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連欣瑜、邱子益、黃慈 宛、吳為 楷 、 張慈芳

連欣瑜、邱子益、黃慈 宛、吳為 楷 、 張慈芳. Agenda. Case summary. Strategy v.s Share price. PepsiCo acquired Quaker Oats Control 83.6% of the sports drink market . Company background. Coca-Cola. Products: Syrups Soft-drink Noncarbonated beverages .

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連欣瑜、邱子益、黃慈 宛、吳為 楷 、 張慈芳

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  1. 連欣瑜、邱子益、黃慈宛、吳為楷、張慈芳

  2. Agenda

  3. Case summary

  4. Strategy v.s Share price PepsiCo acquired Quaker Oats Control 83.6% of the sports drink market.

  5. Company background

  6. Coca-Cola Products: • Syrups • Soft-drink • Noncarbonated beverages Largest manufacturer, distributor, and marketer of soft-drink concentrates and syrups in 2000.

  7. Coca-Cola

  8. PepsiCo Products： • Snack food • Soft drink • Noncarbonated beverages • Snack food： • 2/3 of sales and operating income

  9. PepsiCo Roger Enrico(1996~2000) • In alliance with Starbucks • Sold off the fast-food chains • Brokered the acquisitions of Tropicana • Spun off capital-intensive bottling operations • Merge with Quaker Oats • ROEalmost doubled from 17% in 1996 to 30% in 2000

  10. competition

  11. Competition in Noncarbonated Beverages V.S.

  12. Question identify

  13. Which is more attractive? Use EVA to evaluate which is more worthy to invest

  14. Analysis & Conclusion

  15. Analysis • Step 1. CAPM • With risk premiums 5.9%

  16. Analysis • Step 2. WACC – Coca Cola • With tax rate = 30%

  17. Analysis • Step 3. NOPAT & IC – Coca Cola

  18. Analysis • Step 4. EVA – Coca Cola • 9 • .8

  19. Analysis • Step 5. WACC – PepsiCo • With tax rate = 32%

  20. Analysis • Step 6. NOPAT & IC – PepsiCo

  21. Analysis • Step 7. EVA – PepsiCo

  22. Analysis • In sum, we can get the following summary, • For comparison with Coke and PEPSI’ EVA expected performance, we discount them with year 2,000 WACC as discount rate. While  

  23. Conclusion • Growth rate of Coca-Cola EVA decreasing slightly from 2001 to 2003 • Discounted both firms’ estimated EVA in the lasting 3 years, we found out is higher than . • We believe Coca-Cola is more attractive for investors while both firms deserve investment.

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