Cola Wars Continue: Coke and Pepsi in 2006MGMT 495

Summer 2011

Financial Analysis:

COCA COLA

Forward P/E Ratio (by 12/31/12) 15.43

EBITDA 15.04

PEPSI Forward P/E Ratio (by

12/25/12) 14.18

EBITDA 10.68

•Coca Cola has a higher earnings before interest, taxes, depreciation and amortization , which means it has a greater ability to service its debt.

•Coca Cola has a higher Forward Price-Earnings Ratio, which means it is expected to yield higher earnings growth in the future.

Financial Analysis Continued: U.S. Non-Alcoholic Beverage Domestic

Competition Market Share

43%

31%

18%

8%

Coca Cola PepsiCadbury Schweppes other

http://www.wikinvest.com/stock/Coca-Cola_Company_%28KO%29

External Analysis

Concentrate Producers Promotion and market

share Agreements with

nationwide retailers (Wal-Mart)

Fountain Sales ▪ Coke – Burger King,

McDonalds, Subway, Wendy’s

▪ Pepsi – Pizza Hut, Taco Bell, KFC, Quiznos

New products: Diet, Zero, One…

Dr Pepper, Canada Dry, Philip Morris, Cadbury Schweppes

Bottlers Bottling and canning (100

plants needed) Master Bottle Contract

1899, 1987 Bottlers input: packaging,

and sweeteners Bottling refranchising:

Coca-Cola Enterprises Overseas bottlers

Recomendatiotions

Maintain quality relations with suppliers and competitors

Entering new markets: health oriented

External Analysis

Retailers Supermarkets 32.9% Fountain outlets 23.4% Vending machines 14.5% Mass merchandisers 11.8% Convenience stores and gas stations

7.9% Other 9.5%

External Analysis

Market Environment Price wars Bottlers relations Deflationary market

of CSD Obesity

International Market Coke▪ Western Europe▪ Latin America

Pepsi▪ Middle East▪ Southeast Asia▪ Soviet bloc