PepsiCo From an Equity Analyst’s Perspective

The ambition in the company’s mission and vision propelled it to become one of the world’s biggest food and beverage corporations, PepsiCo, within a short period. The company specializes in delivering properly salted snacks alongside the best cola available anywhere in the world. An estimated one billion PepsiCo products are consumed each day in over 200 countries and territories (Zhang, 2019). According to the most recent financial results, PepsiCo expects to produce net revenues of $238 billion in 2022, powered by a complimentary beverage and convenience food portfolio that includes brands like Cheetos and Gatorade.

In recent events, PepsiCo has been engaging in cost leadership and broad differentiation programs for its key projects and mitigation. PepsiCo’s chief conventional serious technique is cost authority. By large intensity, PepsiCo’s monetary exhibition is improved by diminishing expenses (Zhang, 2019). Coca-Cola is a tough competitor; thus, PepsiCo offers lower prices because of its lower operating costs as it trims costs and pumps more money back into the company’s operation. On the other hand, PepsiCo’s auxiliary conventional serious methodology is wide separation (Jallow, 2021). By featuring the company’s item’s particular selling focuses, this strategy assists organizations with acquiring an upper hand.

The company has engaged in broad differentiation events through marketing penetration and product development strategies. For instance, PepsiCo’s primary generic competitive strategy is to lead in cost (Jallow, 2021). Expenses can be reduced by using this basic strategy to improve PepsiCo’s financial performance and overall competitiveness. Additionally, the company offers promotional discounts on items and services. On the other hand, PepsiCo uses broad differentiation as a supplementary generic competitive strategy (Zhang, 2019). This technique aids firms in gaining a competitive edge by emphasizing the unique selling aspects of their products. PepsiCo relies on market development as a backbone strategy to sustain its rapid expansion. Exploiting new business sectors or market portions is the essential objective of this forceful system. In the immature world, PepsiCo is growing its circulation organization to arrive at the last undiscovered markets.

The relative performance of PepsiCo is relatively high compared to Coca-Cola Co and Keurig Dr. Pepper. Pepsi and Coca-Cola are valued at about $100 billion and $70 billion, respectively, based on their last three years of revenue and profit. The net worth of Keurig Dr. Pepper was, on the other hand, estimated to be $52 billion (Zhang, 2019). During Nooyi’s tenure at the helm of Pepsi, the company has expanded significantly. Between 2006 and 2017, net revenue climbed from $35 billion to $63.5 billion, representing a compound annual growth rate of 5.5 percent (Venkataraman & Summers, 2017). Dividends have nearly tripled from $1.16 to $3.17 per share between 2006 and 2017, becoming a boost for shareholders (Zhang, 2019). The three companies exhibit net income using the indirect technique before changing the net income into operating cash. When calculating net cash from operating activities, Coca-Cola and Pepsi employed the indirect technique since they started with net income and then transformed it into net cash.

Coke, PepsiCo, and Keurig Dr. Pepper all have a current cash debt coverage ratio that indicates whether they can pay off their present liabilities from their operations in 2014. It is less likely that Coca-Cola Company or PepsiCo, Inc. may experience liquidity issues if their current cash debt coverage is better. Having a current cash debt-to-capital ratio of 1:1:0.5 or below is considered excellent (Zhang, 2019). Coca-Cola Company or PepsiCo. Inc. will be able to meet all current obligations if they have such a ratio. Either company is not meeting the current cash debt coverage ratio of 1:1:0.5. Compared to Coca-Cola Company, PepsiCo, Inc. has a higher current cash debt coverage ratio. PepsiCo. Inc. is better positioned than Coca-Cola Company to satisfy its current liabilities when they become due (Zhang, 2019). Therefore, based on the findings discussed, people should invest in this company, as it has several positive attributes. The strengths are earning growth and stability of the company. For instance, the company’s net profit has grown significantly over time (Venkataraman & Summers, 2017). According to the current patterns, incomes have typically increased.


Jallow, D. (2021). A strategic case study on PepsiCo. Available at SSRN 3828353.

Venkataraman, S., & Summers, M. (2017). PepsiCo: The challenge of growth through innovation. Darden Business Publishing Cases.

Zhang, Z. (2019). Risk analysis of two leader drink company: PepsiCo and Coca-Cola. Asian Business Research, 4(3), 42.

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