Assignment5

Assignment5 - Financial Management Paper Page |1 Financial...

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F i n a n c i a l M a n a g e m e n t P a p e r P a g e | 1 Financial Management Paper Sameer Nasafi Strayer University The Business Enterprise-BUS 508 BUS 508 Dr. Hasan Yemer June 6, 2011
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F i n a n c i a l M a n a g e m e n t P a p e r P a g e | 2 In 1886, the Coca Cola Company was developed but it wasn't until 1898 that the fierce competitor Pepsi-Cola entered into the market. These two companies are the two major players that dominate the consumer beverage industry. Historically, the carbonated soft drink industry in the United Stated has been profitable for various reasons. The industry's two dominant players Coke and Pepsi have both grown their revenues by 10% annually from 1975 to 1994. By 1998, the US beverage industry reached stability with gallons of carbonated soft drinks consumed per capita on an annual basis floating between 54 and 52.3. Before the market reached this plateau, Coke and Pepsi were able to maintain high profitability simply because the market kept growing, which allowed for profitable sales growth. Coke and Pepsi have since been competing to rein the global market in consumer beverages. The global soft drink market is large at approximately US$ 410 billion (2002). In volume terms, the market size is estimated at 72 billion cases. US is the largest soft drink market and accounts for approximately 23% of global volumes. In terms of per capita consumption, US is ranked third behind UAE and Mexico. U.S. annual sales of refreshments total approximately US $88 billion. The Coca-Cola Company (TCCC) owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite). Its other brands include Minute Maid, Powerade, and Dasani water. In North America it sells Groupe Danone's Evian; it also sells brands from Dr Pepper Snapple Group (Crush, Dr Pepper, and Schweppes) outside Australia, Europe, and North America. The firm makes or licenses more than 3,000 drinks under 500 brand names in some 200 nations. Although it does no bottling itself, Coke owns 34% of the world's #1 Coke bottler Coca-Cola Enterprises (CCE); 32% of Mexico's bottler Coca-Cola FEMSA; and 23% of European bottler Coca-Cola Hellenic Bottling. It also manufactures, or authorizes bottling partners to manufacture, fountain syrups, which it sells to fountain retailers, such 2
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F i n a n c i a l M a n a g e m e n t P a p e r P a g e | 3 as restaurants and convenience stores, which use the fountain syrups to produce finished beverages for immediate consumption, or to fountain wholesalers or bottlers, which in turn sell and distribute the fountain syrups to fountain retailers. In addition, the Company manufactures certain finished beverages, such as juices and juice drinks and water products. The company introduced a new plastic bottle in 2009 that is totally recyclable and made partially from plants. PepsiCo is one of the world's leading producers of snack foods and beverages including Pepsi
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This note was uploaded on 07/03/2011 for the course BUS 508 taught by Professor Akpan during the Spring '10 term at Strayer.

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Assignment5 - Financial Management Paper Page |1 Financial...

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