dy

Managerial Economics

Coke vs. Pepsi: An Economic Analysis

Rebecca Simmons
Managerial Economics
Dr Sol Drescher
December 4, 2012

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 …show more content…

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