Symbol: PEP Exchange: NEW YORK STOCK EXCHANGE Industry: Refined & Packaged Goods Sector: Consumer Merchandise Purchase Price: $43. 12 Date of purchase: December 2002 52week Excessive $78. 09 52week Low $61. 89 Initial Floors 2 $74. 26 Walking Floor a few $77. 87 Beta N/A Market Hat $123. eleven billion Shares Outstanding 1 ) 61 billion dollars Dividend Deliver 1 . 50% P/E Rate 20. 49 Competitor #1 Coca-Cola (KO) Competitor #2 Cadbury Schweppes (CSG) Form of Security: Large Cap Growth Predicted Shareholder Return 12 months: 14. 1% Past your five years: thirty four. 53% Past 10 years: 128% Predicted Gross annual Return:
Proper and Competitive Analysis The first point of analysis that ought to be examined when utilizing Porter's five forces is the competition inside the industry. Soft drink has differing degrees of competition in their diverse sectors. Within their carbonated drink sector Pepsi really simply has a single major competitor; Coca-Cola. Cadbury Schweppes is usually a rival, but Cadbury is in the procedure for selling away their carbonated beverage sector. The major competition Pepsi must deal with through this sector is usually Coca-Cola, as a result creating a kind of Duopoly. The competition is somewhat minimized however because of the item differentiation. Various avid soda drinkers will tell you that there is an improvement between Pepsi and Softdrink, and have their own secret recipes. Unfortunately for Pepsi, the market is usually not a complete duopoly due to substitutes. Additionally it is intensely competitive. Pepsi has a differentiated product inside the carbonated soda sector yet there are substitutes; store brands. This restrictions Pepsi's ability to raise prices. As a result, Pepsi's price boost ability is limited to pumpiing that will most probably affect all producers of carbonated soft drinks (assuming most have identical hedging strategies). Pepsi's different products experience different competition. The Frito-Lay brand's major rival is usually Proctor and Gamble, and again, shop brand substitutes. However , Frito-Lay has had a really successful program in previous years, and revitalized their particular brand photo for Doritos and Sunshine Chips. Both of these products are very differentiated and there are few alternatives for Doritos and at the moment none intended for Sun Potato chips. Pepsi's product differentiation due to their marketing strategies has greatly limited the threat of recent entrants. As well, the hefty start up costs of manufacturing and packaging vegetation would be a prevention. Still, the most important deterrent is usually brand picture and popularity; a new organization would be quite hard pressed to consider market share faraway from an established company like Soft drink or their affiliates. SWOT Pepsi's technique is to meet consumer demand by introducing new products in order to increase market share. The demand for carbonated carbonated drinks has been lowering as buyers focus more on healthier substitutes. PepsiCo recently acquired sparkling drink company IZZE. The organization has also authorized a certification agreement with Ben & Jerry's to get the sale of milkshakes and a deal with Starbucks to distribute their Ethos water brand. It includes launched a coffee-flavored cola, Pepsi Max Cino, in the U. K. The business has also created a joint-venture with Starbucks in China. Pepsi is usually allowing Starbucks to sell its beverages in its current distribution centers in an attempt to capture a percentage of the implementation of " grab-n-goвЂќ coffee in Markets from the asian continent. In addition , Pepsi is taking part in a marketing advertising campaign to be proven on the flat-screen televisions that line the walls of subway cars in Shanghai. The marketing trick is interesting because it requires short videos of a motion picture, or " subopera, вЂќ to be proven in tiny segments over forty weekdays. The movie is a love story and apparently, can be not timid about displaying both the Starbucks and Soft drink logos. Internet marketers in the US and Asia consider this method will be effective, mainly because it fits with all the trendy and upscale Hard anodized cookware subway viewers. Bowing to obesity concerns in the U. S., Soft drink has developed a in the overall wellness of their customers and...