PepsiCo: A Fortune 500 Company

PepsiCo: A Fortune 500 Company

Prepared for
Professor Keller
COM 338/ENG 338 Instructor

Prepared by
Sarah McMillan, Ryley Oben, Averi Skop,
John Halpin, James Etheridge
University of Michigan- Flint

April 5, 2015

MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:

Professor Keller, COM 338

Group 2: McMillan, Skop, Oben, Etheridge, Halpin
March 28, 2015
PepsiCo: A Fortune 500 Company

Here is the research report that you requested of the Fortune 500 Company, PepsiCo.
While conducting our research we learned a great deal about the company. We gained
more insight about their competitors and what they do in order to continue to increase
their consumer base. We also learned more about the make-up of the company itself.
Based on what we have learned from our research we are able to understand why
PepsiCo is a successful business and why it will continue to be successful. PepsiCo is
very competitive which gives them an edge over the other companies that it is competing
against. Certain aspects of the company, such as their environmental consciousness and
their involvement in the food industry, are part of the reason they continue to be so
successful over other companies. The continuing competition helps the company improve
and remain successful.
We were able to learn more about the companys values, history, and competition. By
collecting information individually and then later bringing it altogether for discussion,
our group was able to successfully work together in conducting our research.
Thank you for providing us with this opportunity to research a well-known Fortune 500
Company and work on our team skills. Our greater insight on how PepsiCo runs and
competes with its competitors will help us in making any business we work for in the
future more successful. If you have any questions or would like to discuss PepsiCo
further, please feel free to contact us.

Table of Contents
Page
Introduction......1
PepsiCo History...1
PepsiCo Today.....1
Revenue and Profitability....2
Mergers and Acquisitions....2
Products...3
Original products.3
New Products...3
Competition..4
PepsiCo vs. Coca-Cola Company....4
PepsiCo Vs. Dr. Pepper Snapple INC......4
Agenda.....5
Advertisements5
Strategic Planning....5
Organization.6
Original Founder..6
Current Executives...6
Customer Service.7
Ethics....7
Conclusion...8
Works Cited.9
Illustrations
Figures

Page

1. Stock Trend Graph..2

2. Percentage of Sales from Each Product..3

iii

PepsiCo: A Fortune 500 Company

INTRODUCTION
PEPSICO HISTORY
PEPSICO TODAY
REVENUE AND PROFITABILITY
MERGERS AND ACQUISITIONS

PRODUCTS
ORIGINAL PRODUCTS
NEW PRODUCTS

COMPETITION
Like every other fortune 500 company, PepsiCo has been competing with other
companies since the Pepsi recipe was first created. PepsiCos two biggest competitors are
Coca-Cola and Dr. Pepper Snapple INC. Competing with these companies has helped
PepsiCo become the successful company that it is today.
PEPSICO vs. COCA-COLA COMPANY
It is world-wide knowledge that Coca-Cola and Pepsi have been at war with each other
for years, but how the war began is a lot less known. In 1886, the original Coke recipe
was created, followed by the creation of Pepsi 13 years later (Business Insider). In the
mid-60s Pepsi merged with Frito Lay, creating PepsiCo. This began the war between
PepsiCo and Coca-Cola.
Although people often believe that Coca-Cola is the more successful company, many
statistics show otherwise. Although Coca-Cola holds 42% in the cola market and PepsiCo
only holds 31%, PepsiCo is more successful in many other ways (Business Insider, 13).
Because of Pepsis merge with Frito Lay they bring in about $66.68 billion in annual
revenue, while Coca-Cola only brings in about $46 billion (Business Insider, 13). Pepsis
stock was up 14% in 2014, compared to Coca-Colas 7% gain (CNN Money). PepsiCos
earnings are also expected to grow about 7% annually for the next few years, while CocaColas are only expected to increase about 4.6% a year (CNN Money). PepsiCo is not
simply a beverage company, which gives them the edge over Coca-Cola in many ways.
Not only does have some greater financial success over Coca-Cola, but they also appear
to think more about helping their consumers. PepsiCo employs approximately 294,000
people, while Coca-Cola only employs 139,600 (Business Insider, 17).

Although PepsiCo appears to be more successful in many ways, and strives more to help
their consumers, Coca-Cola still appears to be the fan favorite. Coca-Cola has about
391,000 Twitter followers and 34.8 million Facebook fans. PepsiCo has only
approximately 143,000 Twitter Followers and 6 million Facebook fans (Business
Insider,17). This is likely because people often forget about PepsiCos merge with Frito
Lay. Unlike Coca-Cola, they are not simply a beverage company.
PEPSICO vs. DR. PEPPER SNAPPLE INC
The third largest non-alcoholic beverage maker is Dr. Pepper Snapple INC. PepsiCo,
Coca-Cola, and Dr. Pepper Snapple have all been competing against each other for years,
it is obvious to many however that PepsiCo is more successful than Dr. Pepper Snapple.
Dr. Pepper Snapple INC only brings in about $6.12 billion in yearly revenue (DPS
Competitors). This is a large difference when compared to the $66.68 billion of PepsiCo
and $46 billion of Coca-Cola. The greater success of PepsiCo and Coca-Cola over Dr.
Pepper Snapple INC may be because the company was founded much later than the
others, in 2003 (DPS Competitors).
Figure 1: Product Comparison
Beverage
Flavor/Type:

PepsiCo

Coca-Cola

Dr. Pepper
Snapple

Cola

Pepsi

Coca-Cola

RC Cola

Lemon-Lime

Teem, Slice, Sierra

Mist, 7UP(in
countries other
than US)

Sprite,
Lemon & Paeroa

7UP (in US)

Root Beer

Mug Root Beer

Barqs Ramblin
Root Beer (until
1995)

A&W Root Beer,

Stewarts
Rootbeer, Hires
Root Beer

Iced Tea

Lipton, Brisk

Nestea, Gold Peak

Tea, Fuze

Snapple

Sports Drinks

Gatorade, Propel

Powerade,
Aquarius, Vitamin
Water

All Sport

Bottled Water

Aquafina

Dasani

Nestle Pure Life

These three companies have many beverage similarities. The chart below compares the
different flavors of drinks that the company provides. It also shows the differences in the
names that each company has for their main beverages.

AGENDA
ADVERTISEMENTS
STRATEGIC PLANNING

ORGANIZATION
ORIGINAL FOUNDER
Pepsi was first developed in the 1880s by Caleb Bradham, a pharmacist from New Bern,
North Carolina. He coined the name "Pepsi-Cola" in 1898 (PepsiCo, 2015). As the cola
developed in popularity, he created the Pepsi-Cola Company in 1902 and registered a
patent for his recipe in 1903 (PepsiCo, 2015). The Pepsi-Cola Company was first
incorporated in Delaware in 1919 (PepsiCo, 2015). The company went bankrupt in 1931
and on June 8 of that year, the trademark and syrup recipe were purchased by Charles
Guth who owned a syrup manufacturing business in Baltimore, Maryland. Guth was also
the president of Loft, Incorporated, a leading candy manufacturer, and he used the
company's labs and chemists to reformulate the syrup (PepsiCo, 2015).
CURRENT EXECUTIVES
PepsiCo current CEO and president is Indra Nooyi. The vice president and head of
communications is Jon Banner. The president is Oswald Barckhahn.
CUSTOMER SERVICE
PepsiCo believes acting ethically and responsibly is not only the right thing to do, but
also the right thing to do for their business. All PepsiCo employees are expected to
embrace the principles of their Code and show respect in the workplace, act with integrity
in the marketplace, ensure ethics in our business activities, and perform work responsibly
for our shareholders (PepsiCo, 2015). PepsiCo strives for perfect customer services and is
always striving for better performance.

CONCLUSION
Since its inception, PepsiCo has grown dramatically. The company has not only survived
bankruptcy but it has grown to be the number two soft drink company in the world.
PepsiCo is not only a soft drink company, it has branched out into other areas as well.
They have acquired numerous well-known companies such as KFC, 7UP, Tropicana/Dole
juices and a merger with Quaker Oaks to name a few.

The companys revenue is showing significant growth and their profitability is increasing
as well. Their projected earnings is positive and their market share in increasing.
Although PepsiCos market share is less than Coca Colas, their annual revenue far
exceeds Coca Cola. This is due mainly because PepsiCo continues to branch out into
different arenas whereas Coca Cola remains true to the software market.
Not only has PepsiCo made significant strides in the beverage industry, they are also very
environmentally conscience. They were the first soft drink company to produce lightweight recyclable plastic bottles.
In short, PepsiCo employs more people and they are striving to not only become the
number one soft drink company, but also they want to do it responsibly.

WORKS CITED
DPS Competitors | Dr Pepper Snapple Group, Inc Dr Stock - Yahoo! Finance. (n.d.).
Retrieved March 25, 2015, from https://finance.yahoo.com/q/co?s=DPS
Mann, Jake. "Why Taking the PepsiCo-Anheuser-Busch InBev Relationship a Big Step
Further Makes Sense." N.p., n.d. Web. 25 Mar. 2015.
Soda Wars! Pepsi beats Coke on Wall Street. (n.d.). Retrieved March 25, 2015, from
http://money.cnn.com/2014/10/09/investing/pepsi-earnings-stock-coke/
"Pepsi Stock Quote." CNNMoney. N.p., n.d. Web. 25 Mar. 2015.
"Pepsi Store - History of the Birthplace of Pepsi." Pepsi Store - History of the
Birthplace of Pepsi. N.p., n.d. Web. 22 Mar. 2015.
"PepsiCo, Inc. | American Company." Encyclopedia Britannica Online. Encyclopedia
Britannica, n.d. Web. 24 Mar. 2015.
"PepsiCo Inc." Growth, Profitability, and Financial Ratios for (PEP) from
Morningstar.com. N.p., n.d. Web. 24 Mar. 2015.
"PepsiCo, Re-Energized." Forbes. Forbes Magazine, n.d. Web. 24 Mar. 2015.
(n.d.). Retrieved March 25, 2015, from http://www.businessinsider.com/coca-cola
vs-pepsi-timeline-2013-1#coke-and-pepsi-arent-the-only-brands-that-have
gone-at-it-for-decades-18
"Who We Are." Our History. N.p., n.d. Web. 24 Mar. 2015.