INTRODUCTION

PepsiCo is one of the world's most familiar consumer food and beverage companies, offering
brands like Frito-Lay, Gatorade, Tropicana and Quaker.It's best known, of course, for is its
flagship soft drink brand... and its rivalry with Coca-Cola.
The Coke vs. Pepsi conflict raged on for decades across the country on supermarket shelves, fast
food restaurants and the like.Coke always held the bigger market share in this area. But at times,
Pepsi - fueled by smarter and more aggressive advertising campaigns - moved ahead.
Many investors believe the cola war is still going strong. But that's where they're wrong.
MARKET COMMONALITY
1. Indian market
Some of the steps taken by Pepsi to cater to the regional preferences and consumer spending
behavior of the country could positively impact its market share. In cities such as Mumbai and
Bangalore, Pepsis flagship juice brand Tropicana is now available in a powdered form in
sachets at a reasonable price of 10 rupees (16 cents). The company also launched Nimbooz
Masala Soda in North India, and revived its Dukes Masala Soda brand keeping in tune to local
taste. Coca-Cola has also revamped its RimZim Masala drink to compete with Pepsi in this
category.Even though Coca-Cola has a lead in the Indian soft drink industry, Pepsi has a
considerable market share of over 20%.The anticipated overall growth of this market along with
a rise in rural spending should boost Pepsis top line in the next few years.
Pepsi apply very aggressive pricing strategy, places around Delhi and Mumbai.Coca cola prices
are affordable. They target different regions of India.
They differentiate region into 2 parts.
(1) INDIA- A urban area
(2) INDIA- B rural area1
2. Foreign markets
Both PepsiCo Inc. and Coca-Cola Co. -- two of the world's largest snack-food and beverage
companies -- have faced flagging sales and profits in North America in 2013 amid a push
to compete for more market share in emerging markets.
PepsiCo, the worlds largest snack-maker and second-largest soft-drink maker, and Coca-Cola,
the world's No. 1 soft-drink maker, both reported results roughly in line with analysts' already
tepid expectations.
3. Asia, Middle East & Africa
Pepsi reported organic revenue growth of 6 percent for the quarter, driven by pricing. But
economic volatility and unfavorable foreign exchange markets translated into a 3 percent decline
in net revenue.
Operating profit fell 7 percent for Pepsis sprawling regional unit, down to about $295 million
from $317 million a year earlier. Revenue grew slowly, especially in India and Egypt. Pepsi cited
foreign-exchange volatility and political unrest, respectively, in those countries.
Still, for the year to date, Pepsi performed better than it did in 2012, with a 60 percent boost in
operating profit. Revenue has lagged that, declining 3 percent for the year to date, which
suggests the company has cut costs considerably.
Coke also faced challenges. In Eurasia and Africa, net revenue fell 4 percent for the quarter, with
net revenue in the Pacific -- which includes China, Japan, India and Southeast Asia -- down by 9
percent. Profit declined 6 percent in both regions.
Coke's profit in Eurasia and Africa improved in September 2013 compared to the nine months
leading to September 2012, however. Sales volume also grew slightly, led by the Middle East
and Africa.
4. Europe
Pepsi said that net revenue grew 3 percent for the quarter, capping off a steady year with a
similar 3 percent rise for revenue in the year to date. Profit fared worse in Europe, with no
advance over Pepsis position last year, for profits in the year to date.
Economic weakness in Europe, even as it slowly emerges from a continent-wide recession, has
dampened consumer spending there. Pepsi didnt mention Europe specifically in a slideshow
accompanying its Wednesday morning earnings call.
Coke's sales in Europe fell 1 percent for the quarter and 2 percent for the year so far. The
company blamed economic malaise in southern Europe. Profit rose 6 percent for the quarter
there, however.
Russia is a key market for Pepsi on the continent, where it claims to be the leading snacks and
drinks brand. One analyst flagged Russias economic weakness lately as signaling trouble for
Pepsi before earnings.
Coke is pushing back in Russia, however, noting that its 3 percent sales increase there was lifted
by Coca-Cola, Schweppes and Dobry, a popular Russian juice brand Coke acquired in 2005. A
major summer marketing campaign also drove sales.
5. Latin America
For Coke, Latin American quarterly sales didnt grow from the year before, but were up 2
percent for the year to date. Key Brazil sales declined 1 percent, with Mexico declining 2
percent. The company cited a deteriorating economy in Brazil, and September hurricanes in
Mexico.
Cokes Latin America profit fell 2 percent in the quarter. But the company said it fought back by
gaining market share in both still and sparking beverages.
Pepsi won 9 percent net revenue growth in Latin American foods. Pepsi doesnt break out
revenue and profit for its Latin American drinks business, but said Latin American drink sales
rose 0.5 percent.
Pepsis overall Americas drink business, where Latin American drink financials are embedded,
saw sales volumes tumble 4 percent, though it climbed back from an even worse second quarter.
Heres a transcript of Cokes earnings call from Tuesday morning. Pepsi also has a colorful info
graphic on their 2013 year-to-date performance here.
FEATURES COKE PEPSI
PARENT COMPANY Coca cola company Pepsi Co
SALES 450 MILLION (globally) 324.58 million (globally)
MARKET SHARE 57.8 % 35.6 %
DISTRIBUTION Grocery stores, retail stores,
shops, malls ets.
Grocery stores, retail malls,
shops ets.
BRAND POSITIONING Sweetened carbonated drink Sweetened carbonated drink

RESOURCES OF PEPSI CO.
PepsiCo is an organization that has been known for its marketing and distribution prowess. This
section is dedicated to analyzing the core competences of PepsiCo and evaluating their effect on
the strategy adopted by the organization.
Tangible Resources:
Financial Resources PepsiCo has a strong financial backbone to support its aggressive
marketing strategies, promotional campaigns and social activities. It works in collaboration with
various governments in the countries that it operates and has operational ties with various civic
authorities. Its capacity to generate finances is showcased by the fact that it could raise 31.37
billion rubles from a Ukrainian juice manufacturer, WBD which it acquired last year
Organisational Resources- PepsiCo recently revamped its organizational structure in an effort to
handle the double digit growth prospects. It has three broad units, each of which looks after a
sizeable business. The CEO of the company Indra Nooyi is known to be a flamboyant leader.
She is known to lead by delegation and empowerment. This increases the loyalty of the
employees towards the organization
Physical Resources - PepsiCo has state-of-the-art manufacturing plants at three locations in
India . In addition to this, it has 37 bottling plants, of which 17 are owned by PepsiCo. These are
spread all over India, which help in increasing the reach of its products and ensuring timely
delivery.
Technological Resources PepsiCo tries to keep itself abreast of the latest technological
developments. In a recent step taken, it has added hydrogen injected trucks to its delivery fleet in
Canada. This was done as an effort towards increasing the fuel efficiency of its fleet and
reducing emissions.
Intangible Resources
Human Resources PepsiCo attracts some of the best minds in the industry. By providing them
enough financial and non-financial motivation and handing them challenging tasks to perform,
they keep their employees satisfied and loyal to the organization.
Innovation Resources - The pace of innovation in functional foods and beverages division in
PepsiCo has picked up since 2002. PepsiCo is second, after Kraft in this industry with 101
innovations since then. Some competitors are outspending PepsiCo on R&D investments by
nearly two to one margin . But PepsiCo has been making good use of every dime spent on the
R&D as is seen from the number of innovations vis--vis its competitors.
Reputational Resources In a study conducted , it was seen that Pepsi as a brand enjoys a good
reputation with the customers. They like it for its distinct taste. The study also pointed out that
the brand name of Pepsi is certainly a force to reckon with. The quality perception of the product
is generally high. However most of the customers see it as a drink second to Coke. One area
wherein PepsiCo scores over its rivals is the social initiatives like contract farming and positive
water balance. Due to this, it has a very strong reputation with its suppliers.
Coca cola Company Resources
Being a global leader in production of beverages and soft drinks, Coca Cola Company has
various resources that play a major role in every production stage to ensure that the production
and delivery of its various product and subsequent client services are of high standards. The
company has both tangible and intangible resources that help it in the various production stages
and subsequent delivery of the products to the targeted consumers.
Tangible resources:
The tangible resources include physical, human and Financial Resources. Coca Cola Company
has many physical resources it possesses and manages. These physical resources include
buildings and equipment. Coca cola has managed to construct buildings in almost all regions.
The presence of self owned production plant means that the cost of production is maintained low.
This enables the company to offer high quality products at low prices. The presence of self
owned equipment ensures that the company does not lease or rent any equipment and thus
managing to cost of production low. The companys strong financial position ensures that it has
stable financial resources to carry out the production process without major problems in terms of
cash shortages. The positive cash flows usually ensure that a company has cash available for any
activity that needs cash (Lawton, 2006). This position enables it to avoid unnecessary debt
financing. The company also maintains a motivated work force. This has been a major force in
driving its products into shelves and subsequently into the shopping lists of consumers. The
company has highly invested in employee training and development as this is an important factor
in ensuring that the workers involved in the production deliver a high quality work, and those
that are concerned with marketing ensure that the products are bought by consumers. This has
come through realization that the coca cola products do not fall under the necessity class but
rather fall under impulse products.
Intangible Resources:
The Companys intangible resources include the technical resources, intellectual and goodwill.
Coca cola company has for a long time enjoyed technical resources that have helped the
company has technical expertise in production of some products that have been of great use
fostering the companys goals. The company has been able to come up with numerous flavors in
their soft drinks such as such as , Orange flavor, Pineapple, black currant, lemon, Ginger and so
on. These productions are a clear indication that the company has great expertise knowledge that
it uses as an advantage of other companies offering similar products, the company also enjoys
intellectual property of the brands that they provide. This is because once a company does
research and development and comes up with a product, it has the option of patenting that
particular product thus maintaining the exclusive rights to supply that particular product
(Edvinsson & Malone, 1997). The company has also enjoyed a goodwill and customer loyalty
over a long period of time this has been an internal strength that it has used to its advantage since
the coca Cola brand and its products have enjoyed an undying loyalty from consumers. The
brand visibility of the company has also ensured that many people access the products really in
time.