Organization
Pepsi Co
PepsiCo, Incorporated is a global American beverage and snack company.
The company manufactures, markets and sells a variety of carbonated and
non-carbonated beverages, as well as salty, sweet and grain-based snacks,
and other foods. Besides the Pepsi-Cola brands (including Mountain Dew),
the company manufactures Quaker Oats, Gatorade, Frito-Lay, SoBe, and
Tropicana. The company formed for distribution and bottling is The Pepsi
Bottling Group . PepsiCo is a SIC 2080 (beverage) company.
PEPSI
Pepsi Cola is a non-alcoholic carbonated
beverage produced and manufactured by
PepsiCo. It is sold in stores, restaurants and
from vending machines. The drink was first
made in the 1890s by pharmacist Caleb
Bradham in New Bern, North Carolina. The
brand was trademarked on June 16, 1903. There
have been many Pepsi variants produced over
the years, including Diet Pepsi, Crystal Pepsi,
Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi
Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi
Jazz, Pepsi X (available in Finland and Brazil),
Pepsi Next (available in Japan and South
Korea), and Pepsi Ice Cucumber (available in Japan as of June 12, 2007).
Rise in popularity
During the Great Depression, Pepsi gained popularity following the
introduction in 1929 of a 10-ounce bottle. Initially priced at 10 cents, sales
were slow, but when the price was slashed to 5 cents, sales increased
substantially. With twelve ounces a bottle instead of the six ounces Coca-
Cola sold, Pepsi turned the price difference to its advantage with a radio
advertising campaign, featuring the jingle "Pepsi cola hits the spot / Twelve
full ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the
drink for you," encouraging price-watching consumers to switch to Pepsi,
while obliquely referring to the Coca-Cola standard of six ounces a bottle for
the price of five cents (a nickel), instead of the twelve ounces Pepsi sold at
the same price. Coming at a time of economic crisis, the campaign
succeeded in boosting Pepsi's status. In 1936 alone five-hundred-million
bottles of Pepsi were consumed. From 1936 to 1938, Pepsi Cola's profits
doubled.
Pepsi's success under Guth came while the Loft Candy business was
faltering. Since he had initially used Loft's finances and facilities to establish
the new Pepsi success, the near-bankrupt Loft Company sued Guth for
possession of the Pepsi Cola company. A long legal battle then ensued, with
Guth losing. Loft now owned Pepsi, and the two companies did a merger,
then immediately spun off the Loft company.
Marketing
Economy of Pepsi
A soda bottling plant may seem like a strange place to do economics, but
come along with me and take a look at what is seen. Here's what a typical
plant might look like. The first thing you notice is the size. It's an enormous
room—it feels like a football field with a big roof. At one end of this
enormous room are rows and rows of finished soda in liters and cans, on
pallets, stacked to the roof, ready to be loaded onto trucks. Then there are
rows and rows of empties ready to be filled. And there is a massive roller
coaster-ride structure that takes the empties into the filling room and back
out to be assembled into six packs and cases.
The filling room is walled off in glass from the rest of the facility. The
empty cans enter through a gap in the glass and are loaded onto a giant
roulette wheel-like structure with a diameter of maybe ten feet. The empties
ride along the edge of this wheel and over 100 nozzles come down and fill
them with soda. Then they're spun off the wheel to be pushed into six packs.
Here's how well it runs. A state-of-the-art facility with two filling lines
working can fill over 1.5 billion cans of soda in a year. Yes, 1.5 billion. How
many people are necessary to produce those billion and a half cans? Maybe
10 or 20 people, depending on the facility and whom you count as
production workers. Twenty people can take over one billion empty cans
and get them filled and put on a pallet, ready for shipping.
Imagine taking everything out of the factory so it's just a shell. Take the ten
smartest people in the world. Tell them they have total freedom. What is the
best way to fill and package cans of soda? Tell them they can use as many
workers as they want. They can design and build any machine they want, as
long as it fits in the space. Then tell them that whatever the cost of the
machinery and the people they hire, it's got to come out of the revenue they
receive from selling the soda at say $3 a six-pack. Of course, that's the retail
price. They'd really have to get by on maybe $1.50. They couldn't do it. It
would take them a millennium just to design and build the machinery, and
even then, they wouldn't get it right.
It appears to the eye that ten people produce a billion cans of soda in a year.
That is what is seen. What is unseen is the labor that goes into the machinery
that helps those ten workers get the job done. Think about the machine that
fills the can or the one that checks if it's full. Someone had to think of it and
design it and build it and improve it. It's more than one person. It's an army
of people. And that's only one tiny part of what produces the can of soda you
drink for a mere 50 cents.
Imagine what a soda would cost if you didn't have that technology. Simple
answer: a lot more. Imagine how many people would be working in bottling
plants if we didn't have that technology. Simple answer: a lot more.
Pepsi
Diet Pepsi
Caffeine free
Pepsi One
Pepsi Wild Cherry
Diet Pepsi Vanilla
Jazz by Diet Pepsi
Pepsi Lime
Diet Pepsi Max
Pepsi Twist
Competitors
Competitors of Pepsi are:
Average Cost: total cost (fixed and variable) divided by output i.e., cost
per platform hour.
Marginal cost: the change in total cost for each unit of output.
Note that a few items (driver wages and benefits, fuel, maintenance
wages and benefits) are the bulk of the costs.
Fully allocated model takes fixed costs and attempts to make them
variable, especially the per vehicle portion, i.e., if you added
10% to your vehicle fleet administrative costs wouldn't rise by
10%. Think about how the change will take place.
Cost Determination:
Cost determination is the process of identifying the total cost of providing
the service. The goal of this process is to produce a statement of the revenue
and expenses for the paratransit service for a particular period. The basic
source of information for this cost determination is the accrual accounting
system that will result in a listing of expenses such as that shown in the
following table. Though the example expense listing in the table is for a
twelve month period, performance evaluations also use monthly, quarterly,
or semiannual information.
The accrual accounting system, as contrasted to a cash accounting system,
records revenue and expenses when they are due or incurred, rather than
received or paid. An accurate performance evaluation requires that the
accrual system be used so that revenue and expenses can be properly
associated with the services provided and consumed. For example, if the
accrual system is not used, an annual vehicle insurance bill paid in one
month will overstate expenses and the related financial performance
measures for the month when the bill is paid. Likewise, counting revenue in
the period when it is received, rather than when it is earned, will improperly
represent the true revenue per passenger, or overall cost recovery of the
system.
In addition to the operating revenue and expense data provided by the accrual
accounting system, the system manager may, depending upon the purpose of
the evaluation, need to make adjustments to the expense data. The need for
such adjustments often arises when the evaluation involves comparing the
performance of a privately operated system with that of a nonprofit or public
agency-operated system. For this type of comparison, in addition to basic
operating expenses, special treatment of costs may be required for costs
incurred by the private operator but not by the public on nonprofit agency
such as depreciation, profit, and certain taxes.