Alternative Beverage Industry – Paper Essay

1. What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain. The strategically relevant components of the global and U.S. beverage industry macro-environment are Market Size, Market Growth, Markets Segmentation, and Intensity of Rivalry.

Market Size:

The beverage industry serves an incredible large market. In 2009 alone, the beverage market consumed more than 458 million liters of beverage, resulting in over .

58 trillion in sales for the industry. Although there is a declining trend in the consumption of carbonated soft drinks in the United States, as of 2009, carbonated soft drinks still accounts for the lion share of the U.S. beverage market with 48.2% of the market; while bottle water and fruit juice account for 29.2% and 12.4%, respectively. The remaining market space was occupied by the alternative beverages segment, which includes sports drinks, flavored or enhanced water, and energy drinks with 4.

0%, 1.6%, and 1.2%, respectively

Market Growth:

While U.S. beverage market saw a decline of 2.1% and 3.1% for the years 2008 and 2009, respectively, due in large part to the economic recession, the global market dollar value as well as volume sales saw an increase year-after-year, from 2005 to 2009. The industry is expected to maintain a growth trend, with sales forecasted to reach approximately $1.78 trillion in 2014, as beverage producer enter new market and develop new types of beverages to accommodate the shifting consumer preferences—and capitalize on the growing and profitable alternative beverage segment.

Market Segmentation:

The global beverage market is categorized as carbonated soft drinks (soda), bottle water and alternative beverages, which includes sports drinks, energy drinks, vitamin-enhanced water, energy shots, and relaxation drinks. Sports drinks accounted for nearly 60 percent of alternative beverage sales in 2009, while vitamin-enhanced drinks and energy drinks were approximately 23% and 18% of sales in the U.S., respectively.

Scope of rivalry: There has been a long lasting rivalry in the carbonated beverage market segment between the two largest producers—PepsiCo and Coco-Cola. However, in the alternative beverage segment, other than Red Bull and Hansen Natural Corporation which also have international presence, most of the other sellers are specialty or regional brands, with distribution limited to a small geographic region.

2. What is competition like in the alternative beverage industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? Competition in the alternative beverage industry is low to moderate. Although there are many sellers, the high profit margin in the alternative beverage segment allows for everyone to earn respectable profit. In addition, the leaders, PepsiCo, Coca-Cola and Red Bull appear to understand the importance of maintaining the stability of the industry as a whole, as opposed to aggressively jockeying for individual strategic advantage at the expense of the industry. Although the five competitive forces in the beverage industry are quite favorable, threat of substitute product is the strongest force. This is evidence by the fact that branding and taste are the primary strategic differentiations in the segment.

Additionally, the cost of switching is undiscernibly low; and there were many substitute alternative beverages such as tea, soft drinks, fruit juices, bottled water and tap water, which made it easier for consumers to easily switch from one brand to another. The bargaining power and leverage of suppliers was the weakest competitive force because, with the exception of few rare ingredients, there are many suppliers available for producers to purchase ingredients from. Suppliers for packaging are also abundant. Even though substitute products had a bigger market share in the US, consumers bought more alternative beverages. This change in customer preference weakened the competitive power of substitute beverages. The threat of new brands varies by the development of each alternative beverage category. There is a low threat for mature categories and moderate to strong in young categories.

During the early stages of developing a category, when famous brand leaders had yet to be established, the threat of entry in alternative beverage categories was strong. This enabled consumers who did not have a brand preference to be attracted to new beverages and allow a quick gain in market share. Once brand preference is established, the threat of entry would is lower for all types of alternative beverages except energy shots and relaxation drinks. The proficiency among sellers of alternative beverages could be considered the strongest competitive force. Among the sellers of energy drinks and other alternative beverages competition among major brands is focused on brand image, taste, packaging, R&D, sales promotions, endorsements, and better access to shelf space.

3. How is the market for energy drinks, sports drinks and vitamin-enhanced beverages changed? What are the underlying drivers of change and how might those forces individually or collectively make the industry more or less attractive? As the industry experiences a saturation rate for all types of beverages in the mature markets (i.e. the U.S. and Europe), it is exercising great effort to enter new international markets . In fact, the industry is expected to gain a good portion of its future growth from consumers in developing countries. As a result, maturity of change in the long-term growth rate, industry consolidation and product innovation are all driving forces of the alternative beverage industry.

The annual rate of growth for the dollar value of the global market for alternative beverages was forecasted to decline from the 9.8 percent annual rate occurring between 2005 and 2009 to an anticipated annual rate of 5.7 percent – 2010 through 2014. While dollar value growth rates were expected to decline only slightly in Europe and Asia-Pacific, the annual rate of growth in the U.S. was projected to decline from 16.6 percent during 2005 – 2009 to 6.7% between 2010 and 2014. Product innovation is a constant force as the alternative beverage industry is continuing to create new ideas that give rise to new beverage industry categories and niches.

Drivers of change are unlikely to dramatically alter the attractiveness of the alternative beverage industry in the next 3-5 years. Even with a slowing economy, there is no indication that the larger producers such as Red Bull GmbH, Coca-Cola, or PepsiCo are prepared to compete aggressively on price for volume and market share gains. They will likely rely on product innovation and acquisitions to increase sales and market shares. However, the individual and collective effect of industry drivers of change can make the industry less attractive for unknown independent brands unless such companies gain an advantage in the industry.

4. What does your strategic group map of the energy drink, sports drink, and vitamin-enhanced beverage industry look like? What strategy groups do you think are in the best positions? The worst positions? The strategic group maps show the industry participants competing in scope of geographic distribution and brand portfolio breadth. It shows that beverage producers competing internationally with broad brand portfolios are positioned most favorably in the industry, because as the matured market saturate, and volume sale declines, the producers with international presence and capabilities will have the edge to enter into other international markets. Companies with a single brand and regional or national distribution only (i.e., Living Essentials, Vacation in a Bottle (ViB), Dream Water, or Drank) seem to be positioned most poorly in the industry because they are positioned as specialty or regional brand, which exposes them to the ebb and flows of market conditions of the economic condition or consumer preference of a narrow market.

The current level of competition makes it doubtful that small regional producers will survive over the long-term unless acquired by a large international bottler. 5. What key factors determine the success of alternative beverage producers? There are four factors that are necessary for competitive success in the alternative beverage industry. The first one is access to distribution, which is seen as the most important industry success factor due to the fact that most brands of energy drinks/alternative beverages cannot achieve good sales volumes and market shares unless they are widely available in stores, and there are also too many brands for all to be included on store shelves, especially in convenient stores who require placement fees. The second factor is innovating product skills. By definition, alternative beverages were different from traditional beverage; line extensions permitted entry to new categories.

The third one is name brand, which was also a critical factor in choosing a target customer demographic. The image which the brand represents and exemplified and emphasized in advertisements, endorsements, and promotions created a following and demand for one brand over another. Brand image was also a result of labels and packaging that alternative beverage consumer found appealing; small producers with poor image building capabilities had difficulty competing in the industry. Finally, sufficient sales volume to achieve scale economies in marketing expenditures is also an important driver. Successful alternative beverage producers were required to have sufficient sales volumes in order maintain marketing expenses at an acceptable cost per unit ratio.

6. What recommendations would you make to Coca-Cola to improve its competitiveness in the global alternative beverage industry? To PepsiCo? To Red Bull GmbH? Coca-Cola should go beyond a distribution deal with Living Essentials’ 5-Hour Energy drink, and instead, make a move to acquire it. Secondly, with only 10.2% of market share in the United States, as compared to PepsiCo’s 47.7%, Coca-Cola should focus on building strength in alternative beverage sales in Asia where it has a slight edge over its competitors. As globally established brand, and the market leader in the alternative beverage segment, PepsiCo is well positioned to maintain its market strength in the foreseeable future.

And with its global distribution capacity, PepsiCo should leverage its strength and aggressively enter new markets in Asia, South America, Africa and the Middle East before its competitors and or new entrants gets ahead of it. For its U.S market, PepsiCo should continue to maintain its market position by investing in R&D in order to develop new expand its product lines. As the energy drink market leader in the U.S. and the third-largest producer of alternative beverages worldwide and the number two seller of alternative beverages in the U.S. and Europe, Red Bull had notable performance for an independent producer. To maintain their competitive advantage, Red Bull GmbH should also create product line extensions to aid in the appeal of its brand.

Coca Cola Research Essay

3.3 Collect and review data using appropriate methods, including primary and secondary research techniques The researcher used the questionnaire method as his primary research technique. The survey questionnaire was adapted from a previous research done by an Advertising agency regarding effectiveness of advertising. This survey was then distributed online to a sample population within Metro Manila.

And the secondary research technique that was used was from the study of Mr. Honorata Ocampo Lee which is about Comparison of the effectiveness of the physical distribution processess and strategies of Coca Cola bottlers Philippines Inc.

and Pepsi Cola products Philippines Inc. in selected districts in Manila for the year 2001-2003.

3.4 Analyze and interpret appropriate qualitative and quantitative data Quantitative research uses a scientific approach; the researcher’s hypothesis which stated in his study will need to have an attempt in proving and disproving that hypothesis. The data that will be generated can be analyzed mathematically. (Primary and Secondary research) The researcher used questionnaire to Qualitative research is concerned with the opinions and feelings; the data that will be collected is not necessarily set of numbers.

It looks at the overall image rather than the separate components. (Primary and Secondary research) 4.1 Record findings in an accepted format and 4.2 Present and summarize the findings using suitable methods 1. Please open the link to view the ad material. Have you seen this advertisement before? http://www.youtube.com/watch?v=oiu9PcEyQ5Y? Among the 50 respondents, 40 percent (20 respondents) said yes and 60 percent (30 respondents) said they haven’t seen the advertisement yet.

2. How would you rate the overall quality of this advertisement? 40 percent of the respondents thought that the advertisement was good. 32% answered fair, 16% answered very good, and 12% answered excellent. None of the respondents answered poor. The data suggests that majority of the respondents thought of the advertisement as good enough or slightly above average.

3. How would you rate this advertisement compared with the others you’ve seen with familiar products/services? Majority (64%) of the respondents answered that the Coca-Cola advertisement was just “about the same” as other products’ advertisements. Meanwhile 20% answered that their ads were “A Little Better than the Others” and 8% thought that it was much better than the others. On the other hand 8% answered that the advertisement was a little worse than others. This data shows that, like the previous analysis, the Coca-Cola “Open Happiness” advertising comes across to the majority of the viewers as just average or slightly above average.

4. Are You Currently Using This Product

A majority of the respondents (86%) said to be currently drinking Coca-Cola meanwhile 14% claimed that they are not currently using Coca-Cola.

5. After seeing this advertisement, would you want to buy this product? A majority (95%) of the respondents were still determined to buy the product after seeing the advertisement and 5% said that they would not want to buy the product. Up by 9% from the people who claimed to not have been using Coca-Cola at the moment, the data shows that the advertising has given an impact only to a small amount of respondents to buy Coca-Cola. However, the data also shows that regular consumers are still willing to purchase Coca-Cola even though the advertisement did not come out that strong, as shown from the results in the second question.

6. Have you ever used this product?

The chart below shows that 100% or all of the respondents claim to have used or bought Coca Cola at one point in their lives.

7. Age

Among the 50 respondents, 30 (40%) were within the ages 18-25, 8 (16%) were 26-30, 12 (24%) were 31-35, 5 (10%) were 36-40, 3(6%) were 41-45, and 2 (3%) were 46-50.

8. Gender

The chart below shows that majority (68%) of the respondents are male and 31% are female.

4.3 Evaluate the methodology used and critically analyze the findings

The researcher used the Questionnaire method. This method was chosen because using a questionnaire with a random sample is a good way to find out the attitudes, thoughts, and behaviors of a large group of people.

The questionnaire that was used contained Close-Ended Questions. A set of choices was given to the respondents for them to be able to answer the questions. Aside from that, the researcher also chose to use Likert-Scales as this would be the basis to determine the level of effectiveness of the advertisements. Likert-scales consist of questions that would be answered by ranking them (Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree)

The method used would have been more effective if partnered with a select interview coming from each type of age group. The questionnaire method was proven effective in getting the opinions of the majority of the population. On the other hand, the interview method could have gotten more in-depth insights or feedback from the consumers regarding their opinion on Coca-Cola’s advertising and how it affects them as a consumer.

4.4 Propose recommendations based on the findings which identify and justify areas for future research

Through the years, Coca-Cola had always come out strong in their advertising materials. Good examples of it would be Coke’s “It’s the Real Thing” and “I’d Like to Buy the World a Coke” during the 70’s and 80’s. These advertisements have helped propel Coca-Cola into it’s status now as the number one beverage company in the world. However for this decade, Coca-Cola’s “Open Happiness” Campaign didn’t come out as strong as their previous advertisements. They haven’t been as visible to the public eye as before. As shown in the first question, a majority of the respondents haven’t even seen the advertising material of “open happiness” before.

This research has also helped prove that the advertising campaign of Coca-Cola now was rated just above average by the consumers. However, since Coca-Cola has managed to build up loyal consumers through the years, the statistics show that even though the advertising material may come out confusing or “just okay”, consumers will still continue to patronize Coca-Cola no matter what advertising material they produce. In spite of this, Coca-Cola should not be complacent with their current loyal customers. They should still invest in advertising campaigns that would appeal to their market. They should focus more on the younger generations as they are the group that is still trying to discover new products. Coca-Cola should be able to capture their loyalty for them to be able to sustain their position as the number one beverage in the world.

References

Questionnaires. (n.d.). Retrieved 2012 йил 30-March from Lets Evaluation Resources: http://www.shef.ac.uk/lets/evaluate/general/methods-collection/questionnaire#Why+use+questionnaires%3F Data Collection Methods. (n.d.). Retrieved 2012 йил 30-March from Fao Corporate Document Repository: http://www.fao.org/DOCREP/003/X2465E/x2465e09.htm#b8-6.3.3%20Interviews Primary and Secondary research. (n.d.). Retrieved 2012 йил 2-April from Design and Technology: http://hsc.csu.edu.au/design_technology/producing/develop/2662/primary.htm

Resources and Capabilities of Coca-Cola Essay

In the competitive corporate world it is very important for organizations to have a strategy. This strategy should be based on resources and capabilities that the firm has and also taking into consideration the opportunities that arise in the external environment enabling companies to achieve sustainable competitive advantage. (Grant, 2005). The company that I have chosen is Coca-Cola. The reason behind me choosing this company is because from my point of view, Coca-Cola has been a company that has always invested, upgraded and leveraged its resources and capabilities to be the most successful brand in the soft drink industry for more than 120 years.

According to Interbrand´s report on Best Global Brands, Coca- Cola has been ranked in the first position for the 13th consecutive years. Estimating its brand value at $77.8 billion and having a rise in 8% since last year annual report. (The New York Times, 2012).

Coca-Cola´s was discovered by John Pemberton, a pharmacist from Georgia, as a result of an accident, which has now become the most consumed soft drink in the world.

(The Coca-Cola Company, 2012). Around 1.7 billion of Coke products are consumed in a day. (The World Fact Book, 2012). Its portfolio of products range from the traditional Coca-Cola, carbonated soda water, bottled water, tea, sports drink and fruit juices, having over 3,500 products and brands. The company holds 275 bottling partners around the world; these companies are dedicated to produce, package and distribute most of the company´s products. The company competes in over 200 countries. (The Coca-Cola Company, 2012).

The resource based view is a framework that suggests that companies obtain competitive advantage by focusing on strategies that exploit their internal strengths by responding to the external opportunities and trying minimize external threats and internal weaknesses. (Barney, 1991). The advantage of this model is that the firm can consider factors that are within their control. (Connely, 2010). Moreover, this model has two assumptions in analyzing resources. The first one is that the firm is heterogeneous to the strategic resources they control. The second is that resources aren’t perfectly mobile across firms and thus heterogeneity can be long lasting. (Barney, 1991).

Before talking about Coca-Cola´s resources and core capabilities it is important to understand the difference between these two. “Resources are the productive assets owned by the company, capabilities are what the firm can do well. Resources can be classified as three types; tangible resources, intangible resources and human resources.” (Grant, 2005, p. 136-137). Authors such as Teece and Pisano (1997) suggest that an organization has to always renew and recreate its resources to meet the needs of changing environments. They are three basic types of dynamic capabilities the ones sensing opportunities and threats, the ones concerning seizing opportunities and the ones concerned in re-configuring the capabilities of an organization. Dynamic capabilities can take various forms such as recruitment and management process, major strategic moves, such as acquisitions and alliances.

Tangible resources are physical and financial resources that can take a variety of forms. These assets and capabilities determine how efficiently and effectively a company performs its functional activities”. (Grant, 2005, p.139). To determine if a company has a strong financial position financial analyst tend to evaluate in general the gross profit margin, operating margin, ROA and ROE ratios. The Coca Cola Company has a very strong financial position, its sales were $46.542 billion, its gross profit margin in the year 2011 was 60.86%, 2010 it was 63.86%, in 2009 it was 64.22% meaning that the company has been consistent in their efficiency of manufacturing and distribution during the production process. (Google Finance, 2011). The operating margin in 2011 was 23.06% and 2010 it was 39.13%.

The margin is the measure of the proportion of company´s revenue left after deducting variable costs. The margin has been consistent which means that the company is always trying to maintain its variable costs. The ROA is the indicator of how efficient a company is using its assets to generate earning. In 2011, Coca-Cola´s ROA was 10.17%, during this year the management was less efficient at using its assets but during last few it has been quite efficient. In 2010 it was 16.19%; in 2009 it was 14.02%. The ROE from last year has dropped from 28.17% in 2010 to 17.73% in 2011, even though the company is trying use less shareholders equity to produce profits. (Coca-Cola´s Annual Report, 2011).

The physical resources that Coca-Cola owns can be classified into building, equipment and their bottling partners. The buildings account for $ 5.24 billion, the property, plant and equipment account for $ 23.15 billion. The distribution of the drink is done through 275 bottling partners. The bottling partners manufacture, package, merchandise and distribute the finished branded beverages. (Coca-Cola´s Annual Report, 2011).

The intangible resources tend to contribute more than tangible resources. They can be classified as; intellectual property, resources for innovation and reputation. (Grant, 2011). One of Coca-Cola´s most valuable intangible resource is its secret formula. The company tends to sell concentrated syrups to their bottling partners, who then use the syrup to produce the final product. This means that the company does even share their secret formula with its bottling partners. (Coca-Cola´s Annual Report, 2011).

According to Coca- Cola another intangible resource that they own is their technology and the know-how. They related this technology to the “Company´s products and the processes for their production, the packages used for our products, the design and operation of various processes and equipment used in our business and certain quality assurance software.” (Coca-Cola´s Annual Report, 2011, p. 9).

An intangible asset that Coca-Cola owns is its “Goodwill”. The goodwill can be classified as the strong brand name, good customer relations or good employee relations. (Investopedia, 2012). In 2011 Coca- Cola´s good will accounted for $ 12,219. The company performs impairment tests of goodwill at geographic operating areas. The operating areas are: Eurasia and Africa, Europe, Latin America, North America and Pacific.

Coca- Cola´s brand loyalty and recognition can be considered as Coca-Cola´s most valuable intangible resource. Every day 1.7 billion of coke products are consumed in a day, more than 60% of the of the world´s population have a Coke drink in a day. (Market Line, 2011). Moreover, the red and white logo is recognized by 94% of the world´s population. (Business Insider, 2012).

The Coca-Cola Company had 146,200 employees worldwide in the year 2011, respectfully called associates. The Company always tries to keep their employees engaged by motivating and indulging responsibility in projects. Their work place includes on site company gym, free Coca-Cola drinks, summer and flexible working hours. Training and development also plays a big role, they continually invest in employee development plans, internal talent management, leadership development for managers and employee performance management. They also tend to reward their employees by different elements such as pension, health care and additional holidays.

Once analyzed Coca-Cola´s tangible and intangible resources I now proceed to analyze their core competence and dynamic capability. Core competence can be defined as “the linked set of skills, activities and resources that, together, deliver customer value, differentiate a business from its competitors and potentially can be extended and developed”. (Johnson et al, 2011, p. 89).

Coca-Cola´s major dynamic capability is large investment in marketing. In 2011, Coca- Cola spent $ 3.3 billion on advertisement. (Google Finance, 2011). Their marketing programs are developed to “Think Globally, but act locally” designed to enhance more consumer awareness and product appeal for customers. The company tends to differentiate its marketing strategy in developed markets and developing markets. In developed markets is objective is continue having growing profits and in developing markets its objective is to increase brand value. In emerging markets they invest in brands and infrastructure programs to give access to the consumers to the product. In developed markets they invest in making the product affordable, good communication with its customers and differentiation within its products. (Coca-Cola´s Annual report, 2011).

Another core competence that enables the company owns to gain competitive advantage is their distribution and bottling operations. Most of their products are “manufactured, sold and distributed by independently owned and managed bottling partners”. (Coca- Colas Annual report, 2011, p. 32). The company owns nearly 275 bottling companies, distributing their products in more 200 countries. Three most known bottling companies are Coca-Cola Hellenic, Coca-Cola Femsa, and Coca-Cola Amatil. Coca-Cola Hellenic distributes in 28 European countries. In 2011, 46% of the unit case volume of Coca-Cola Hellenic consisted of Trademark Coca-Cola Beverages.

Coca-Cola Femsa is a Mexican company covers most of parts of South America. In 2011, 62 percent of the unit case volume of Coca-Cola FEMSA consisted of Trademark Coca-Cola Beverages. Coca-Cola Amatil covers Australia, New Zealand, Papua New Guinea, Fiji and Indonesia. In 2011, 45 percent of the unit case volume of Coca-Cola Amatil consisted of Trademark Coca-Cola Beverages. According to Coca-Cola the ownership of bottling companies helps them reduce costs and make the product more available throughout the world. In the next five years the company has committed to invest $30 billion in their bottling companies. (Coca-Cola´s Annual Report, 2011).

Coca-Cola´s innovation in products can be classified as one of its most dynamic capability. They always try to “recreate and renew” their products. The company holds around 500 products. (Coca-Cola´s Annual Report, 2011). Their innovation philosophy is “70/20/10”. They invest “70 of their resources in existing products, 20% in innovations related to existing products and 10% in pure innovation. (Forbes, 2012). The newest products launched into the markets are mini cans of 7.5 ounces and has only 90 calories. Another new product is Sprite Green, naturally sweeten Truvia, every 8.5 ounce serving has 50 calories and 5% lemon juice. (World of Cola, 2012).

Once analyzed all of Coca-Cola´s resources and core capabilities, the next step is to use the VRIN model, which consists in externally analyzing the firm’s resources and dynamic capabilities to see if these are useful to generate sustainable competitive advantage. VRIN stands for Value, Rarity, Inimitability and Non-Substitutability. (Barney, 1991). Nevertheless some authors such as, McEcily and Chakravarthy (2002), believe that the framework lacks semantic logic that account for characteristics that impede certain activities in the firm at the same time enhancing others.

The value of resources can be determined if they can give a company competitive advantage at a cost that it allows the organization to have acceptable profits. (Johnson et al, 2011, p. 89). In case of Coca-Cola the company is very innovative this makes them the market leader. It always takes advantage of new market trends to develop new products and gain competitive advantage. In 1892, they were the first ones recognize about the change that consumers were getting more health conscious and introduced the Diet Coke, a low calorie beverage, which since then became the world´s top-selling low-calorie soft drink. (World of Coca-Cola, 2012)

In terms of Rarity, rare capabilities are those that no or few firms posse. (Johnson et al, 2011, p. 89).According to Coca-Cola their brand value, brand loyalty and brand recognition are capabilities that no other firm holds in the industry. As stated before, their brand value is estimated at $ 77.8 billion and their logo is recognized by 94% of the world population. They have been holding this capability since many years which drives them sustainable competitive advantage. (Coca-Cola´s Annual report, 2011).

Coca-cola resources can also be classified as inimitable. Their distribution system and bottling companies are so widely spread throughout the world, making their products available to customers everywhere at any time of the day. It is really difficult for companies to have such wide distribution network as the costs would be really high for a new firm trying to do this. (Forbes, 2012)

Moreover, their secret formula of making coca-cola is considered as non substitutability resource. This is because it hasn’t been discovered by any other soft drink company. Even thought there are substitutes available in the market none of them meet up to Coca-Cola´s taste or standard. (Coca-Cola´s Sustainability Report, 2011)

In conclusion, Coca-Cola´s history, brand equity, people, distribution network, secret recipe, etc. are resources that are difficult to imitate, while being extremely valuable. The company constantly works to gain competitive advantage by developing healthier products as consumers are becoming more health conscious and by having big investments on marketing programs to have more consumer engagement. Even though Coca-Cola´s strategies and competitive advantage are extremely sustainable the company can face competition from healthier and more environmental friendly firms, which the company is trying to tackle by implementing the 2020 vision.

The 2020 vision has 5 long-term objectives. The first one is energy conservation/climate change which consists in reducing by 15% carbon footprint. Second, sustainable packaging/recycling makes their packaging 100% recyclable. Third, water stewardship which consists in establishing a water sustainable operation in which they minimize the use of water and have neutral water impact on the local communities where they operate. The Fourth is product portfolio/wellbeing, they intent to provide healthier beverages for every lifestyle and occasion. Fifth, diverse and inclusive culture consists in creating a better work place to work every employee with a wide diversity of culture.

Case Study Zumo Essay

You will notice during your reading that some of your recommendations offered during the debriefing oh our oral presentation have not been met, including the change of our logo. This reflects in any way an act of negligence or a lack of rigour. Indeed, we are convinced by some of our ideas, so we prefer to develop you them so that you join there rather than suppress.

Hope you like it, enjoy your reading.

Sincerely,

Laurie and Emilie.

Zumospa would like to make Zumo a global brand; the company needs to reposition Zumo for the international market.

Zumospa would like to launch a global campaign focussing first on South America, Mexico, The Southern states of the US and Japan, where they have regional offices.

Zumospa is a food and drink company based in Valencia, in Spain. Zumo is the best-selling sports drink in Spain. In the last financial year, Zumo contributed €30 million to Zumospa’s annual sales revenue, accounting for 20% of the company’s total turnover, and 4,5 million in profits.

It is Zumospa’s cash cow, generating more revenue than any other of its products. The drink contains vitamin and a secret ingredient: “herbora”, made from roots of rare African plants. Scientific studies results about its formula and proved that the body absorbs Zumo faster than water or other soft drink. Zumo offers four flavours: classic, light, kiwi and strawberry.

Zumo is now sold all over Europe. It has a large channel of distribution: the drink is distributed mainly through grocery stores, convenience stores, and supermarkets, also through sports clubs. Sales generated through contracts with professional leagues, such as football, golf and tennis associations. Press, TV and radio advertising is backed up by endorsement contracts with famous European footballers and tennis stars. Which is a pity; it’s that this drink is sold only in Europe. Such a success deserves to be applied internationally.

The sports drink market is the most rapidly growing segment of the world beverage market. The market is very competitive, with major companies such as Coca-Cola, Pepsi Cola another fighting for market share. We can expect an Entry Barriers from the existing market on each country.

Product strategy: Zumo’s new face

Even though Zumospa has been going well in Spain, if we go and run a business with the same brand name “Zumo” and similar image to the USA, Mexico, South America, and Japan, it would be possible to make the countries rouse antipathy. The reserve for the foreign products is increasing. Initial research suggests that Zumo is perceived, as a Spanish drink, and its close identification with Spain may not be suitable when developing a global brand. We will discard old perspectives towards the markets, especially when we expand our services or products to international market, which have different cultural foundations.

An energizing drink is a drink that gives a renewal of energy to the consumer, not to confuse with an energy drink dedicated to the hydration of the sportsmen. In most case, an energizing drink contains a concentration rather high of caffeine and sugar then, according to the specific receipt of each product, of the extracts of plants like the guarana or the ginseng and various molecules like the bull-fighting one, of the vitamins B, the arginine, creatin, etc.… As we know, Zumo just contain vitamin and African plants, and scientific have recognized the energy inputs of natural products used. We believe it’s important to emphasize this point, which represents a competitive advantage of the products to its competitors. That’s why we propose several solutions to refresh Zumo, and highlight the brand’s values. In addition, for a brand to be global, its logo, name and slogan must be recognized and perceived like a familiar for all people. We invented a new name, logo, slogan and packaging for the drink, in order to anchor a positive image of the brand in the minds of consumers.

Talking about consumers…

Zumo is positioned as an energy product for fitness conscious people, especially sportsmen and women between the age of 20 and 35, and even the older athletes. We succeeded in Spain with this target market and we will continue to maintain it in international market. The scope of the drink matches these consumers. Athletes support the values of the beverage, recognize its qualities. They represent our main target. But our customers can extend far beyond sportsmen. Indeed, people are concerned more and more about health, and pay attention to the ingredients contained in what they eat and what they drink. We can expect to receive more in addition to consumers through the properties of the drink.

In order to stretch our consumer panel, the drink will be offered in different version, like in Spain, where the drink is proposed with kiwi and strawberry. A version of the drink sugar-depleted will be deployed in each country. With regard to the different fragrance (cherry, mint, etc.) depending on the country concerned by this development. But before that, it’s necessary to perform a complete redesign of the brand, to give an image more correlated with the drink’s values.

A new name, for a new fame

The name Zumospa is focused as a Spain brand, to Spanish language. It’s clearly a household name. It’s necessary to reinvent it, for a more international name. This name must be euphonic, easy to pronounce and memorize. Zumospa is a Spanish product; it means the fruit juice in Spanish. 
In Spain, this product is much known, but not in the other countries because it is only sold in Spain. 
We so had to find a new name, so that he must be significant for all that is why we chose the English language, it is going to give a modern and young tone. And especially all the consumers and the future consumers will understand it NED

Natural Energy Dring
NED
Natural Energy Dring

The new name has to express the benefits of the product, that it represents the drink, a powerful, energetic name and especially that it shows highly rated natural of this energy drink. We had found several names as for example: Strong Jet, Big Torrent, NED or TORERO. Having hesitated a lot, we selected NED (the Natural Energy drink), it is very simple because it is the definition of the product but it is particularly easy to pronounce for the most part of country, it is short and precise. It is also necessary to respect the administrative formalities; we shall thus have to register the name of our product to protect it from any copy, to WIPO (the World Intellectual Property Organization

A little makeover

It exists on the market of the drink big competitors as Pepsi, Coca Cola but especially on the market of energy drinks as Red Bull. In order to compete against big competitors like Pepsi and Coke, especially Red Bull, and reshape the image of the drink, we think we should redesign the logo. The current image is too simple, too Spanish and cannot create strong impressions in foreign customers.

Pepsi and Coke have been known as calorie products while nowadays more and more people are paying attention to healthy product. So we will focus on marketing that Zumo is energy drink with low gas, glucose and with natural ingredients. That’s why, in the logo, we have combined the Hulk’s arm with a small daisy. We wanted to show it in the logo so that the customers realize of highly rated natural of the product

To represent the energy values of the drink that brings strength and force, we used the Hulk arm that represents, in our opinion, an icon of physical force. To show that this strength comes from the earth, we combined with this image of a small daisy, reminding the natural aspect of the drink. The particularity of this logo is the contrast between the powerful arm and the delicate flower, held in his hand. In addition, the colours are sparkling and strongly recall the ecological context (green, yellow, white). The specificity of the image will allow that it’s permanently implanted in the mind of the consumer.

After the logo, we have decided to occupy us of the slogan. We thus needed a small sentence, which represents the logo but especially the product. As we used Hulk as image of Zumo, we decided to stay in this spirit of great powerful, but natural strength. Having thought a lot we have chooses ” Great Get the Natural Strength “. Obtain the strength by drinking our drink, a strength nature but very powerful. We thus used play on words to insist well on the natural fact of the supernatural product and the strength of Hulk.

And a suitable outfit

Our main target being athletes, as well as all active people, we decided to adapt the new packaging for their needs. In addition, it breaks the image of the current energy drink, full of chemicals. Indeed, all competing drinks, except one, offer their beverage in cans.

That’s why we will propose a new contain: plastic bottles. Available in different format, from 25cl to 50cl, these contain enables easier transport of the drink. Whether in a gym bag or a handbag, an open can can no longer store while the bottle is reformed indefinitely. The bottles will have a stopper teat, making usage more convenient and less risky for active people moving constantly.

The bottles will be made with a green plastic. It can be recycled and reused to reduce the impact of waste on the environment. Indeed, it’s impossible for a company promoting ecologic values to neglect the growing concern of consumers for ecology.

Position

We should reshape specific identity and directional characteristics of Zumo as a sports beverage. Choose gorgeous designs and intense colours to lay an emphasis on the image of the silver generation who care about their style and intend to the luxurious life style.

The price will be about 2£ because we have made decision that our targeted customers is ready to pay for a high quality product. They could be willing to pay for the product, even it could be expensive. Moreover we made a decision to the price, which is higher than other competitor’s products to posit high quality to consumers.

What else?

We can expect a real success for the introduction of the drink worldwide. We will have to monitor the results of the campaign and the strategies put un place. Subsequently, other operations will need to be considered to maintain the reputation and the dynamism of the brand. E already thought of some actions.

For example, it would be interesting to create versions derived from NED: a line of bottle for girls, a light version, as well as other flavours (strawberry, peach, etc.). Proposed perfumes will vary depending on the country in witch the drink is sold. Each of them may have different preferences in terms of taste, so it will be necessary to adapt to their habits.

Communication strategy

We can lead international marketing campaign as a successful case by selecting specific target layers and using effective promotion routes.

Media

Firstly, advertising is known as the first step to introduce our product to foreign market We use one method: Innovative advertising, marketing around the world. We are planned to do promotion by teaser ad, outdoor billboards, and sampling party. Our creative team knew create us some very interesting sketches. We could do teaser ad, which are easy to see around us as a promotion method to attract customer’s interests and attention. The location to publicize will be a rush place.

Our views will be present in many places: Using outdoor billboards, especially at bus stops, buildings, fitness centres, and on the newspaper, magazines and so on.

Hors media

The world is waiting for London 2012 Olympic and I think this will be a good opportunity to advertise our products by sponsoring. Olympic always attracts everybody all over the world. If we sponsor Olympic, our product will appear frequently and it will create strong impression in foreign customers. When athletes use our products, our prestige will be consolidated and many people will want to try our products.

We going to take advantage the Olympics games for doing the global launched of the new brand, new product line and new image (logo), supports of advertising in media. We are supposed to hold a sampling party. For example, we are scheduled to a sampling party at the fitness centre, which is a lot of members, since we could expect to get people to attract. Also, it could be a good way to inform the new brand.

Apply to be official sponsor at next Olympic Games. It’s a great chance for us to publicize our new brand. Olympic Games are the biggest sports event that sportsmen and women all around the world look forward to. We could contract an ad with famous footballers, tennis players, and athletes.

Coke vs. Pepsi: An Economic Analysis Essay

Executive Summary

In this case study we will do an economic analysis of two major competitors; Coke® and Pepsi®. We will look at the history of these to competitive giants and discuss how they have evolved over the years to become rivals in the 21st Century. In this case study we will also look at the supply and demand of each company’s products. Coke and Pepsi are not only in the beverage business they have branched out into other arenas to continue being the leaders in their market.

Both companies do business all over the world; we will also look at how they size up internationally as well as nationally. We will look at production and cost in the short run and long run by analyzing each company economically.

Each company has forecasted where they will be financially in the 21st Century and in this analysis we will calculate if they have forecasted close to where they are today. Management is a big part of the success of large firms such as Coke and Pepsi so we will look at the management styles of each one.

By looking at management will analyze the strategic decision making of each firm and note any issues they have had in the past or present with upper management. Finally strategic decisions in oligopoly markets with regards to profit maximization is vital to the firm and the shareholders alike, we will analyze those strategies as well.

After reading both of these competitive giants’ histories it is clear to see they are both trend setters in their own rights. Coca-Cola® was being formulated in Atlanta in a pharmacy and selling about 9 drinks a day to now selling over 1 billion servings of Coke products a day. With Coke the product has always been an advertisement junkie from its beginnings when the founder put the Coca-Cola name on everything to now having global ad campaigns. Pepsi has also been a media giant and has soared in the market because of its huge ad campaigns. Pepsi has been known to use mega stars like Michael Jackson and Brittney Spears to be spokesmen for the brand which has been a big success over the years. Both Coke and Pepsi have evolved and changes in look at take over the years. Coke in the early 90’s tries to change the formula to New Coke and was soon back to what is known now as Coca-Cola Classic®. Pepsi has also tweaked its formula only to revert back to the original.

Both of these companies have many many brands and brand extensions. The competitive nature is apparent in each of these companies and will continue on. Coca-Cola seems to have a slight lead in the market and has always been a leader but not by a landslide Pepsi is always running close behind. There is both loyal Coke and Pepsi customers and some who enjoy both products and go back and forth. Coke has many brands like Minute Maid, Vitamin Water, Aquafina, Sprite, and many more. Pepsi also has many of the same or similar brands like Tropicana, Sobe Life Water, and more to coincide with Coke. Brand extensions are very important in the success of these companies. Pepsi Cola and Coca-Cola were both started in the late 1800s by pharmacists in the south Pepsi in N.C. and Coke in GA. Pepsi Co was formulated in a merger with the Frito Company which became Frito Lay. Brands like Frito Corn Chips and Lays Potato Chips and Pepsi together were formed in 1965.

Though apart Frito was started in 1932 and Pepsi in 1895. This 1965 merger began a lifelong relationship and successful partnership. Doritos emerged in 1965 adding to the success and Pepsi enters Japan and Eastern Europe as well. In the 70s Pepsi acquires things like Pizza Hut and Taco Bell, which adds to the brands solidity and its market value. Looking at these companies financially is where you can see how they stack up against each other. Coke has a good positive outlook on the future. Pepsi also has a good outlook on future endeavors in the US and abroad. Coke being a huge international company brought in $27.8 billion of net operating revenues from operations outside the United States. (United States Securities and Exchange Commision, 2011) Coca-Cola also created 4,700 jobs in 2011 in the opening of the Great Plains Bottling Company in the US. These leaps and bounds made by Coke are nothing abnormal it is a huge marketer.

One big issue for both Pepsi and Coke is water scarcity and that most likely will have an effect on the companies’ productions costs which are in turn passed on to its consumers eventually. Coca- Cola is concerned with the water scarcity issue and reports I its 10-K filings that the water sustainability problem will more than likely have an effect on the company and reposts this, ”from overexploitation, increasing pollution, poor management and climate change as the demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, our system may incur increasing production costs or face capacity constraints which could adversely affect our profitability or net operating revenues in the long run” (United States Securities and Exchange Commision, 2011) The PepsiCo Company faces the same type of troubles when it comes to externalities. The negative effects of these externalities will take a toll on the profits of all bottling companies since they will have to begin to develop ways to be productive without corrupting its external environment.

In India drought has made water a scarcity and some of the blame is being put on Coca-Cola Bottling Plants in the area. In a village in India protest caused a $25 million a year plant to shut down. Some protestors say “drinking Coke is like drinking a farmer’s blood” Groundwater is not the only problem reported high levels of pollution have been reported as well and sludge fertilizer offered to farmers as a peace treaty high in levels of cadmium-laden in the sludge fertilizer. Protestors say why they would do that and nothing about depleting water, Coke responds that those accusations have no merit. (Ehl, 2011) PepsiCo has had the same bad reputation for depleting water resources around the globe.

Coalitions like Council of Canadians and Food and Water Watch work to ensure the food, water, and fish we consume is assessable and sustainable. They also make sure the government does its job at protecting those resources as well. In conclusion Coke and Pepsi are both equally competitive and equally challenged with today’s problems. Seeing the value in both of the companies is easy they have both been models for the beverage market and for the world market alike. By looking at the history of the companies it is clear to see they run neck and neck with on another.

I think going forward with the companies that there has to be greater concern for the world economics and water depletion is part of that economical problem. Learning new ways to safely produce the products in areas that have an abundant supply of resources is the key to success here. Investing in the research and development of safe ways to bottle is on the forefront of both of the bottlers’ agendas. These are two extremely successful companies that have been around for over 100 years they are not going anywhere anytime soon.

Works Cited
Ehl, D. (2011). Coca-Cola Charged with Groundwater Depletion and Pollution in India. Centerville: Earth Talk. United States Securities and Exchange Commision. (2011). ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES. 10-K Filings , 12-13.

Coca Cola Internal Analysis Essay

Executive Summary Coca-cola Company is leading manufacturer, distributor, and marketer of non alcoholic drinks in the United States of America and all over the world. It is a multinational Giant company that has market presence in almost all countries of the world. The company has also diversified from its initial soft drinks to manufacture fruit juices and other non-soda drinks. Its objective has been to maintain its global leadership in supply of beverages and other non-soda drinks through maintaining high quality production methods that ensure the name and products remain a household brand.

Introduction Resource based view approach has been a method most managements have used to formulate their companies’ strategies (Barney, 1991).

This is because Resource Based View regards a company’s internal environment rather than the external environment. The advantage of using internal environment as a source of strategy formulation is that the company is able to consider factors which are within its controls; which constitute its strengths and weaknesses (Connely, 2010).

This paper presents an internal analysis of Coca cola Company with specific regard to the Economic value of the company, its resources and capabilities that make it distinct from other companies giving it competition through provision of similar soft drinks. Economic value Added In 2010, The Coca Cola Company posted an increase in revenues as compared to the previous year. The profits came to $6.48 billion. The cost of capital for Coca cola Company is estimated to be 8.7% and the capital totaled $72.929 billion. Ensuing is the EVA calculation for the company. Net Operating Profit After Tax (NOPAT) – (capital * cost of capital) = 4.08 – (72.929*.087) billion. This comes to $0.2 billion. The company’s EVA comes to $0.2 billion.

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 company’s 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 Company’s 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 company’s 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. Distinctive capabilities Coca Cola Company enjoys distinctive capabilities that enable it to carry out productions in a manner that is superior to other competitors. Distinctive capabilities that Coca Cola Company has are Innovation, reputation, and architecture. The company has been able to introduce new products into the market.

This has been a major competitive edge over the competitors since they lack the innovation capability to come up varied new products. Its production methods and the ingredients mixture have remained a strong contributor to the unique and high quality products that have enabled the products enjoy a superior status over the competitors’. The company has also managed to command strong reputation in relation to its competitors. This reputation has earned it goodwill and ensured that it remains a favorite brand among the consumers. The company’s architecture plans ensure that the company daily running is congruent with the objectives. The company has instituted a structure system where it outsources product distribution from individual distributors and this has enabled it to manage its operations without dealing with many market dynamics.

Conclusion

An analysis of the Coca Cola Company’s internal analysis through considering the Resource based View provides insightful knowledge on the company’s management practices with regard to strategy formulation using the internal environment approach. The company should therefore keenly look into the areas of internal environment as this is where much strategy formulation ought to originate. The company will continue to be a global leader in supply of non-alcoholic beverages because it has successfully employed the use of its internal analysis to formulate successful strategy. It will however have to improve on its sluggish performance in northern America which is its major market. The internal resources and capabilities of Coca-cola Company will continue to provide a secure foundation for formulation of long term strategy and ensure it maintains a strong reputation.

Rerences

Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management , 99-120. Comeford, R., & Callaghan, d. (2011). Environmental, industry, and internal analysis. London: Prentice Hall. Connely, D. (2010). Strategy for Internal Environment. Power point presentation. Edvinsson, L., & Malone, S. (1997). Intellectual Capital:Realizing Your Company’s True Value by Finding its Hidden Brainpower. New York: Harper Business. Henry, A. (2007). The Internal Environment of an Organization. London: Oxford University Press. Lawton, K. (2006). Swot analysis: A management Strategic Success Tool. New York: Cambridge. Szulanski, G. (1996). Exploring Internal Stickiness:Impediments to the Transfer of Best Practices within the Firm. Strategic Management Journal , 27-44. Zahorsky, D. (2009). A business owner’s Secret Weapon: Swot analysis. New Jersey: Mc Graw Hill.

Coke as Cleaning Agent Essay

Trademark Facts

Coke is known for being the most recognized trademark in all of the world, boasting a near 94% brand recognition by the world’s population. One contributing factor to this statistic is a long-term partnership with the Olympics. This partnership began at the 1928 Summer Olympics in Amsterdam. In 1983, Diet Coke was launched in Australia and within 12 months became the number two soft drink of choice in the country, after Coke. Coke also boasts over 500 brands and more then 1,200 bottling plants in various parts of the world.

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Consumer Facts

According to CokeFacts.com, it is estimated that nearly 10,450 soft drinks from Coca-Cola are consumed every second of every day. Ten bottles of Coke on average were consumed during the first year that Coke was distributed. In 2009, it is estimated that more than one billion servings are consumed every single day.

Cooking Agent Facts

Coke can also be used in different cooking situations.

Many people will pour a whole can of Coke into a baking pan and then wrap up the ham or other meat of choice in aluminum foil. They will then bake the ham while it is resting in the pan filled with Coke. It is said to produce a very moist ham once it is all done.

Cleaning Agent Facts

Surprisingly, Coke can be a great cleaning agent as well. It can be used to clean corrosion off of car battery terminals, to loosen a rusty bolt or help to remove film off of your car windshield. One of the most bizarre uses for Coke is to use it as a cleaning agent for the toilet. Supposedly, you can pour a can of Coke into the toilet, let it sit for several minutes, and then flush the toilet. The result: a clean and functional toilet.

Read more: Facts About Coke | eHow.com http://www.ehow.com/about_5409773_coke.html#ixzz2K5itRtDt

Relative Density Essay

Abstract

The experiment about relative density is composed of three different activities. The first activity is about the Displacement Method for alloy, the second activity is about getting the density of a bone and the third activity is about Regular versus Diet Soft Drinks.

1. Introduction

Relative density is the ratio of the density (mass per unit volume) of a substance to the density of a given reference material. The theory or the principle that we used for the experiment is the Archimides’ Principle which states that any fluid a buoyant force to an object that is partially or completely immersed in it; the magnitude of the buoyant force equals the weight of the fluid that the object displaces.

In the experiment we used different formulas. For activity 1 (g) mass of the substance which is Aluminum, (cc) initial level of water, (g/cc) for the experimental value, magnitude of buoyant force [pic]= Wfluid which is weight of displaced fluid. For activity 2 we used formulas for getting the relative density of the bone.

For experiment 3 we used formulas like

2. Theory

Activity 1: Displacement Method for Alloy

The Aluminum bar was weighed and its mass was recorded. Some water was placed into a graduated cylinder and the initial water level was recorded. The Aluminum bar was placed inside the cylinder and the new water level was recorded. The volume of the Aluminum bar was computed by subtracting the initial water level from the resulting water level. The density of the Aluminum bar was computed by dividing its mass by its volume. The calculated density was compared to the standard density (2.7 g/cc) and the % error was taken.

Activity 2: Density of a Bone

A piece of bone was weighed in air and in water, each reading was recorded as the “weight of the bone in air” and “weight of the bone in water” The Relative Density of the bone was then computed by using the formula given. The density of the bone was then computed by multiplying the Relative density of the bone to the density of the water. The status of the bone was identified by referring to the WHO ‘s definition of the diseases a bone can have relative to its own density.

Activity 3: Regular versus Diet Soft Drinks

The weight of an empty pycnometer, the pycnometer filled with water, pycnometer filled with regular coke, pycnometer filled with coke light, and pycnometer filled with coke zero. The relative density of regular coke, coke light, ad coke zero was computed by using the formulas given.

4. Results and Discussion

Table 1 show the results from activity 1, table 2 for activity 2 in activity the finding is that the bone has osteopenia it is or low bone mass because the density of the bone is within 1.0 to 2.5 and table 3 for activity 3.

Coke/Pepsi Swot Analysis Essay

Strengths:

1. In 1993 Coke held a 59% share of the fountain market—using it to promote the brand further. 2. Coke earned a high percentage of its profits in the international market. They established themselves with the help of “ ‘anchor bottlers’—large, committed, and experienced bottling outfits like Norway’s Ringnes and Australia’s Amatil” 3. During WWII Coke was able to establish itself in the European and Asian markets with the help of the government because it was being sold to the American troops in those regions

Weaknesses:

1. Coke’s imagine could not compete with Pepsi’s “Pepsi Generation” campaign because it was perceived as being one of small town and outdated 2. Business relationships with bottlers have not been standardized 3. Carbonated drinks faced completion of “new age” drinks.

Opportunities:

1. Quick response to “new age” beverages with the introduction of PowerAde, Nordic Mist, Tab Clear and its partnership with Nestea. 2. The potential growth of the international market of 7% to 10% per year (Eastern Europe, China India) 3.

Overhauling image to target the youth market

Threats:

1. India’s government requesting that the formula be disclosed to them 2. Pepsi’s marketing campaigns like the “Pepsi Challenge” & the “Pepsi Generation” 3. FTC looking into the franchise territory agreements

Pepsi:
Strengths:
1. Aggressive and innovative marketing campaigns
2. Acquisition of restaurants
3. Introduction of 13 new products
4. Michael Jackson as a celebrity endorser
Weaknesses:
1. Carbonated drinks faced completion—“new age” drinks
2. Youth was main target group
3. Lack of presence in the international market
Opportunities:
1. Acquiring Seven-Up’s international operations
2. Acquired bottling operation systems
3. Response to growth in the Tea market –partnership with Lipton Threats:
1. Coke’s quick responses to all marketing strategies
2. Market focus was strongest in North America/too little international focus
3. Private label phenomenon in supermarkets

Financial Analysis Coca-Cola and PepsiCo Essay

We will be comparing two companies; both are strong and have great credibility. Ideally with a solid competitor we want to show differentials and make a solid contrast. In this case we want to compare at least two years of financial data. A great way to exemplify this is to compare Coke to Pepsi. To say which one is better to drink is debatable, but what we are looking at is which is better to invest in. We will analyze the information provided in the appendixes and make a conscience decision as to which company is stronger, therefore a smarter investment choice.

After all, I wouldn’t want you to throw your money down the drain. The three main characteristics used to determine a company’s success are liquidity, solvency, and of course profit. The aspects, when analyzed, can help you decide which is more successful and financially honored as a better investment.

This can also help someone decide which is more successful and financially stable.

While we look at these statements I would like to keep in mind how good it is to look at trend over time. This opens our next concept which is vertical and horizontal analysis. By taking a step back and going over the ratio analysis which is composed of the three main characteristics, we are able to see what has happened during the time period we compare with. Hence us making our intelligent investment decision. Going back, ratio analysis is where we divide two numbers in order to get a percentage which we will compare to the competitor. First characteristic is liquidity. This is where we see the company paying their debts, and on time. This is very similar to an individual person’s credit score. Are they paying their bills?

This shows financial responsibility and that is a very important component in investments. The information is typically shown as a ratio or percentage of the liquid assets. The higher the ratio the bigger the safety margin is in which the corporation will fulfill their debts. You wouldn’t rent a home to someone with bad credit. Nor would you loan someone money if they had a bad tendency to not be responsible with money. Going back to business mind state, we can look at the potential ability to turn a good or service into profit. This is crucial to investing. It’s also crucial to compare companies within the same industry. It seems logical initially but there are ratios and formulas that are used that operate most efficiently when comparison is done within similarities. So, let’s get on with the fun stuff already!

PepsiCo’s Balance Sheet and Liquid Ratio

(Remember, we are dividing the current asset with the liabilities for both years, not dividing the annual comparison. Meaning; do not divide the two numbers next to each other. This is the essential difference between horizontal and vertical analysis. ) Current ratio 2005=10,4549406=1.11

Current ratio 2004= 86396752=1.28

Just to make a quick observation before we move on the ratio of 2005 is 1.11:1 and in 2004 it is 1.28:1. We now have the ratios; let’s get the percentage of total assets from cash and equivalents. Then we will do Coca-Cola’s and compare. Percentage of cash for 2005=1716 (cash and equiv)10454 (total assets)= .1641 Percentage of cash for 2004=12808639= .1481

That’s 16.41% for 2005 and 14.81% for 2004. This is solid statistic and I don’t really see much room for improvement based on the information found. It seems to be a solid bet, but we are far from done.

Coca-Cola’s Balance Sheet and Liquid Ratio

(Again, remember to divide the total asset with total liability.) Current ratio 2005=10,2509,836=1.042
Current ratio 2004=12,28111,133=1.103

So the ratio is 1.042:1 for 2005 and 1.103:1 for 2004. Don’t feel discouraged, we will take this information and further discuss. I would like to mention that liability ratio lowering isn’t a bad thing and can mean potential growth. That being said, I sense improvement. Now that we have our ratio numbers for both companies and both years we will determine the percentage of total assets from cash and the equivalents. Now we will get the percentages of total assets and compare with PepsiCo. Percentage of cash for 2005=4701 (cash and equiv)29427(total assets)= .1598 Percentage of cash for 2004=670731441= .2133

That’s 15.98% for 2005 and 21.33% for 2004. I’m not sure about you, but if my percentage of cash went down 5.35% I would fret. Now, that’s not to say I wouldn’t invest just yet, but it does raise concern. Unless this cash is being used to pay off debts or re-invest into the company however, one should raise concern. Now that we have our calculations let’s make our comparison. In 2004 PepsiCo’s ratio was 1.28:1 then in 2005 it was 1.11:1. Whereas Coca-Cola had 1.103:1 for 2004 and 1.042:1 in 2005. We can divide the total current assets and of the liabilities for the two years giving us the increase or decrease for the same company. Simply divide the total current asset or liabilities for the two different years. We can find the increase or decrease for asset or liabilities. This furthers our comparisons.

Let’s get back to solvency. It is a comparison of current assets and current liabilities. It is determined by dividing one with another. This gives an investor a ratio, which is explained earlier, that provides the investor with good information. That being, how does the company do with long-term responsibility? Also how likely will it act in the future with obligations and goals? The lower the ratio is, the less likely they are to have the follow through we are looking for. A high ratio provides the investor with an imminent outlook on the corporation being free of debt and how the company chooses to re-invest its profit. Profitability can allow an investor to monitor the corporation’s ability to produce assets in comparison to the expenses they must pay off. To put it bluntly, if a company has a higher profit ratio or margin than another company than they are doing better. We can do the same thing with profit that we did with liquidity as far as percentages and ratios go.

When looking at profits we must be sure to compare annually because many companies have a season where they are selling more product. What the intended affect would be is to get the average and avoid the fluke statistics. When investing, it is a good idea to take a good step back. Like looking through the window of a candy shop. One candy might look good but you take a step back you can admire the entire display and see what is really going on. The big picture. Horizontal analysis can be utilized to provide the investor with the corporation’s financial data over a monthly or annual progression. It can be expressed using a balance sheet, an income statement, or retained earnings statement.

When an investor evaluates the horizontal analysis they can determine the stability of the corporation, giving them solid insight. First we will apply horizontal analysis to PepsiCo’s assets and liabilities. We start by dividing the difference of total current assets between 2004 and 2005. As I have provided the spreadsheet earlier with the information it won’t be necessary to repeat. We are still dealing with those highlighted numbers; this will make it easier to locate the correct statistics. 10454 assets of 2005 – 8639 (assets of 2004)8639 (assets of 2004) = .210 We can then turn this into percentage which would be 21% (technically 21.01%) total current asset increase from one year to the next. Now we’ll do the same with liabilities. 9406 liabilties of 2005- 6752 (liabilties of 2004)6752 (liabilties 2004)= .393

Let’s do this in percentage form, 39.3%. That’s increase of liabilities during the time span of 2004 to 2005. By analyzing this information we are provided with the fact that there is an increase in current assets. This can be done by obtaining loans and gaining credibility as a corporation. On the counterpoint here there is a possibility that debt has increased. Keep in mind that while numbers are increasing and numbers don’t lie, it’s the person analyzing them that puts things in perspective. Let’s make a comparison now with Coca-Cola. 10250 assets of 2005- 12281 (assets of 2005)31441 assets 2004= -.064 We made the horizontal analysis to see if Coca-Cola has gone through increase or decrease with assets and liabilities between the two years of information we were given.

When we translate our answer from decimal to percentage we get -6.4% which is a decrease. Let’s divide liabilities for Coca-Cola now. 9836 liabilities of 2005- 11133 (liabilities of 2004)11133 (liabilties of 2004)= -.116 This gives us -11.6% decrease in liabilities from 2004 to 2005. Translating that to English, this means that while assets were low it seems they were clearly paying off debts. This is a responsible and promising thing for a corporation to act on. A good investor will recognize debts being paid off and see that they are making profits and creating a solid foundation for the future. By judging the company’s percentage of growth we can easily separate the stronger competitor. Now, let’s do PepsiCo’s vertical analysis. Year 2005=1716(cash and equiv)31727 (total asset)= .054

Year 2004=1280 (cash and equiv)27987 total asset= .046

In 2005 the percentage is 5.4% while in 2004 it was only 4.6%. Let’s now figure out how much of the assets are currently in possession of the company, first with 2005. Oh, and imagine how nice it would be if we could do that with people we’ve loaned money to. Year 2005=10454 (current asset)31727 (total asset)= .3295

Year 2004=8639 (current asset)27987 (total asset)= .3087
So, we have 32.95% in 2005 and 30.87% in 2004. Meaning that PepsiCo’s assets in possession went up 2.08% in a year. Promising, right? Well, what about Coca-Cola’s? Year 2005=4701 (cash and equiv)29427 total asset= .160

Year 2004=6707 (cash and equiv)31441 (total asset)=.213
In 2005 the percentage is 16% while in 2004 it was 21.3%. Interesting, huh? Let’s figure out the assets Coca-Cola owned in possession. This is where investor’s ears perk up and we can get to some real solid numbers that will eventually define our final decision. Year 2005=10250 (current asset)29427 (total asset)= .348

Year 2004=12281 (current asset)29427 (total asset)= .391

In 2005 the percentage is 34.8% while in 2004 it was higher with a 39.1%. One can easily come to the conclusion that Coca-Cola may have fewer assets in possession, but keep debts in mind. Investors are looking for exactly this. Sure, they own less but they are also being financially responsible. In conclusion with all that has been said and analyzed I would like to conclude this intense and considerate examination. Many statistics were provided by the appendix and several calculations were made to come to a logical and sound conclusion. By viewing over the ratios and percentages we can determine that Coca-Cola is a stronger company. With the fact they do have low assets, we consider how many debts are being paid off due to the profits that are made. The CEO clearly had a strong head on their shoulders and even though these numbers are but six years old, I can only imagine their consistence has stayed the same. Reason being, the corporation has remained out of debts and re-invested their profits into future proceedings which allow a positive outlook for investors.

Resources:
Hill, M.G (2009). Financial Accounting