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... Now, why is PepsiCo dabbling in sports drinks, restaurants, and the breakfast food markets? ... PepsiCo has reshaped its business over the past few years and has proven much more capable of growing its business than has Coke. Also, PepsiCo has the edge over Coke in most financial criteria. ...
For years, number-two soda maker PepsiCo has lived in Coca-Colas shadow. ... Perhaps its simply because for years Coca-Cola executed a smarter business strategy by selling just the high-margin cola syrup, in contrast to PepsiCo who floundered in the low-margin and capital-intensive restaurant business.
Whatever the reasons behind Coca-Colas legacy of superiority over PepsiCo, the fact is that today these two businesses look remarkably similar, with one key exception -- price. ... 5 billion in sales; PepsiCo did $20. ... 2 billion in net profits; PepsiCo also earned $2. ... 9 billion; PepsiCo cranked out $2. ... Based on their 2000 financial results, heres how the two companies stack up on our quantitative Rule Maker criteria:
Rule Maker Criteria Coca-Cola PepsiCo
Sales Growth 2. ... 85
In contrast, the rejuvenated PepsiCo -- now free of its bottling and restaurant businesses -- has grown sales 18. ... PepsiCo continues to expect "double-digit" earnings growth for 2001, with the recent Quaker Oats acquisition being immediately accretive to earnings. Most importantly, the Quaker acquisition gives PepsiCo the Gatorade brand, which owns 80% of the sports drink market -- a market which Coca-Cola has been notably unable to penetrate with its Powerade brand.
The Quaker acquisition will also allow PepsiCo to better distribute its Tropicana products through Gatorades more-extensive distribution network (1).
The attractiveness of the breakfast market and the strength of Quaker Oats (which is the leading producer of hot and ready to eat cereals, snacks, and pasta dishes), PepsiCo’s strength scores are now greater than 6.
Approximate Word count = 1343
Approximate Pages = 5.4
(250 words per page double spaced)
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