Research Topics: Softdrink Industry

Managing Capability of Coca-Cola Company

Managing Capability of Coca-Cola Company Introduction Coca-Cola Company is involved in the distribution, marketing and manufacture of the nonalcoholic syrups and beverage concentrates worldwide. Its primary product is the coca-cola which is a type of carbonated soft drink that had been sold in restaurant, to the stores and to the vending machine to more those 200 countries and it is commonly known as Coke. The company is commonly offering still and sparkling beverages. The sparkling beverage that the company is offering includes ready to drink and yet nonalcoholic beverages with carbonation as the carbonated water, flavored water, and the energy drink. There are still beverages that includes the nonalcoholic beverages and without the carbonation which includes the non-carbonated water, flavored water, teas, juice drinks, and the enhanced water. The company is also offering the fountain syrup, concentrates, and syrups which include the sweeteners and the ingredients. It also markets its nonalcoholic beverages under the Sprite, the Diet Coke, Fanta, and the Coca-Cola. The company usually sells its finished beverage products to the distributors and the canning and bottling operators, fountain wholesaler, and the distributors. The company had founded in 1886 and it is mainly base in Atlanta Georgia (Yahoo Finance, 2008). The company’s mission is for the refreshment of the world in not just the body but for the heart and spirit well. It also wants to inspire optimism with the aide of the actions and brands, and to create the value which can make difference in engaging everyone. The company’s vision is for the people to have the great work and to make a difference by being a responsible citizen. It also forecasted of anticipating and satisfying the beverage brand in the needs and desires of the people while winning and nurturing the mutual loyalty of the people. The company is also optimistic in maximizing its return to the shareowners while being aware to their entire responsibilities. In this regard, the company is aware of their values which are having the courage in shaping the future and being committed by the mind and the heart. There are also values of being real as their integrity and open for collaboration. The company is also aware of innovation and most importantly their main focus is the quality of the entire company (Coco-Cola Company Corporate Site, 2008).    Strategic Capability of Coca-Cola Company Strategic capability is being able to think imaginatively regarding the direction of the organization or the part of the organization might go. This is usually concerned in taking for the long term view of the organization or what will be the future of the organization for its continuing success. As defined by Rosemary Harrison, the strategic capability is involve in choosing for the most of the appropriate long run goals, vision, and the objectives for the enterprise. This is also involves in managing and determining the allocation and courses of action which are necessary in achieving the goals. This strategy also ensures and selects the strategic development assets for the assurance of the continued business profitability. In this manner, this organizational strategic capability mainly depends to the ability of the managers (Armstrong, 2004, p. 176). Going Global – this is the major strategic capability that Coca Cola Company had done in diversifying its business. In this regards, to be one of the multi-nationals company that operates globally, it means that the have the only real global players in the global level. The shift in the global power will be the adaptive capacity of the company which had offered. According to the CEO and Chairman of Coca-Coca Company, there are four forces that prevail in global into global move. These include the desire for the determination, the outstanding democratic capitalism, the success of the institution, and the influence of the regulation investment. These factors must meet the needs of the people. In this manner, the company manager believes that this shift can lead to the better future of the company (Rosenau, 1997, p. 444). In this global strategy, the company had face circumstances when bringing the American product to the world which can lead to the disaster for the company. This move can lead to the imperialism and colonialism for the other country that can wage for the American corporation in threatening the homogenous entity. In these scenarios, the company begun to think of the strategy that will support by most of the consumers around the globe and that was to localize the product. This going native move can tailored the drinks in every individual country. This had also been parted down by CEO Douglas Draft which can recognized the demand in breaking the traditional way of service and expand the product line of the company beyond the carbonated drinks. Draft had learned in shifting the line of products of the company as in the teas, juices and waters so that coca cola can be more responsive in the local markets. The “think local, act local” motivates Draft in diversifying the business and goes into the flow of innovation. The strategy also lead to the satisfying the consumer’s choice and wants in meeting the competition from the juices, sport drink and to the water. In the said move, for the year 2001 alone, the company made 15 new drinks for the entire 45 Asian markets and the localization can be the key for engaging into diversification and to the emergent marketplace. In this global invasion, the company had recognize its products not just for American product but for the localize product as well. This also led of having the higher income return and can make the business to be globally competitive for the long term manner. The other strategic capability of the company manger is innovation for the products, the acquisition and emerging, and better marketing (Amis and Cornwell, 2005, p. 73-75). The company’s benchmarks are to have the competition in the greater market and to have a market of globalization with the reduction of entry barriers. It has also benchmarks on labor productivity     The Resources of Coca-Cola Company             a. Value The company also owned 33 operated beverage concentrate and syrup manufacturing plants which are located in the entire world. It has also hold majority interests under the accounting rules of 34 operations and 80 primary beverage canning and bottling plants which are located outside the United States. The company has also 4 facilities of bottled water and leases also the same facility to United States. The company also owned the Fifth Avenue in New York which has approximately 315,000 square feet. The other additional leased and owned real estate in the whole world are using by the company in bottling operations, to office space, retail operations to the warehouse. The management is optimistic that the facilities are enough to the production and can utilize to the past experience. On the other hand, they are also open for the additional facilities and personnel as needed for the expansion. The company also generates income, revenues, and cash flow through selling and manufacturing the beverage syrups and concentrates and some of the finished goods (Coca-Cola Company Corporate Site, 2008).             b. Robustness Including in the tangible assets of the company are the authorized canners and bottlers that had been combined by the syrup and to the concentrated sweeteners so that it will have to produce soft drinks. The soft drink which had been finished are packaged to the authorized containers that had bears its trademarks as the cans and the refillable and nonrefillable plastic and glass bottles which followed in selling to the retailers. The major materials of the business of the company are non-nutritive and nutritive sweeteners. It has also no experience of any difficulties in acquiring the nutritive sweeteners. The high fructose corn syrup had purchase with the assistance of the Coca-Cola Bottler’s Sales & Services Company. In general, the raw materials are available readily from the numerous sources which is also the reason for the company of not to experience any trouble in obtaining the sweeteners. This will build the strong foundation of the company in achieving its goals and in competing globally.                        c. Parity Coca-cola is an active member of business community which works personally to the local individuals, governments, and merchants in order to improve the prosperity and health of the local environment and economy. The company also has the responsible marketing that can recognize about the concern of the nutrition of the child which is a global policy. The company also supports the schools in the communities which can help in encouraging the students to have healthy lifestyle. d. Non- Substitutability The company’s intangibles are the trademarks which are being annually tested and determined so that it can have the indefinite useful. The trademark is also unique for the company and can also serve as one of its key competencies. The goodwill and impairment value are measured which includes the analysis of cash flow, independent appraisal and the estimation of the sales of proceeds where  the company had been recorded million of intangible assets in the year 2005 and are being related to the trademarks sold in the Philippines. In 2004 the company charges of related intangible assets of 4 million that relates to the franchise of CCEAG of the operating segment of European Union (Ibid).     The Threshold Capabilities of Coca-Cola From the start the Coca-Cola Company had been planted its brand name in its own field and built its brand image with dignity and integrity. From the history, it rebound the greatest racial discrimination in the U.S. law suit and had reinvented it image to become the leader of national diversity. It had also built its certain and sustainable commitment for the people, to the countries and to the world. The Coca-Cola Company also has the unbiased retention of in both the management and to the work force. This means that the retention is across to all level of races and there is no discrimination occurs and simply the leader of Human Capital. Traditionally, the company has the anchor bottlers that are efficiently well-capitalized and large firm to the committed growth of Coca-Cola. These are also been demonstrated to the Coca-Cola by having the team of strong management with the capability of managing the operations of bottling to one or more countries. These are also been provided benefits financing growth of the company which takes the equity of the firm (Rothacher, 2004, p. 77). The creation of the limited liability company with partner to P&G can have the state-of the art capabilities for the company’s international merchandising, distribution, and customer marketing. The innovation of the new products and nutritional beverages can strengthen the creation of creation better products to the company (Mourdoukoutas and Papadimitriou, 2002, p. 144). This only shows that the company is not afraid in trying to diversify and innovate its products to meet the international standard.     The Core Competencies of Coca-Cola Company The company had recorded it brand for continuous diversification and enriching its products in the international market. In this case the company has the certain key competencies over which are the primary factors in it continuing to compete in the global market. First and foremost, it has excellent promotional strategy as creating many souvenirs for its customers and very appealing advertisement. Regarding the taste, it is widely accepted by customers because of its uniqueness. The secret formula for production is the asset of the company but most of its imitators failed to in providing the same taste as of Coca-Cola. The company usually has the contracts with the big restaurant as McDonald and it has also broad coverage. It has also the diversified production line of products for the customers’ wide options. As compared to its major competitor Pepsi, the market share of Coca-Cola is much higher that implies that most of the customers prefer Coke as their drinks. The company also itself to the partnership with the meaningful organizations as the UNAIDS, or the United Nations agency that fighting against AIDS and HIV that gave much impressions from the public wherein most of the consumers are purchasing the products. The Coca-Cola products has reasonable prices which can accepted by most of the lower and middle class people and easily purchase in many place as in the schools and in the supermarket (Essay Info, n.d.).   The Value Chain Analysis for Coca-Cola Company The suppliers are the partners of the company that supplies the system with the materials which includes the packaging, the ingredients, goods and services and machinery. All of the direct and authorized suppliers need to comply with all of the respected regulations and laws which include the forced labor, the child labor, freedom of association, abuse of labor, and the collective bargaining. This means that all of the agreements with the suppliers are required to comply with the Supplier Guiding Principles. The customer of the company includes the large international chains of restaurants and retailers which includes the independent businesses. Some of the customers are the major corporation which has the name as familiar to Coca-Cola and others are the local pushcart vendor and the corner market. The company is open for all types of customers which can help them n growing the customer’s business and in return the company’s growth. The company serves its customers trough the aid of the team of account management that can provide them tailored and services their needs. In the Europe, Africa, and North America, there are Coca-Cola Retailing Councils that provides the research regarding the issues that affects the retail of the industry. Through the increase complication of the retail environment, the company works to the customers for the improvement of the marketing shopper and to the collaboration of the supply chain which needs for the requirements in the acceleration of the innovation so that it can provide highly selected options on the line of beverages for every customer and to every shopping trip. The company provides the support for the smaller customer in helping them to grow its business more profitable and efficient. The company also works with the customers so that they can broaden the range of the beverages they are offering and can ensure the beverage responsible market (Ibid).   Assessing the Performance of Coca-Cola Through the use of the balance scorecard, the performance of Coca-Cola can be measured as:                     In this regard, through the managing capability of the board of managers, their financial perspectives are measured through the aide of its operating income, economic value, added and the return of capital employed. The customer perspective is measured with the retention of the customer and their satisfaction as well as the market share to the segment which is being targeted. The business process can measure through the quality, cost, and throughput. The growth and learning are assessed with the satisfaction of the employees of Coca-Coca Company, their skill sets and others.   The Contribution of the Manager in the Company In any business, the manager is the one that controls the movement of the business and its foundation. For the Coca-Cola Company, the manger made possible is managing the investment and the flow of the budget as well as the product proper selection of the strategic movement that had done in the diversification process. It is also the one that had responsible in oversaw the entire operations of the company around the globe. The board of management or most specially the managers are the people who oversaw the interest for the long-term health as well as the overall success of the financial strength and financial business of Coca-Coca Company. The board of managers also served for the major decision making body of the company. Behind the success of the company are the board of directors and their management capabilities in order for the company to have the sustainable growth. This new milestone growth had led by the managers’ idea on the revitalization of the trademark of Coca-Cola. There are also exciting joint ventures and acquisitions which led to the betterment of the string financial status of the company. The group of the managers also made moves to their product innovations which can lead to marketing initiative that resulted to the increase number of sales for the past years. The new partnership is also one of the reasons that advance the global citizenship of the company. The increase earnings of the Coca-Cola Company to .57 per share or 19 percent for 2007 and .9 billion or grew of 20 percent of its revenues was made by the strengthening of the sparkling portfolio of the company in its new brands while expanding the still portfolio with the innovation and acquisition made by the board. Aside from those cited above, the company managers are also the one who thought for the improvement of the consumer marketing capabilities, the franchise leadership and the commercial leadership. The creation of the more sustainable future with the aide of the effective energy, operational practices and water are also the key factors from the managers’ effort to the company’s success. Regarding the future plans of the company, the board executed five major strategies as the growth for the sparkling beverage leadership, the leverage balances geographical portfolio, the rapid growth of still beverage, the strengthening of the capabilities of Coca-Cola System, and the acceleration of the global innovation pipeline (Coca-Cola Company Corporate Site, 2008).   Conclusion The management capabilities of the managers of Coca-Cola Company are the key competencies of the company in going to the peak of their success. In line with this, these abilities of the management led to the long term effect of the company that had put it on the top. These holds true for the greatest asset of the company which are the experienced and talented people all over the world. This also indicates that the ultimate goal of the company is to create lasting and stronger performance. Due to these management capabilities, the company is expected to have a long term success by have the immense opportunities. The company is expected to have the growth in the economy and it can be 0 billion in it total revenue. This means that the company is aware that there are many opportunities existing and awaiting for them. The management capability is the foundation of all of the success of the Coca-Cola Company which brought the company to diversify globally and to be internationally which until know has experiencing by the company. Bibliography Amis, J and Cornwell, B 2005, Global Sport Sponsorship, Berg Publisher, United Kingdom. Armstrong , M 2004, How to be an Even Better Manager, Kogan Page, United Kingdom. Coca-Cola Company 2008, Yahoo Finance, viewed 23 April, 2008, http://finance.yahoo.com/q/pr?s=KO. Coca-Cola SWOT n.d., Essay Info, viewed 23 April, 2008, http://essayinfo.com/sample/essay/914/2/ Coca-Cola Company 2008, Coca-Cola Company Corporate Site, viewed 23 April, 2008, http://www.thecoca-colacompany.com/. Mourdoukoutas, P and Papadimitriou, S 2002, Nurturing Entrepreneurship: Institution and Policies, Greenwood Publishing Group, USA. Rosenau, J 1997, Along the Domestic-foreign Frontier: Exploring Governance in a Turbulent World, Cambridge University Press, United Kingdom. Rothacher, A 2004, Corporate Cultures and Global Brands, World, Scientific, New York.     Credit:ivythesis.typepad.com

Managing Capability of Coca-Cola Company

Managing Capability of Coca-Cola Company Introduction Coca-Cola Company is involved in the distribution, marketing and manufacture of th...

Research Paper on Financial Management of Coca Cola

Financial Management of Coca Cola Introduction The Coca Cola Company is involved in the distribution, manufacture, and marketing of the non-alcoholic concentrates of beverages and syrups worldwide. It is also offering the still and sparkling beverages. Its sparkling beverages include the ready-to-drink beverages with the carbonation of the carbonated waters and energy drinks with the flavored waters also. For its still beverages, its covers the non-alcoholic beverages without the carbonation, the flavored waters, the enhanced waters, and the non-carbonated beverages. The Coca-Cola Company also offers the different fountain syrups and concentrates syrups. It brand names marketing includes the Coca-Cola, Diet Coke, Sprite and Fanta. The company was founded in the year 1886 which had headquartered on Atlanta Georgia (Coca Cola Company Corporate Website, 2008). The company’s finished beverages products that bear its trademark can be sold into more than 200 countries with the eight segments in the whole world. The company had also been completed the acquisition of the Energy Brands, Inc., and the numerous range of water products. For the past performance of the Coke, it can be determined that it is indeed an excellent firm for having the outstanding products, management, earning, and marketing. In order to have the better overview on this company, it is important to determine and analyze its financial management to see its development (Modern Graham, 2008).   Aims and Purpose Understanding the financial management of Coca Cola Company can give the overview for the processes and component that had been involved in the financial administration of the company. This has also the aims of determining the process of managing the money and the income of he flows that are associated with the side of business. This can also justified the assurance for the company and its sufficient funds that are availably needed, used in acquisition for resources, and its maintenance. This can also have to determine the Coca Cola Company and its economic productivity and efficiency. This can also be sued by the investors by the investors as a guide for the possible investment in the company and for the future reference for the financial aspect of Coca Cola Company.   Literature Review Since the company is considered to be one of the Multi National Companies, then its financial resources and management are widely used. The first is the cost of goods that covers the amount of money for Coca Cola in making the syrups and concentrates for the soft drinks. For the second quarter of 2002 it recorded to have .9 billion which rose for almost 0 million for the previous year. This only shows that the cost of the soft drinks rose faster as compared to sales due to charging of the supplies for the cost ingredients in making soft drinks. For the gross profit of the company which is one of the financial management methods, it is only measured by the sales minus the cost of production of the product. For the Coca Cola Company in the 2nd quarter of the Selling, general and administrative expenses or (SG&A) has the amount of .8 billion as 14.6% up from the past 1 year. The company has also the revenues which rose that are faster than its SG&A expenses. This only indicates that the company is tightening its belt in the entire expenses that he control which includes the pay and travel. This can also signifies that the cost produce by all of the soft drinks is fast as compared to the increase sales of the company and means that the company is receiving the price hikes from the suppliers. Through taking the sales, the revenue and less cost of the SG&A and goods expenses, the operating income can be calculated. This can give the business reporter the indication for the performance of the company’s core business. For the case of the operating of Coca-Cola, it increased 9.2% for the second quarter of 2002 as it compared for the past year. This is also less than the sales, the growth, and the increase of the sold goods. The earnings before taxes can be determined by adding as well as subtracting the expense and income and the income losses for the investment. The Coca-Cola Company had recorded the net income of only .3billion which is a gain of 15.4% above the figure of net income that reported in the past year. This can also break down to arrived at the net per share or EPS in order to show every outstanding stock with the company’s recorded EPS of 52 cents per share figure. The company also rose for about 15 percent in the second –quarter of 2002 due to the strong and new products sales in Asia and North America that had overcame the decrease economies in the other markets. According to the brand analysts, the stock of the company fell for about 37 cents with the per share whereas the investors questioned for the many volumes of the Coke that came from the juice brand’s lower margin. The asset less their depreciation can be totaled for .3 billion in the said quarter which is an increase of billion in the assets for the company. This can be seen as impressive, it is also smart in finding for the falling and rising of the assets. The Coca-Cola Company also made the increase in the long-term debt due to the acquisition of bottler (Roush, 2004).    Research Investigations The analysis for the financial statement of Coca Cola had been starting the year 2000. Based on the financial analysis made, it showed that that there is a declination for the total asset for the year 2000 which is 3.65% as compared in the year 1999. The asset structure and the governing segment has only decreased by 1.69% in the in the investment as well the in the tangible and intangible assets. The current ratio has the increase for about the six percent starting and currently contributing for the extension in the 30 percent of the total assets. The receivables and inventories declines for having the non-significant fraction while the equivalent and cash rise for 2.2 percent. Due to the stated dilemmas in the declination of the asset, there were adjustments that can cause the diminutive effects of the company’s structure. In the same year, the increase in the ratio had also increase fro about 0.7 percent because of the equity reduction o r the income loss. The long term debt and the total capital have also improved 0.5 percent due to the impact of high increase in the short-term liabilities. For the company’s liquidity, the current ratio that measures he ability of the company has the increased of 4.3% n the year 2000. There is also the other important factor to consider as the decrease in the dynamic liquidity of 1.2. For its profitability and efficiency, the sales revenues also increased by 3.3 percent which is moderate decrease in operating profit and to the profit before tax which is 1.1%. The inventory turnover increase for 4.3% while the ROA and ROE had decrease for 7.9 and 9 percent for the order within the inventory efficiency. For its EPS, it fell for 10.2 percent in the same year and suggesting the likelihood for the gaining profit by the shares of investment and most likely will increase in the short-term liabilities with the slow growth pace. With regards to the cash flow of the company, it can be known that during this year, have no experience in the restructuring for the past year. This only shows that it has the stable figures and is presented in the cash flow chart. Although the figures are having almost the same, they still have the tendencies that it was most likely the interest and intentions of the company. In general, for the year 2000, the Coca Cola Company has no experience of extreme changes apart from short-term liabilities which has considerable increase. To be on market for the past decades, these changes cannot affect for the short-term run due to the fact that it already built the good reputation. Additionally, it also lived up to the expectations on showing off for the good results every year. Nevertheless, it is also obvious these are for the time of changes whereas the different strategies need to consider and implemented. Currently, the company is looking for the right direction by improving the different segments (ECheat, 2007). After 8 years of business production, the first quarter of the report of Coca Cola Company can be analyzed. For the first quarter of the year 2008, EPS had increased of 20 percent or .64 as compared to the previous year right after the consideration of the impact of the comparability. For the worldwide volume of the case had reach for 6 percent for this first quarter and into the international unit case volume which had reached fro about 7 percent. There had also recorded the strong cash generation with the operational increase of 18 percent. The company had begun the year with success which has the solid quarter for the consistent and overriding objective for the creation of long-term sustainable growth. The success of the system of company is the execution of the strategies from the beverage innovation for the effective execution for the sale point and to continue growth drive. Additionally, there is also a balance growth that proves the ability in managing the time and geographies for delivering the results (Coca Cola Company Corporate Website, 2008). The net operating revenue of the Coca Cola for the forts quarter of this year had increase by 21 percent. The company’s revenue growth only reflects for the 5 percent in the increase for the concentrate sales and the 5 percent for the increase in the structural change due to the relations of bottlers’ acquisition as well as the 9 percent and 2 percent of the currency and pricing mix, respectively. There was also 18 percent in the increase for cash for operation as compared to the previous year which records .1 billion. The company also repurchased its stocks for 9 million in the said quarter and expected to repurchase it for .5 to .0 billion in the stocks for the full year for about .5 and up to .0 billion. There are also the approved annual increased of the dividends that can risen for 12 percent starting 2007.   Conclusion Based on the aforementioned finding and figure, it cannot be denied that Coca Cola Company is considered to be one of the strongest multinational companies worldwide. It also determined that the international business had been once again led the way with the sparkling and still beverage which contributes in the ample results. This only recognized that there are still more workings that need to be done for the continuing success of the company which is the North America as special mention for its challenging economic environment. This only proves that the company is still optimistic regarding its progress and it can continue to remain to be committed for the development and improvement of the execution of the strategies.     Recommendation For recommendations to the Coca Cola Company, albeit the facing of the difficult macroeconomic circumstances, the success can be continually gain and achieved if there is a continuous collaboration with the bottling partners. Aside from that, it can also maintain if there is maintenance for the unrelenting focus in the integrated consumer marketing, franchise and commercial leadership. It is also important to leverage the strategic acquisition and leading brands for building the innovation for its pipeline through the productivity driving. There should also be more excellent management financially for the company with existing cultures of the foods.   Bibliography The Coca-Cola Company Reports First Quarter 2008 Results 2008, Market Watch, viewed 12 June, 2008, http://www.marketwatch.com/news/story/coca-cola-company-reports-first-quarter/story.aspx?guid={610BBF9F-F5E6-4426-B277-DA46C392E419}&dist=TQP_Mod_pressN. Financial Statement Analysis of Coca-Cola 2002, Echeat, viewed 12 June, 2008, http://www.echeat.com/essay.php?t=29450. Roush, C 2004, Show Me the Money: Writing Business and Economics Stories For Mass Communication, Routledge, United Kingdom.  Valuation: Coca-Cola Company 2007, Modern Graham, viewed 12 June, 2008, http://www.moderngraham.com/?p=238. Coca Cola Company Corporate Website 2008, Coca Cola Company, viewed 12 June, 2008, http://www.thecoca-colacompany.com/.       Credit:ivythesis.typepad.com

Research Paper on Financial Management of Coca Cola

Financial Management of Coca Cola Introduction The Coca Cola Company is involved in the distribution, manufacture, and marketing of the...

Financial Analysis of PepsiCo Company

Financial Analysis of PepsiCo Company Introduction The PepsiCo is the leader in the whole for the distribution and production foods, snacks, and beverages which has the total revenue of billion as well as having the total employees of 185, 000 employees. The company consists of PepsiCo Americas Beverage, PepsiCo Americas Foods, and PepsiCo International (PepsiCo Corporate Website, 2008). The PepsiCo’s measurement for its financial statement is the aide of the significant relationships as well as the identification for the changes and the existing trends. Most of the broadly used techniques which adopted by the company are dollar and percentage changes, the ration as it expresses to the relationship f the financial statement for the competitor, the components percentage and the trend percentage. There is also the accompaniment for the comparison of the company’s past performance and to the industry standard (Williams, et. al, 2008, p.632).     Ratios The financial ratios are significant in the analyzation of the financial statement because of the permission in comparing the information and the financial statement for the other company’s financial statement. In this case, the PepsiCo Company’s Ratios are interpreted in the benchmark for its ultimate competitor which is the Coca Cola Company.             The PepsiCo has the ratio of 89.80 percent for the current liabilities as was compared to its current assets. The company has also the 22.3 % P/E ratio for 2007 with 18.7% in the year 2006 which signifies that is profitable this year as compared to the last year. The company has also the Price/Book ratio of 7.1 in the year 2007 and 6.7 for the previous year. Its price/sales ration had reached for 3.2% as compared to last years’ 3.0 which signifies huge sales. It cash flow sales to its prices is 18.2 as compared to 17.2 which only reflects that the company is doing its best to allocate much resources and achieve its goal (Quick Take, 2008). It has also the PE ratio of 16.2 for the current year with the dividend yield of 2.5 %. The company also has the 4.34B increase for the year 2007 to previous year which reflects the 10.99% of the net sales/revenue ratio. This signifies that it has the huge gross profit of 10.13% for the two consecutive years (Google Finance, 2008).             In order to compare the financial ratio of PepsiCo to its competitor, it is only important to use one of its major competitors as the Coca Coca Company. The Coca Cola Company has the current asset and the current liabilities estimated ratio of 0.91 or 91 percent higher in its current liabilities vs. the current asset for the year 2007 vs. 2006. This figure only signifies that the Coca-Cola is still a little bit profitable for having 25.1% as the operating margin which is better as compared to the Pepsi which has only 18.2%. The company also has the 0.94 or the 94% higher to its liabilities as it compared to current assets. Additionally, the company also has the earnings per share of 19 percent vs. the .16 for the year 2006 and to the .57 for the year 2007. On the price to earnings ratio analysis, the company has the actual PE Ratio of 19.72 and the previous year was recorded of having 19. The dividend yield of the company is 2.58% for the year 2007 (Coca-Cola Corporate Website, 2008).   Trend Percentage The trend percentage is commonly use fro analyzing the changes in the items in the financial statement that starts from the base year and to the upcoming year so that it can show the direction of the changes (Williams, et. al, 2008, p. 634). The trend percentage for PepsiCo is given below: The PepsiCo (In million $) 2007 2006 2005 Sales 39,474 35,137 32,562 Net Income 5,658 5,642 4,212 Trend Percentages     Sales 121.23% 107.91% 100% Net Income 134.33% 133.95% 100%                     Source: PepsiCo. Website, 2008   The trend percentages for PepsiCo in the year 2005-2007 implies the humble growth in the sales for the past two years which also reflects its accelerations that is happening in the growth for the past two years with 2005 as the base year. With regards to the net income, it shows the significant increase in the growth trend for the past two years with the sudden increase for the year 2006. Generally, the trend for the percentages will give for the broader picture for the growing yet profitable company.     Dollar and Percentage Changes The dollar change is useful sue to the measure for the value of currency into the other. On the other hand, the percentage change can be value of the foreign currency.  This dollar and percentage changes is given below:         Increase or (Decrease)           2007 over 2006 2006 over 2007 The PepsiCo. (In million $) 2007 2006 2005 Amount % Amount % Sales 39,474 35,137 32,562 4,337 10.99 2,575 7.91 Net Income 5,658 5,642 4,212 16 0.28 1,430 33.95 Source: PepsiCo Website, 2008             The positive changes for the percentage trend of the company signify that the PepsiCo indicates that it is appreciated in the past two years. The increase for the percentage in the year 2007 can be due to the inflation rate. It also reflects that the company had been successful in the past two years upon the increase in its operating income. Component Percentages The components percentages are the relative sizes that are included as the total.         Components Percentage The PepsiCo (In million $) 2007 2006 2005 2007 2006 Net Sales 39,474 35,137 32,562 100% 100% Cost of Goods Sales 18,038 15,762 13,406 45.70 44.86 Expenses 14,208 12,774 10,299 35.99 36.34 Net Income 5,658 5,642 4,212 14.33% 16.05% Source: PepsiCo. Website, 2008   In the component percentages, there is huge evidence for the increase in the sold cost of goods which are primarily 44.86 to 45.70 which was part of the offset only to the partial decrease of expenses of 0.35% into the net sales which was the result for the decrease of the net income for about 1.72%.   Bibliography Williams, J et al 2008, Financial Accounting, McGraw Hill/Irwin, New York. Financial Ratios of PepsiCo, Inc 2008, Quick Take, viewed 17 September, 2008, http://quicktake.morningstar.com/stocknet/Valuation10.aspx?Country=USA&Symbol=PEP. Pepsi Co. Inc. 2008, Google Finance, viewed 17 September, 2008, http://finance.google.com/finance?q=NYSE%3APEP. Coca-Cola Corporate Website 2008, Coca Cola, viewed 17 September, 2008, http://www.thecoca-colacompany.com/ourcompany/index.html. PepsiCo Corporate Website 2008, Pepsi Co, viewed 17 September, 2008, http://www.pepsico.com/     Credit:ivythesis.typepad.com

Financial Analysis of PepsiCo Company

Financial Analysis of PepsiCo Company Introduction The PepsiCo is the leader in the whole for the distribution and production foods, sna...

COCA-COLA AS AN INNOVATIVE COMPANY

COCA-COLA AS AN INNOVATIVE COMPANY   Executive Summary   Coca-Cola fully understands the meaning of innovation as evidenced by the ever-growing brand portfolio and internal processes. In this paper, I discussed Coke’s three cola strategy as both a product and service innovation. Such strategy was implemented to widen the market presence of Classic Coke, Diet Coke and Coke Zero. The three cola strategy was developed initially for the purpose of rekindling the growth of the sparkling beverages. The strategy is basically a campaign to boost public confidence wherein an array of marketing, advertising and promotion was implemented. The three cola strategy was backed by Research Council towards the development of consumer-centered innovation.   Coca-Cola Company             Founded by Asa Griggs Candler in 1882 in Atlanta, Georgia, a company that fully understands the importance of innovation in business is the Coca-Cola Company. Coca-Cola, or simply Coke, chose to concentrate their operation on production of softdrink syrup while maintaining an intimately relationships with its bottlers and distributors at the retail level. Basically, the company is engaged into blending raw material ingredients (product planning), packaging in plastic canisters (market research) and shipping to bottlers (advertising). In 1886, John Stith Pemberton invented the company’s flagship product Coca-Cola. Today, Coca-Cola Company offers more than 400 brands in over 200 countries and territories and serves approximately 1.5 billion servings daily.               The Coca-Cola Company manufactures the concentrates, beverage bases and syrups that bring uniqueness in the products and sell them to its 300 bottling companies. Bottling partners serve as the producers and distributors of the brands and the main connectors between the customers and the company. Bottling partners range from international and publicly-traded business to small, family-owned operations. They are responsible for producing, packaging, distributing and merchandising the brands through localized marketing plans that are developed in partnership with Coke. Along with the bottling partners are 90, 500 associates and over 200 million customers that makes the Coca-Cola System. Such system has been the key to operate in the global scale while maintaining the local approach.               With the support of Beverage Science and Innovation, Coca-Cola commits in continuously looking for new beverages that will bring enjoyment to the public. The company ventured into juice drinks, energy drinks, sports drinks, functional drinks and ready-to-drink coffee and tea among others. In fact, the company had introduced at least 29 new lines of products from October 2004-August 2007 alone. Nevertheless, Coca-Cola recently rolled out the tree-cola strategy consisting of reinvigoration of the trademark Coca-Cola and Diet Coke and introduction of Coca-Cola Zero to increase the portfolio of the company.   Three cola strategy             Coca-Cola Company is well aware that sparkling beverages are the life of the company as well as the industry. A fact is that in the last decade Coca-Cola’s operational and financial performance has dwindled. According to Strategic Direction (2006), Coca-Cola’s core market is increasingly difficult to please and senior managers are not confident or quick-moving enough in their strategies to reach them. Through a confident approach, the company remedied the dilemma via extensive product strategies hence the three-cola strategy. As both a product and service innovation, such a strategy is an effort to rekindle growth in sparkling beverages, focusing on driving unit case volume growth for Coca-Cola, Coca-Cola Zero and Diet Coke or Coca-Cola light (Bokaie, 2007).               Since the Coke portfolio is driving the growth, and disparity, in the colas segment, the company had realized for deeper integration in marketing and merchandising specially the three brands. In 2007, the Coke Side of Life creative platform was used to make the people aware of the ‘specialness’ of the iconic Coke brands. Marketing strategies not only focus on the brands themselves but also on seasonal summer and Christmas peaks through global creative advert and extensive digital activities (Coca-Cola online, 2008).   There are also limited flavors that had been offered in the market following the success of Coca-Cola with lime and the fusion of two bets citrus flavors lemon and lime or the Diet Coke Citrus Zest. For this products and Coke Zero, the Coca-Cola system allotted sampling campaigns in different experiential locations like sporting events and train stations and investing on high-end advertising such as heavy-weight TV, cinema, billboards and prints (Trade Support, 2006). Further, the company rolled out Coca-Cola Zero in 37 countries in 2007 and it became one of the Company’s billion-dollar brands since then. Coke Zero is believed to have regained the public confidence on sparkling beverages while also generating great interest from new consumers. There are about 450 million cases of Coke Zero sold in 2007.   The three cola strategy is also responsible for achieving all-time highest rates. For instance, it was known that sparkling beverages have no growth potential in Japan but the three-cola strategy proved this wrong as the Trademark Coke achieved its highest growth rate in 30 years. Brand Coca-Cola volume was increased by 3% and Coke Zero grew over 250% in 2007 and had penetrated over 80 markets in the first quarter of 2008. In markets where both Diet Coke and Coke Zero are inexistence, the combined diets and lights category grew by 8% in 2007 (Coca-Cola online, 2007).               PepsiCo, the perennial rival of Coke, is recently pursuing the same strategy through spontaneously introducing Diet Pepsi, Pepsi Max and Diet Pepsi Max along with the reinvigoration of basic Pepsi brand (Trout, 2007). Coke and Pepsi are responsible for the emergence of the duopoly in the softdrinks industry dubbed as the Cola war. The difference, however, is that Coca-Cola’s product innovation is embedded on health and wellness initiatives by means of increasing both light carbonated soft drinks and non-carbonated beverages.   Three cola strategy as both product and service innovation             In generating high impact innovations, it is important that the organization should devise a systematic method of identifying opportunities that provide new value for the consumers (Johnston and Bate, 2003). What Coca-Cola Company did was to be continually on the offensive wherein the company purports in marketing unique brands, generating identity-preserved products and combining collective efforts. Coke regarded the three cola strategy as a value-adding service to the consumer at the retail level.               The desire to innovate must also come with the company’s top leadership and permeate every corner of the organization (Paley, 2006). This is what CEO Naville Isdell did when he entered the company. Prior to the introduction of the three-cola strategy, the sales of Trademark Coke were seriously declining in the world’s most established markets. Isdell argued that the way forward is through its core products which are mainly carbonated. Because the Company had its share of criticisms targeting the healthiness of the products, Coke, as a product innovation, reintroduced the Diet line and coupled it with Coke Zero in a collective effort (Stanford, 2007).               As such, the changing consumer preference for healthier food products was an opportunity that is exploited through the three cola strategy (Paley, 2006). The Coca-Cola Company searched for changes and respond to it as a true innovative company should do. Edersheim and Drucker (2007) argued that the mismatch between supply and demand in the market is a powerful tool for innovation. It includes unforeseen successes and failure inside the organization and unexpected activities at suppliers, competitors, customers and complementors.               Innovation also means to tolerate internal processes especially those that will contribute to the growth of the company (Johnson and Scholes, 2002). Coca-Cola has Research Councils which conduct different studies on issues that could possible assist retailers to respond to the ever-changing marketplace. According to the company, the unique value of these activities is vested on the fact that retailers define the objective, the scope of each project and own the process after it was released and disseminated to the broader retail community. Listening to the voice of consumer (VOC) is one of the critical aspects of innovation especially because it is difficult to take risks without a clear foundation (Harvey and Brown, 2006).               It is important for Coke to improve productivity while aligning product strategies to the goal of the consumers. It is a known fact that consumers are increasingly becoming ethical shoppers especially when it concerns their health. At Coke, consumer-centered innovations include most of “shopper perception is reality” that drives Coke Company to effectively embrace the brand portfolio strategies based on personalization and the concept of self-checkout on the basis of what consumers want. Innovation directs to the fact that an organization should be capable of bringing genuine innovation while remaining practical while doing so (Harvey and Brown, 2006).               While many people associate innovation with major technological or organisational advances, the vast majority of successful innovations result from a stream of small incremental changes which may individually have only limited effects on consumer behaviour (Johnson and Scholes, 2002). For example, in order for Coke to develop products that will regain the reputation of a leading beverage brand, the Company removed those barriers to innovation. Research Council removes unnecessary costs that could be incurred from distribution and supply systems; increase consumer choice and reduces overall costs of inventories and physical assets hence supporting growth, improving customer service and increasing market responsiveness.                   Although innovation directly implicates the initiative to drive profitability, this must be the goal at all times (Harvey and Brown, 2006). An organization must understand that what will really drive profitability is the appreciation for putting innovative strategies into action. For Coke, this was realized through positioning four conditions – clarity and commitment to goals, focus on key drivers, simple mechanisms that propel achievement and cadence of accountability – that are always associated with great performance.   Conclusions and Recommendations             In sum, there are specific drivers for the three cola innovation. These are economic benefits, achieving public objectives, aligning supply with demand and increased investment in research and development. Further, there is only one recommendation for Coke that is to conduct a materiality analysis. The materiality could clarify issues on how the three cola strategy could drive long term business value, identify and address risks surrounding the strategy and build and maintain a strong brand and reputation.     References   Bokaie, J 2007, ‘Coca-Cola and its three-cola strategies,’ Marketing Magazine, retrieved on 4 March 2009, from http://www.marketingmagazine.co.uk/news/765194/Media.   Edersheim, E H and Drucker, P F 2007, The Definitive Drucker: The Final Word from the Father of Modern Management, McGraw Hill Professional.   Harvey, D and Brown, D 2006, An experiential approach to organization development, 7th ed., Prentice Hall, Upper Saddle River, NJ.                 Johnson, G and Scholes, K 2002, Exploring Corporate Strategy, Prentice Hall.   Johnston, R E and Bate, J D 2003, The Power of Strategy Innovation, Sage Publication, London.   Leadership Message, 2007, Coca-Cola website, retrieved on 4 March 2009, from http://www.thecoca-colacompany.com/ourcompany/ar/leadershipmessages.html.   Paley, N. 2006 The Manager’s Guide to Competitive Marketing Strategies, Thorogood: London   Remarks by Muhtar Kent at The Coca-Cola Company’s 2008 Annual Meeting, 2008, Wilmington Delaware, retrieved on 4 March 2009, from http://www.thecoca-colacompany.com/presscenter/viewpoints_kent_annual_meeting_2008.html.   Stanford, D D 2007, ‘Coke is it’ for CEO, sales bubble up,’ The Atlanta Journal Constitution.   Trout, J 2007, ‘Confusion in Coke Land,’ Forbes online, retrieved on 4 March 2009, from http://www.forbes.com/2007/03/29/trout-marketing-coke-oped-cx_jt_0329trout.html.   Credit:ivythesis.typepad.com

COCA-COLA AS AN INNOVATIVE COMPANY

COCA-COLA AS AN INNOVATIVE COMPANY Executive Summary Coca-Cola fully understands the meaning of innovation as evidenced by the e...

Pepsi Company Inc. towards Globalization

PepsiCo Inc. towards Globalization Nowadays, despite of the very tough world competition and globalization is fast emerging; there still companies exist that are eager to compete globally. Thus, this essay will argue about a sample of U. S. Company, specifically PepsiCo Inc., which operates globally, how this company is facing the competition, the political and economic policies that affect the firm and the impact of globalization for the company. PepsiCo Inc. is one of the world’s leading food and beverage company that started on 1965. Create different food and beverage products that would soothe the taste of its consumer were its expertise. The major focus of the corporate strategy for PepsiCo is to present the analysis that it used to adapt to its marketing environment.  The changes in the environment had been sharply perceived by PepsiCo Inc., as it operates both within and beyond its national boundaries or in short as it operates globally.   As the company knows that competing globally means taking a big risk and facing a big challenge for the company itself, the company used one of the economic concepts that became a useful tool in their continuous growth globally this is the competitive advantage.  Competitive advantage composed of cost leadership, product differentiation and focus.  In cost leadership, PepsiCo attempt to become the producer of food and beverages with the lowest costs in its industry. Cost cutting and increased efficiency are the main routes that this company has done. Through cost cutting, the PepsiCo will be able to priorities which product should be given emphasize and which products were not.  Aside from cost leadership, the company used also the product differentiation, as part of the competitive advantage in economic concepts.  Here, PepsiCo differentiates its products from those of competitors by developing product features which the others do not have. Furthermore, a company cannot operate unless they meet the conditions offers by economic and political policies. Government economic and political policies control the entry of goods and services into the realm of the public. Here, PepsiCo is affected since it cannot operate without the permission of the government.  Political and economic policy affects the company in a way that the company cannot decide on its own and cannot do immediate changes within the format of the company unless it has been approved by the policy.  In relation to this, this paper will then discuss about globalization and how it affects PepsiCo. The term “globalization” has acquired considerable emotive force. Some view it as a process that is beneficial—a key to future world economic development—and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases inequality within and between nations, threatens employment and living standards and thwarts social progress. Economic “globalization” is a historical process which is the result of human innovation and technological progress. This came into common usage since the 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions—both trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activity—village markets, urban industries, or financial centers (IMF Staff, 2002).  On the other hand, global markets offer greater opportunity for people to tap into more and larger markets around the world. It means that they can have access to more capital flows, technology, cheaper imports, and larger export markets. But markets do not necessarily ensure that the benefits of increased efficiency are shared by all. After knowing the definition of globalization, this paper will discuss the impact of globalization to the company.  To globalize means to “make worldwide in scope or application,” and the globalization of trade means freer and more intense worldwide trade across national borders. Technology helps to make globalization possible. With computers linked across companies, countries and continents, geography and time no longer weigh down the flow of information. Expanding globalization brings stiff competition for international markets. Increased competition has resulted from: the new market-based economies of developing and former communist countries; the introduction of new products and processes; more efficient use of old materials; and innovations in information technology. These forces have transformed markets that were once regarded as a reliable source of earnings. Through globalization, PepsiCo had merged to different acquisitions that helped them became one of the largest food and beverage company.  Globalization had helped the company to be strong as they know that competing globally means reaching the goal of mission of the company and that is to serve the people by providing food and beverages that will soothe their taste.   Reference PepsiCo, Inc., 2000   IMF Staff, (2002). Globalization: Threat or Opportunity? International Monetary Fund.   SWOT Analysis and Marketing Analysis. Available at [eCommerce-Now.com]             Accessed on [28/05//2001]. Credit:ivythesis.typepad.com

Pepsi Company Inc. towards Globalization

PepsiCo Inc. towards Globalization Nowadays, despite of the very tough world competition and globalization is fast emerging; there still ...