1

7
8

9
10

OPPORTUNITIES
1. Coke's net income and profit margin decreased by 2.91% and 12.3%, respectively, from
2007-2008
2. The savory snacks industry is highly concentrated with the top 50 companies controlling 75%
of the market
3. The growth in the carbonated drink market was largest in Asia and Europe.
4. The global chip market is over $32 billion with an annual growth rate of approximately 6.35%.
5. The global chip market is driven by consumer taste and health considerations.
6. It is estimated that 99% of all American households have salty snacks and the average
household spends approximately $80 yearly in 32 pounds of these products.
7. Ready-to-eat cereals comprise about 90% of total industry revenue.
8. The demand for the breakfast cereal market is driven by consumer demographics (age and
lifestyle) and health considerations because a fast-paced life and health concerns shape our
perceptions of the first meal of the day.
9. The proliferation of products for specific market segments and the increasing use of house
brands by retailers (support: will continue to force PepsiCo to innovate new products and at the
same time reevaluate current product offerings)
10. A recent environmental campaign against plastic containers has impacted the sale of
bottled water and forced manufacturers to develop more environmetally friendly containers.
11. The greatest growth for breakfast food is in the breakfast bars and the fastest regional
growth is the Asian-Pacific market.
THREATS
12. Consumers shift to less costly drinks and snacks.
13. News of contamination of water can quickly destroy consumers' confidence in a company's
ability to provide a safe, healthy product.
14. World demand has continued a slow but steady overall growth for the last 5 years of around
9% with sports drinks, bottled water, and energy drinks showing the largest growth

15. The carbonated soft drink market in the United States has shown a decline of 0.4% in 2007
as consumers shifted from soft drinks to bottled water and sports drinks.
16. Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at
36.7% and continues to expand even in the current monetary crises
17. A recent environmental campaign against plastic containers has impacted the sale of bottled
water and forced manufactures to develop more environmetally friendly containers.
18. Coca-Cola has continued to strengthen their juice, ready-to-drink tea and coffee products,
water and sports drinks along with the introduction of Truvia as a sweetener.
19. Increased net revenue for Kraft Foods of 13.32% over 2007 to $42.201 billion.
20. Coca-cola has also invested in bottling investments and streamlining its operations and has
a 15.3% market share in China versus Pepsi's 6.2%
21. Kraft's North American Snacks and Cereal division posted a 3% increase in revenue in
2008.

STRENGTHS
0

0
0
0

0
0
0
0

0
0
SO STRATEGIES
1. Increase marketing and promotional efforts through the retailers and bottlers in
Asia and Europe especially on the carbonated drink market (S5, S17, O3)
2. Expand the portfolio of "Good-for-You" nutritious products by reducing added
sugar, sodium and saturated fat in certain key products (S14, O6, O8)
3. Devise a promotional campaign wherein the public wil be engaged in designing
a stylish yet environment-friendly bottles for bottled products of Pepsi (S6, S7, S8,
S13, O10)
4. (S9, S11, O4, O5)

5. Joint venture with dairy companies to boost sales of its breakfast cereals
(S10, O7)

ST STRATEGIES
1. Develop affordable and cheaper snack products through smaller packaging (S9,
S11, T1)
2. Devise a promotional campaign wherein the public wil be engaged in designing
a stylish yet environment-friendly bottles for bottled products of Pepsi (S6, S7, S8,
S13, T6)
3. Productivity ---> new eqiupment (S2, S12, T9)

WEAKNESSES
0

23. Cash and cash equivalents increased by 126.81% in 2008 from

44.88% decrease in 2007.

0
0
0

0
0

0
0
WO STRATEGIES
1. Outsource packaging of snacks and cereal products (W1, O1, O10)
2. Joint venture with dairy companies to boost sales of its breakfast cereals (W5,
O8, O9, O11)
3. Focus on increasing marketing efforts on promoting soft drink brands and other
beverages of PepsiCo as complementary products to its snacks (W7, O6, O9)

4. Increase R&D expenses to develop environment-friendly and

sustainable packaging (W6, O10)

WT STRATEGIES

Weight

Weighted
Score

Rating

Opportunities
1. Coke's net income and profit margin decreased by
2.91% and 12.3%, respectively, from 2007-2008

0.05

0.05

2. The savory snacks industry is highly concentrated with

the top 50 companies controlling 75% of the market

0.04

0.16

3. The growth in the carbonated drink market was largest

in Asia and Europe.

0.05

0.1

4. The global chip market is over $32 billion with an

annual growth rate of approximately 6.35%.

0.05

0.2

5. The global chip market is driven by consumer taste and

health considerations.

0.05

0.2

6. It is estimated that 99% of all American households

have salty snacks and the average household spends
approximately $80 yearly in 32 pounds of these products.

0.06

0.24

7. Ready-to-eat cereals comprise about 90% of total

industry revenue.

0.04

0.16

8. The demand for the breakfast cereal market is driven

by consumer demographics (age and lifestyle) and health
considerations because a fast-paced life and health
concerns shape our perceptions of the first meal of the
day.

0.06

0.24

9. The proliferation of products for specific market

segments and the increasing use of house brands by
retailers (support: will continue to force PepsiCo to
innovate new products and at the same time reevaluate
current product offerings)

0.07

0.28

10. A recent environmental campaign against plastic

containers has impacted the sale of bottled water and
forced manufacturers to develop more environmetally
friendly containers.

0.03

0.12

0.04

0.08

11. The greatest growth for breakfast food is in the

breakfast bars and the fastest regional growth is the
Asian-Pacific market.
Threats

12. Consumers shift to less costly drinks and snacks.

0.06

0.18

13. News of contamination of water can quickly destroy

consumers' confidence in a company's ability to provide a
safe, healthy product.

0.05

0.2

14. World demand has continued a slow but steady

overall growth for the last 5 years of around 9% with
sports drinks, bottled water, and energy drinks showing
the largest growth

0.05

0.2

15. The carbonated soft drink market in the United States

has shown a decline of 0.4% in 2007 as consumers
shifted from soft drinks to bottled water and sports drinks.

0.06

0.18

16. Coca-Cola holds the largest share of the U.S. cola

market at 41% with Pepsi second at 36.7% and continues
to expand even in the current monetary crises

0.06

0.24

17. A recent environmental campaign against plastic

containers has impacted the sale of bottled water and
forced manufactures to develop more environmetally
friendly containers.

0.05

0.2

18. Coca-Cola has continued to strengthen their juice,

ready-to-drink tea and coffee products, water and sports
drinks along with the introduction of Truvia as a
sweetener.

0.03

0.12

19. Increased net revenue for Kraft Foods of 13.32%

over 2007 to $42.201 billion.

0.03

0.06

20. Coca-cola has also invested in bottling investments

and streamlining its operations and has a 15.3% market
share in China versus Pepsi's 6.2%

0.04

0.16

21. Kraft's North American Snacks and Cereal division

posted a 3% increase in revenue in 2008.
TOTAL

0.03
1.00

0.06
3.43

PEPSICO
Critical Success
Factors

COCA COLA
COMPANY

KRAFT

Weight

Rating

Score

Rating

Score

Rating

Market Share

0.15

0.45

0.6

Financial Position

0.03

0.06

0.12

Product Quality

0.10

0.4

0.4

Customer Loyalty

0.05

0.2

0.2

Supply Chain
Management

0.10

0.3

0.4

Marketing/ Advertising

0.15

0.6

0.6

Innovation/ Product
R&D

0.15

0.6

0.45

Price Competitiveness

0.03

0.12

0.09

Product Diversity

0.05

0.2

0.1

Political and Economic

Stability

0.07

0.21

0.21

Brand Image
Management
TOTAL

0.08
0.04
1.00

4
4

0.32
0.16
3.62

4
4

0.32
0.16
3.65

3
3

KRAFT
Score
0.3
0.09
0.3
0.15
0.3
0.45
0.45
0.09
0.15
0.21
0.24
0.12
2.85

Weight

Rating

Weighted Score

Strengths
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Weaknesses

17
18
19
20
21
22
23
24
25
26
27
TOTAL

0.00

0
0
0
0
0
0
0
0
0
0
0
0

Key Factors
Opportunities
1. In 2007, 66% of the Americans were reported making
changes in their diets to improve their health and wellness
compared to 57 percent from the previous year.
2. Bottled tea is one of the fastest growing drinks in the
industry. Bottled tea sector with an average growth rate of 15%
during 2007-2012.
3. There is a growing business for snacks and confectionery
brought about by the increased number of consumers
snacking from 1977 (59%) to 2007 (90%).
4. Cadbury is planning to divest its beverage division in 2007
5. Growing market in Latin America and in Cokes bottling
investments
6. Pepsi Cola only has 2.8% quarterly revenue growth which is
way lower than the industrys 6.6%

Threats
7. In 2007, 66% of the Americans were reported making
changes in their diets to improve their health and wellness
compared to 57 percent from the previous year.
8. Fluctuations in foreign exchange currencies
9. Rising cost and low availability of raw materials (corn,
orange, water)
10. Increased competition in the nonalcoholic beverages
segment in the commercial beverages industry
11. The parting of ways of Coke and Nestle on selling tea in
the United States opened the doors for PepsiCo
12. Banning of distribution and sale of soft drink brands to
schools due to obesity issues among youth.
13. Some of the ingredients in Coke products may be
hazardous to ones health and regulations may soon require
warning labels.
14. PepsiCo succeeded in addressing the concerns of
health-conscious consumers with its campaign called Smart
Spot that emphasizes better for you snack products
15. Federal regulations may prohibit PepsiCo and Coke from
bidding for Cadburys carbonated soft drink business.

Weight

STRATEGIC ALTERNATIVES
1
AS
TAS

16. PepsiCo leads the market in terms of the water and sports
drinks categories -- PepsiCo has the number one water brand,
Aquafina and is the top player in the bottled tea market with
Brisk
17. Cadbury Schweppes leads the industry in terms of
quarterly revenue growth in 2006 which is equal to 7.80%

Strengths
1. Employing about 71,000 people worldwide in over 200 countries
and with a market capitalization of $111.1B in 2006, Coca-Cola
Company is the worlds largest beverage company

2. Coke produces about 400 brands consisting of over 2,600

beverage products, such as water, juice and juice drinks, sports
drinks, energy drinks, teas, and coffees.

3. Coke products are distributed through restaurants, grocery

markets, street vendors, and others, all of which sell to the end users:
consumers who consume in excess of 1.4 billion servings daily.

4. In the summer of 2007, Coke acquired Energy Brands, Inc. which

produces Glaceau - a vitamin water ranked second behind PepsiCos
Propel in the fitness market.
5. Strong marketing and promotional efforts
6. Coke is increasing investment in its bottling investments, front-end
capability, equipment, people/training.
7. Coke continuously conduct ongoing innovation with their products
such as Coke zero, Diet Coke, etc
8. The way the Coca-Cola Company works reflects many countries
and cultures in which it does business.
9. Acquisition of other beverage companies to strengthen their
presence (e.g. Jugos del Valle, Apollinaris, Traficante) in other
markets
10. Net income increased by 2.39% on average for three years (20052006)
11. Latin Americas net operating revenues increased by 12.13%, on
average for the three years.
12. Cokes international markets had an average increase of 5.51%
per annum in terms of net operating revenues.

Weaknesses
1. Interchangeable with Pepsi by many consumers expressing
their interest in a soft drink.
2. Product line is limited to beverages.
3. Highly dependent to their bottling partners.

4. Fixed Assets turnover decreased by 12.61% from 20052006

5. Cokes selling, general and admin expenses increased by 8.
98% from 2005-2006
6. Corporate segment of Coke had a 20% decrease in its total
net operating revenues from 2004-2005 and no growth from
2005-2006
7. Cokes net income as a percentage to sales declined by
4.45% from 2004 to 2005 and then had no change from 2005
to 2006
Total

LTERNATIVES
AS

2
TAS