PepsiCo has shown the best current ratio and is able to pay off their debts, which Coca-Cola does not have that and is struggling to pay off their debts. However, Coca-Cola has a higher retained earnings percentage, which means that it is able to have funds available for future growth of the company. The hope for both companies is to provide their financial statement with better information presented over their competitor giving the ability to earn more investors. PepsiCo and Coca-Cola do not need to be at war with each other as they have what it takes to get people to use both products, no matter what. Keep in mind, that it is the people’s choice whether or not to support a company and decide whether to invest in the company not competing against each
Executive Summary: A stock analyst, who is conducting a study of the North American carbonated soft drinks industry, is evaluating the impact of Pepsi’s refresh project (PRP). Pepsi has a long history with its main competitor, Coca-Cola, and they are competing against each other to steal market share in an oligopoly market. CSD market depends purely on marketing strategy to win market share, and Pepsi needs a new innovative marketing strategy to overturn its decreasing sales trend and stock price. To improve the current status, Pepsi introduced a new social media marketing program called Pepsi’s refresh project. With the introduction of PRP, Pepsi boldly stated its confidence in PRP and announced to stop its Super Bowl advertisement.
• By removing the finished goods network the company would save $137 million in cost of goods sold because the bottling companies take on most of these costs. Cadbury would possibly lose $49 million in case sales and $39 million in Gross contribution after marketing. This also only allows the product to be sold in the soft drink isle moving it away from the juice isle where 56.7% of Hawaiian Punch volume is sold. Decreases Cadburys control on product sizes. • By removing the direct-store delivery networks the company is potentially losing $27 million in gross contributions after marketing.
International Trade ECO 372 University of Phoenix There are many contributing factors to the stabilization and prosperity of our global market. We, the United States, are living in a time of severe trade deficit, meaning that we are importing many more goods than we are exporting. While it is nice to be able to buy foreign products at a lower price, there is risk in doing so. When we purchase foreign goods over domestic at lower prices it forces our domestic companies to sell their goods at lower prices to remain competitive. These lower prices may lend to making enough profit to sustain the current workforce.
Another influence is what they hold in a current account could be considered a deficit which means the country is spending more on foreign trade than it is receiving. This creates a supply of their own currency than a demand for its products. According to our text, Mankiw, (2007) 1. Consumers are wealthier, which stimulates the demand for consumption goods. 2.
However, the company must be careful because a too big of a ratio can eventually lead to bankruptcy (Investopedia). The inventory turnover ratio for Nestlé is lower than Hershey’s because Nestlé either has lower sales or excess inventory. The total asset turnover for Hershey’s is also higher; this means that it is more efficient in using its assets in generating sales. As a result of a higher total asset turnover, the gross profit margin is lower than Nestlé’s (Investopedia). The return on assets and return on equity ratios are also better for Hershey’s because the company is making more money on less investment then Nestlé.
If Pepsi can do well in economic recession then it could do even better in economic booms but it must stay in touch with consumer tastes and trends. In the 1990’s to increase brand loyalty to Pepsi, they launched the Pepsi Stuff campaign. Consumers of Pepsi were awarded points through label packaging they could use the points to buy merchandise. In the mid 90’s consumers started to become more health conscious. In 1997, PepsiCo started to increase their revenues again by changing their product mix through acquisitions and divestitures.
1. Why was it important for Coke to reposition the brand away from being a "diet" brand and towards a mainstream "aspirational" perception? Pepsi Max, Coke Zero’s biggest competitor, was heavily discounted and as a result Coke Zero was up to 58% more expensive. Considering that 75% of cola is sold on price promotions, Coke Zero needed something to justify the price premium to be able to successfully compete. Coke Zero’s communication strategy was taste-led in a category which was already suffering from the stigma of perceived bad taste.
As a firm grows the average cost of advertising per unit will fall, leading to lower average costs. e.g., small firms are unable to afford large scale advertising campaigns, while their larger competitors are able to finance television and radio campaigns. b) Explain two reasons why McDonald’s will be able to achieve more marketing economies of scale than GBK. McDonald’s is the market leader in the UK; the company is a much bigger firm than GBK with 1,225 UK outlets. A large firm can spread its advertising and marketing budget over a large output and it can purchase its inputs in bulk at negotiated discounted prices if it has sufficient
Share of own SF rose significantly from 22% to 28 % in Period 6 Price for Allround continuously increased from $ 5.99 to $6.20 and $6.39 in Period 6 according to inflation rate, main competitors and market development. I increased the Advertising budget form $20 to 24 Million and slightly changed AD message and started the comparison with Coughcure, because I compared cheaper Allround+ with Besthelp. Allstar’s Retail Sales rose from $669.8 to $743.5 and $873.7 Million. These positive results were followed and promoted by a slight decrease in discounting. Stock price rose from $60.85 to $71.38 and $89.31 in Period 6.