011| Dec 31, 2010| Dec 31, 2009| Dec 31, 2008| Dec 31, 2007| | Debt to equity| 0. 90| 0. 76| 0. 48| 0. 45| 0. 43| | Debt to capital| 0. 47| 0. 43| 0. 32| 0. 31| 0. 30| | Interest coverage| 28. 43| 20. 43| 26. 20| 18. 14| 18. 37| PepsiCo finances their company more with equity and capital than Coca-Cola Company does.You can see this when you look at the debt to equity and debt to capital ratio which are much higher in the case of PepsiCo especially the debt to equity this is because of the big investments in equity that PepsiCo did this year and last year. Even though the Coca-Cola Company is financed more by loans, this is not a problem for Coca-Cola because their interest coverage ratio is very high and their profits have been an in stable grow th as where PepsiCo has a much lower interest coverage ratio which is declining every year since the start of the economic crisis. 6. Production Intangible resources Coca-Cola is the absolute leader in the carbonated soft-drink market and is recognised as the most valuable brand worldwide. The company? greatest strengths are in its intangible resources. Because of the great reputation and image, they differentiate themselves from competitors like Pepsi. Coca-Cola can be bought in almost every country worldwide and is available in practically all snack shops, supermarkets, train stations, and so on. This success exists because the huge investments in marketing and Coca-Cola's distribution systems. Customers of Coca-Cola are generally very loyal, more loyal than the Pepsi customers. Coca-Cola also gains competitive advantage by excelling in their brand image (strategy). They invest a lot in marketing and brand awareness, (Coca-Cola is a lifestyle†).Another competitive advantage is the 400 licenses and patents on different formulas (ingredients Coca-Cola) and other drinks and brands which fall under the Coca-Cola Company. PepsiCo is also operating on a global basis. The competition between the two is heavy and just like Coca-Cola, Pepsi drinks are available in almost every nation, in almost every food and drink store. Although fulfilling a similar position as Coca-Cola in their market, PepsiCo has a rough opponent with Coca-Cola. The past several years, PepsiCo is not as profitable as before and has more and more trouble with competing with Coca-Cola, also because of the high investments of Coca-Cola in marketing. Therefore, their brand equity is developing negatively. Also PepsiCo’s intellectual property is great.Coca-Cola is more seen as a phenomena than a brand, and this is a competitive advantage for PepsiCo as well. Many establishments over the world offer Cola, and provide customers with PepsiCo mainly because this is less expensive. As already mentioned earlier, most people cannot distinguish Coca-Cola from PepsiCo, therefore gains PepsiCo competitive advantage at the expense of Coca-Cola. Human Capital The whole Coca-Cola Company has over 140,000 employees worldwide. Remarkable is that PepsiCo around the 30% greater workforce has, although their market share is considerably smaller. Unless the efficiency rate per employee of PepsiCo is much higher than that of Coca-Cola, this causes the company to have very large expenses in labour terms.To safeguard future long-term objectives, the companies both choose to keep a diverse workforce. Employees get relatively much responsibility (empowerment) and are encouraged, inspired and challenged to learn, be innovative, be original, and to promote themselves within the company. This creates extra value for both companies because employees are more loyal. Physical capital The physical capital of Coca-Cola is huge. The Company owns over many facilities in more than 200 countries worl dwide where the bottling, canning, syrup manufacturing, and administrative aspects are being dealt with. Only the bottlers where the products are manufactured and distributed mounts up to 275 facilities over the world.All those facilities are brought under five geographic operating segments (North America, Africa, Asia, Eurasia and the Middle East, and Latin America) and one corporate segment. The bottling partners are local companies, totally integrated and operating in line with their local markets. Also PepsiCo’s distribution system covers a wide range of certified bottlers, selling products in over 200 countries on six continents to businesses and institutions, including retail chains, supermarkets, restaurants, small neighbourhood grocers, sports and entertainment venues, schools and colleges, etc. 6. 1 Comparison Production These good resources ensure overall quality, flexibility and responsiveness in respect to local markets.They are integrated in their market worldwid e with continuous supply. Brand image and human capital are aspects which safeguards profitable future prospects with a sustainable competitive advantage. Both Coca-Cola and Pepsi have a massive amount of employees working for the company worldwide. This is also necessary because the employees contribute for a large part to business successes. Remarkable is the 30% greater workforce of PepsiCo. This is an alarming situation because the expenses of labour is large. Because they are both very successful and such immense companies, brand image, presence in geographical markets, distribution systems are all well-organised and difficult to compare.The end results of Coca-Cola in financial-, as well as non-financial aspect are better than those of PepsiCo on almost every terrain. 7. Research and Development How sustainable is PepsiCo? (Continuous improvement/New flavours) PepsiCo is a company with a wide variety of products and in all their market segments they are an A brand. When it com es to research and development you can see that PepsiCo is one of the best. They have multiple research and development facilities especially in the United States with many highly skilled scientists working there every day trying out new flavours and new products. The company even has its own university to train their staff.At this university which was opened in 2011 the scientist of PepsiCo receive training about 8 main items which are: packaging, Nutrition, Food Safety and Regulatory, Ingredient Application Science, Human Research and Science, Experience Design, Product Development and Process Engineering. They create new flavours every day and they launch a new flavour a couple times a year. They carefully create their flavours for specific markets so they meet the exact needs of the customers in that country. Another thing that PepsiCo strives to do is continuously improve their existing product and their existing processes. They do this for instance by giving training to their employees and giving their mangers goals to make sure they improve every year. How sustainable is the Coca-Cola Company? Continuous improvement/New flavours) Coca-Cola might not have as many R;D facilities as PepsiCo but their output of new products and new flavours is bigger than PepsiCo. This mostly caused by the fact that the Brand Coca-Cola is much more than just a brand. They also sell T-shirts and other product of their brand that they develop. Things like vending machines and packaging are things that Coca-Cola focuses on with their R;D while PepsiCo is more focussed on their product range. Coca-Cola is so settled as a brand that the most of their R;D is almost marketing. Like new cloth lines and new packaging for their products and off course new vending machines which will not only benefits the customers but also carries a message.Of course Coca-Cola Company also develops new flavours and new product they do this the same way as PepsiCo they look at the specific needs of th e inhabitants of a country and create a new flavour or product based on those needs. Coca-Cola also PepsiCo strives to do is continuously improve their existing product and their existing processes. They do this for instance by giving training to their employees and giving their mangers goals to make sure they improve every year. Does PepsiCo have a green vision? PepsiCo is fully committed to protecting the earth's natural resources through innovation and the efficient use of land, energy, water and packaging in all our operations.As a global business, they rely on the earth's natural resources. And as they grow, they strive to use only methods and tools that are, socially responsible and economically sound. PepsiCo has multiple categories where they are becoming more and more sustainable, the first category in which they have goals for improvement is water usage. PepsiCo's goal to improve water-use efficiency by 20 per cent per unit of production by 2015 . PepsiCo has already impro ved water-use efficiency by 18. 7 per cent for foods manufacturing, and 17. 8 per cent for beverage manufacturing. These conservation efforts translate to a water savings of nearly 13. 8 billion litres.Also waste management is very important for them. In 2010, PepsiCo generated an estimated 1. 25 million metric tons of solid waste from the manufacturing facilities. Of that total, only 15. 4 per cent was discarded to a landfill, and 84. 6 per cent of waste generated was sent off-site for beneficial use, such as recycling. In the future they are still looking to improve those numbers. Also they keep a close eye on their carbon emission. They have multiple on-going projects in many different countries that will help them decrease their Co2 emission and their effect on the global climate change. They have set 4 worldwide goals for their company. * Reduce carbon intensity in our operations Invest in carbon reduction technologies, including renewable fuel technology and clean development mechanisms * Reduce fugitive emissions * Work with supply-chain partners to reduce their emissions You can see that PepsiCo is company that has very sustainable supply chain and is still trying to improve their sustainability and decrease their emissions. Does the Coca-Cola Company have a green vision? Coca-Cola company is the largest beverage producer in the world and because of that they feel that they have responsibility to make the world a little bit better. They invest a huge amount of money in project on sustainability all over the world.Every year they also create a sustainability report about all they project and what they have achieved that year, also they describe their new project and they set goals for the coming year. In the figure to the right can be seen that they have created a visual concept of the Coca-Cola lifecycle which perfectly shows the way they work on their sustainability. 7. 1 Research and Development & Sustainability Both companies are constantly working on a better position in the market, improve the production and distribution processes, become more sustainable through innovation and participation onto the market. As it comes to sustainability PepsiCo is far behind on Coca-Cola even tough PepsiCo is already a very sustainable company Coca-Cola is really trying to make the world a better place.In total we can see that Coca-Cola is a more sustainable company than PepsiCo, and gives more back to the community. This is also one point why Coca-Cola is a brand which more people adore. 8. In Overall Although the Coca-Cola Company and PepsiCo seem to be quite similar in operating, distributing, production, marketing, and naturally the drinks themselves, they differ from each other on several aspects. Below, a table which gives an overview of important differences between the two competitors. | Strength| Weakness| Coca-Cola| 1. Over 500 brands in product line2. Strong global presence3. Excellent brand recognition4. Industry leader in marke t| 1. Negative publicity2. Supply is restricted3.Low profits in strong areas4. Decline in cash flow| Pepsi| 1. Company Image2. Quality Conscious3. Market Share4. Sponsorships| 1. Decline in taste2. Short term approach3. Weak distribution4. Low consumer knowledge| 9. Coca-Cola Company or PepsiCo We have seen all the strong and the weak points of both companies in all the analyses in this project. We have decided to go on with the Coca-Cola Company. This is mainly because of better financial position that Coca-Cola Company has over PepsiCo. Especially profitability and liquidity wise they have a much better position than PepsiCo does and we think this will be an advantage when we are going to write a business plan.PepsiCo also has a more diverse product mix than Coca-Cola because PepsiCo also has brands in markets like breakfast cereal and potato chips whereas Coco-Cola is only active in markets like soft drinks and sports drink where they have a lot of experience. We think that exper ience that they have because the specialized in drink markets only will be a huge advantage over PepsiCo when they are going to enter a new market. These are the two main differences between the very similar companies that made us decide that Coca-Cola Company is the better option to attack a new market. 10. 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