Coca Cola Competitors’ Analysis

PepsiCo

Group 8

Nilesh Desale D012

Subham Mohta D033

Sukrut Parikh D038

Saurabh Prabhu D043

Aditya Limaye H030

Tejas Gijare C023

Competitors’ Analysis

Coca Cola is the primary beverage competitor w.r.t PepsiCo.  

The below table indicates direct comparison between the key indicators of PepsiCo and Coca-Cola (Beverage industry competitor):

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The major competitors, in the food and beverages industry, to Pepsi are Dr Pepper Snapple Group, Nestle, Kellogg, Kraft Heinz Company, Mondelez International and few others.

The below table indicates direct comparison between the key indicators of PepsiCo and its major food and beverage industry competitors:

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Company Analysis

The company – PEPSICO was incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. It is a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. Through its operations, authorized bottlers, contract manufacturers and other third parties, the company makes, markets, distributes and sells a wide variety of convenient and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.

Percentage of revenue from food division worldwide has increased to 52% of the total revenue whereas the revenue from beverages has decreased to 48% of the total revenue owing to the shift of consumers towards healthier drinking options. Moreover, as of 2017 25% of the company’s revenue comes from its nutrition line of products.

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Revenue

The revenue of PepsiCo has declined over the years the reason for which is –

1. Consumers have started to get more health conscious and have started to switch to

healthier food products and beverages. Due to which the main brands of PepsiCo such as

Pepsi and Lays suffered in sales. 2. The sales of PepsiCo in Latin America has declined from 6.8 billion (2014) to 9.4 billion (2016) 3. The sales in European sub Saharan Africa has also declined from 13 billion (2014) to 10.2 billion (2016).

Profits

The profits have remained stable over the years despite a decrease in revenues except a slight dip in the year 2015. The reason for which is an increase in the operational efficiency in its day to day operations as in mentioned in the annual report of PepsiCo that it saved 600 million since 2011 with environmental sustainability initiatives and an annual savings of 1 billion through its productivity agenda.

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Strategy

PepsiCo’s approach is to diversify and distribute its supply chain hubs. For example, the company operates supply chain hubs for each regional market. In this way, PepsiCo optimizes response times to fluctuations in demand

Value chain activities

Value chain analysis of PepsiCo is done to identify the ways in which business creates value for customers. Its value chain activities are segregated as under:

1. Inbound logistics

PepsiCo portfolio consists of 22 brands including Pepsi-Cola, Tropicana, Gatorade, Mountain Dew and Diet Pepsi and each brand belonging to PepsiCo generated at least one billion USD in retail sales in 2016.  

The economies of scale can be specified as the main source of value for PepsiCo derived from inbound logistics primary activity. PepsiCo also benefits from locating its production sites within close geographical proximity to the main sources of raw materials in order to save on transportation costs.

Technology is another driver of innovation that provides advantage to PepsiCo’s supply chain. One of the innovations that PepsiCo is exploring is 3D printing.  

On the contrary, Coca Cola has managed a very large supply chain which consists of lakhs of suppliers who are treated as business partners. Coca Cola also focuses on responsible environmental and workplace policies and practices.

2. Operations

PepsiCo operations are divided into the following the following six operational segments:

a) Frito-Lay North America (FLNA). This segment engages in manufacturing, marketing, distributing and selling branded snack foods.

b) Quaker Foods North America (QFNA). This segment is assigned with producing, marketing, distributing and selling cereals, rice, pasta and other branded products.

c) Latin America segment produces markets, distributes and sells a several snack food brands for Latin American market. These brands include Doritos, Cheetos, Marias Gamesa, Ruffles, Emperador, Saladitas,Sabritas, Lay’s, Rosquinhas Mabel and Tostitos.