By: Ian Michael Cicero Accounting 4 th Hour 19 April 2012

By: Ian Michael CiceroAccounting 4th Hour

19 April 2012

Company History and Background

PepsiCo, Inc. was founded by Donald M. Kendall, President and Chief Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief Executive Officer of Frito-Lay, through the merger of the two companies in 1965.

Company History and Background

In 1966 Pepsi enters Japan and Eastern Europe.

Also the slogan becomes, “Come alive! You’re in the Pepsi generation.”

Milestone PepsiCo sales pass

the $1 billion mark in 1973.

PepsiCo moves from New York City to new world headquarters in Purchase, New York.

Pepsi Takes On Food Foods International,

later called PepsiCo Foods International (PFI) and subsequently named Frito-Lay International, is established to market snack foods around the world in 1976.

A Way To Increase Sales The Pepsi Challenge,

introduced in Dallas, Texas in 1975, becomes a national campaign. Around the nation, consumers select Pepsi-Cola as the best tasting cola.

PepsiCo adopts Code of Worldwide Business Conduct.

Another Acquisition PepsiCo acquires Pizza Hut, Inc.

Also acquire Taco Bell.

PepsiCo stock splits three-for-one.

Main Focus In 1984 PepsiCo is

restructured to focus on its three core businesses: soft drinks, snack foods and restaurants. Transportation and sporting goods businesses are sold.

Pepsi Moving Forward By 1985 PepsiCo is now the

largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees.

Pepsi-Cola products are available in nearly 150 countries and territories around the world. Snack food operations are in 10 international markets.

Pepsi Is Getting Big $$$ Pepsi reaches all time

highs in all categories of the business.

The ever growing PepsiCo takes on numerous drinks, snacks, and business to add to it’s growing empire.

Today… In the year 2012,

Pepsi has over 285,000 employees.

Pepsi is the world leader in convenient snacks, food, and beverages with revenue over $60 billion.

Headquarters… Today, Pepsi’s

headquarters is in Purchase, New York.

The new corporate headquarters feature a building by one of America's foremost architects, Edward Durrell Stone, set on a campus of 144 acres amid an outdoor sculpture garden.

In The Business Of… PepsiCo is in the

business of producing, distributing, and buying beverages, snacks, and other businesses.

Pepsi’s main source of income is the snack and beverage industry.

Pepsi Brands include Frito Lay, Tropicana Juice Products, Quaker Brands, and Gatorade.

Frito Lay Products include Tostitos, Doritos, Lays Chips, and Flat Earth Snacks.

Quaker Brands include Aunt Jemima, Rice-A-Roni, Near East side dishes, Spudz snacks, and Crisp'ums baked crisps.

Quaker Breakfast Cereal Brands include, Life, Puffed Wheat, Harvet Crunch, King Vitamin, Quaker Oh's!, Mother's Cereal, and Cap'n Crunch.

Gatorade Brands include G2, and Propel Fit Water. Pepsi's SoftDrink Brands include Pepsi, Diet Pepsi, Pepsi

Max, Mountain Dew, Diet Mountain Dew, Mountain Dew Voltage, Sierra Mist, and Diet Sierra Mist.

Products…

Stock Info… Today’s Price: $66.21 Historical High: In

2007 stock prices got to $78.26 per share.

Historical Low: In 1990 the stock price was $13.31

Dividend Amount: 3.11%

From what I have seen and read I have come to the conclusion of what dividends are. I now see that the earnings of a company must be distributed to the stockholders. When a company is doing well, the people who have stock in that company also receive a financial gain. When the company is doing bad, the stockholders take a financial loss.

My Understanding…

“S”, stands for strengths of the company. “W”, stands for weaknesses in the company. “O”, stands for opportunities for future

growth or areas that have not been explored.

“T”, stands for threats to the profitability and growth of the business.

S.W.O.T. Analysis

Strengths… Three strengths of

Pepsi are:1. Brand strength2. Effective stride in

new markets3. Strong existing

distribution channels

1. Pepsi has brand strength due to the vast amount of products they have. They sell snacks, beverages, and merchandise with their logo on it.

2. Pepsi has a effective stride in new business because of the empire they have built.

3. Pepsi has strong distribution channels because they have a trusted name that has been around for a long time.

Strength Explanations

Weaknesses… Three weaknesses of

Pepsi are:1. Reliant upon

carbonated drinks2. Entrance into difficult

non care categories3. Pepsi can cause

health problems

1. Pepsi’s business is reliant upon carbonated drinks. If those drinks go bad, they must be thrown out and that is a financial loss.

2. Pepsi sometimes makes bad business decisions and invests into products that do not make it.

3. If a person drinks Pepsi every day for a long time they can develop serious health conditions.

Weakness Explanation

Opportunities… Three opportunities

for Pepsi are: 1. New product

introductions2. Brand is attractive to

global partners3. With growing

business comes jobs

1. Pepsi is a ever growing company that will always be inventing and investing in new products.

2. The brand is well known and attractive to global partners which will increase revenue.

3. Pepsi’s growing business will always need people to fill job positions.

Opportunities Explanation

Threats… Three threats of Pepsi

are:1. Strong competition2. Potential health

issues3. Free trade

1. Pepsi is a major company with many competitors. In a field where there is many competitors there will always be high competition.

2. Drinking Pepsi on a regular basis for several years can cause health issues.

3. Free trade is a problem among Pepsi products because they are shipped all around the world and are at risk of being unprotected.

Threat Explanation

In my opinion I would not buy stock right now in PepsiCo. The price per share is high right now and it is steadily going up. I would defiantly recommend waiting for the stock price to come down and then buy. But, if you have the money to spend now on the shares, I would buy because it appears that the stock of Pepsi is rising.

Recommendation…

http://www.pepsico.com/Company/Our-History.html

http://studio-5.financialcontent.com/investplace/quote?Symbol=PEP

http://www.docstoc.com/docs/10545397/Pepsi-Marketing-Report

http://www.pepsico.com/Investors/Stock-Information/Historical-Price-Lookup.html

Works Cited