美国论文代写 Analysis of PepsiCos Strategic Changes to Profitability

美国论文代写 Analysis of PepsiCos Strategic Changes to Profitability

4) PEST ANALYSIS

This identifies the political economical social and technological influence on every organization . This PEST analysis is for Pepsi

4.1) Political analysis: since Pepsi is into production and distribution ,pepsi products are subjected to various laws such as the food , drug and cosmetic act. The business is also subjected to state local and foreign laws . The business is subjected to various taxation policy in each country of operation. These includes with the environment of competitive products and pricing pressure and their ability to gain or maintain their market share . This would be challenging for Pepsi because Pepsi would like to penetrate into developing and emerging markets , which also depends on the economic and political conditions ; the company with these political issues should make necessary in fracture enhancements' to take care of its distribution , sales and the use of the technology. The government plays an important role in these industry since these products are consumed by the people the government regulates these product consciously. The governments of different countries impose fines if Pepsi as a company does not follow the required laws.

4.2) Economic Analysis: Pepsi as a company is subjected to the use of raw materials, which they used in their snacks and food industry which include corns, vegetables grape fruit, and potatoes. To the company to get these raw materials they relay a lot on the truck to move and distribute these products, as a reason of this fuel process matters to the company which are subjected to fluctuation in the prices. Since this company operates in the international markets the company faces volatile movements in the foreign exchange prices. Since the foreign exchange rate keep fluctuating the company faces several other issues in their industry growth rate, changing interest rates and various other facts. Pepsi is also subjects to other economical factors like money supply, business cycles energy availability and cost etc.

4.3) Social factors: Culture is the way that we do things around here. Culture could relate to a country (national culture), a distinct section of the community (sub-culture), or an organization (corporate culture). It is widely accepted that you are not born with a culture, and that it is learned. So, culture includes all that we have learned in relation to

values and norms,

customs

traditions,

beliefs

religions,

rituals

4.4) Technological factors: Pepsi in their bushiness sector they are into 3 different kinds of industry such as snack foods, juices and soft drink industry. Pepsi as a company is subjects to new techniques to manufacturing in order to reduce the cost of production. In order of the products to reach the end consumer on time Pepsi tries to improve its distribution system. For Pepsi to achieve all the above mentioned facts natural resources , climate location, and most of all skills , in fracture and technology are the most important things to be achieved by the company so that it would have a competitive advantage with its rival coca cola .

5) Financial Analysis

PepsiCo has made a revenue of $43.232 Billion during the fiscal year 2009. The FLNA division has made a revenue that constitute of 30 percent of the revenue asset in 2009.The PI division has made a revenue that is approximately of 41% of the total revenue of PepsiCo in 2009 .The PBNA division records a revenue that contributes to about 24% of the revenue in 2009. The QFNA has a revenue of about 5% of the revenue in 2009.[1]

Coca cola revenue has been outpaced by PepsiCo revenue .The financial times in 2009 revels that Coca-Cola had made minimal gains in that year ,which may be attributed to the slow growth in the soft drink sector. Coca cola would derive its income by 80 % from its soft drink sector and Pepsi co has a wide range of sectors from which its income could be derived from which , from the of drink industry its just 20%.Clealy PepsiCo has a wide range of snack products that serves as a cushion of the company from changing consumers preference. Consumers are becoming health concuss as these soft drinks are highly fructose syrup beverages and leads to obesity and they are gradually shying away from them.[2]

REVENUE GROWTH

COCA COLA

PEPSICO

All the ratio will be compared with the year 2007 to 2009 (Appendix B).

Price/earning ratio: Price /earning (P/E) ratio are higher for those firms which have a strong growth prospect, other things are held constant, but they are lower for riskier firms. PepsiCo in 2009 has a P/E ratio of 16.13 times, which is lower than the industry (21.1) and the (S&P 500)(19.8).Coca cola has a higher P/E ratio which is about 19.45 times which is also lower than that of industry (21.1) and the S&P 500 (19.8).Both these companies are in the soft drink industry , which is apparently a tough industry for the past 10 years. As previously mentioned earlier that the consumer are shifting their focus on to healthier drinks. PepsiCo is on a safe side which is an advantage , even if coca cola has more favourable ratio, [3]

COCA COLA

PEPSICO

Net profit : would tell us how much the company would generate in $1 it generates in revenue. Industry the profit margin's vary, a higher the better for the company and also for its competitors. For PepsiCo the net profit margin is10.78% verse the industry average of about 10.3% and the S&P 500 average of 11.6%. Coca-Cola's net profit margin was 22.1% versus the industry average of 15.5% and the S&P 500 average of 11.6%.

While PepsiCo has seen continued growth throughout its tenure in a nice steady growth pattern. The company is in its prime of its career and this should be able to carry the stock to high numbers for at least a decade. By investing now in Pepsi, the investors have an opportunity to see Pepsi rise by end of 2010.[4]