Coca cola vs Pepsi - introduction to business PDF

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COCA-COLA VS PEPSICO 1

Abstract These two companies are the largest producer of soft drinks in the world. These two companies started almost at the same time and now attracting customers with their different products. This essay will compare the financial performances and calculating the financial ratios of the two companies in their respective field and the end we will conclude that which company performing well by comparing their financial ratios.

Coca-Cola vs PepsiCo When we are talking about the soft drinks, we only have two products in our mind which are coca cola and Pepsi. These two companies are immensely popular in the whole world. These two companies largely appreciated products because of their quality and the service that they provide. Coca-Cola was started in 1886 when Atlanta pharmacist dr. John Pemberton created a soft drink in the neighboring pharmacy. He created a drinking syrup that contains carbonated that could be sold in the soda fountain. Dr. John Pemberton bookkeeper named this drink as “coca cola”. It is

COCA-COLA VS PEPSICO 2 surprising to note that the first dink was sold at only 5 cents per glass and only nine drinks were sold daily. But now the total selling of coca cola per day is $1.9 billion dollars and the net worth is $171.81 Billion.[ CITATION Coc \l 1033 ] The Pepsi Cola was invented in 1893 by a pharmacist Caleb Braham who was working in a drug store as a drink server. He mostly serves his own created soft drinks. He named one of his soft drink as “Pepsi cola” which became vastly popular in the coming decades. He sells his soft drinks in the neighboring stores and other ventures throughout North Carolina. To sell his Pepsi cola, he uses various tactics which include the hiring of biggest celebrities of that time. Barney Oldfield, a car racer, was hired by the Pepsi as their spokesperson. Now the net worth of Pepsi is $43.3 billion. [ CITATION Pep19 \l 1033 ] These both companies recognize as a big competitors of all time as said by PepsiCo Chief Financial Officer Hugh Johnston “The biggest challenge we’re facing is in colas right now”, “Competition clearly ramped up advertising on colas and we will do the same and have been doing the same and we’ll do more of it as they do.” Hugh Johnston[ CITATION For \l 1033 ] Evolution of the slogan In 1980, coca cola uses different forms of slogans on the bottle of coca cola such as “catch the wave” and beat the feeling but “always cool” was huge hit that featured a polar bear who looks innocent and mischievous. in January 2003, the latest slogan of coca cola was introduced which contains black and white image of coca cola written on the bottling. However, in 2009, coca cola unveiled open happiness campaign that was globally appreciated and boosted the sales of coca cola globally. Open happiness slogans were written in various place like in stores, on television, on billboards. This campaign was also promoted by various 90s songs which increased the popularity of this campaign.[ CITATION Coc \l 1033 ] The slogan of Pepsi Cola was first introduced in 1898. Pepsi had a red script logo on the bottle which continued till 1940. In 1906, Pepsi changes the design to text written on the red script. The topography changes with time. A time came when the topography become spherical in shape. The spherical shape of the slogan was a major success and this slogan is running till now. [ CITATION Des19 \l 1033 ]

Financial ratios (March 2019) Current ratio: coca cola current ratio for 3 months was 1.02 as their current assets were $28.54B and their current liabilities was $27.94B whereas the current ratio of PepsiCo is 0.94 in which the current assets was $17.92B and the current liabilities was $19.09B. Long term debt: coca cola long term debt ratio in the ending of March 2019 was 0.60 but it was 0.67 in the case of PepsiCo.

COCA-COLA VS PEPSICO 3 Debt equity ratio: the debt-equity ratio of coca cola was 2.2854 in March 2019 whereas the PepsiCo long term debt ratio was 2.2135. Gross margin: the gross margin for cocoa was 63.0525 whereas the gross margin of PepsiCo was 54.6698 for the same year. Operating margin: the operating margin for coca cola was27.3104 while the operating margin for PepsiCo was 15.6354. EBIT margins: the EBIT margin for coca cola was 27.3104 and EBIT margin for PepsiCo was 15.6354. Net profit margin: the net profit margin for coca cola was 20.1917, on the other hand, the net profit margin of PepsiCo was 19.3548. Asset turnover: the asset turnover for coca cola was 0.3828 whereas the asset turnover of PepsiCo was 0.8327. Inventory turnover ratio: the inventory turnover ratio for coca cola was 4.2552 and it was 9.3929 for PepsiCo. Receivable turnover: the receivable turnover of coca cola was 9.3804 while the receivable turnover for PepsiCo was 9.0536. Return of investment ratio: the ROI ration for cocoa was 15.1434 and the ROI ratio for PepsiCo was 29.2771. Free cash flow per share: the free cash flow per share of coca cola was 1.44464 for 2019 while the free cash flow per share for PepsiCo was 4.3979

Conclusion Both the companies are highly recognizable and a trusted brand in the whole world which guarantee high-quality products. Both brands have a highly unimaginable number of sales per year. They both are nearly a century old and have a large territory where they sold their products. Although Both have the same color, the taste is somewhat different. Pepsi is somewhat sweeter as compared to coca cola. Both the company is a tough competitor since when they start.

COCA-COLA VS PEPSICO 4 Moreover, if look at the financial status of both the companies, coca cola has a high demand for sales than PepsiCo. The turnover of coca cola is very high while Pepsi is not even near coca cola. To conclude we can say that coca cola is winning this race financially. coca cola may most likely convey the undeniably net addition, yet PepsiCo has been delivering more top-line salary than coca cola for a significant long time. coca cola is in a general sense a refreshment business, yet PepsiCo makes around half of its arrangements from sustenance brands, for instance, Doritos, and Quaker Foods. Soda pop arrangements declined for the twelfth consecutive a year as money related authorities have been going to separated water and other progressively gainful refreshments, an example that could impact coca cola more than PepsiCo.

References (2019, May 10). Retrieved from Designhill: https://www.designhill.com/design-blog/evolutionpepsi-logo-design-hundred-years/ Coca-Cola History │ World of Coca. (n.d.). Retrieved from Coca-Cola History │ World of Coca: https://www.worldofcoca-cola.com/about-us/coca-cola-history/ Fortune. (n.d.). Retrieved from Fortune: Coke vs. Pepsi: The Biggest Soda Rivalry in History Is in Full Swing Again PepsiCo, Inc. (2019, January 03). Retrieved from PepsiCo, Inc.: https://www.britannica.com/topic/PepsiCo-Inc...