Key Technical Decisions

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Key Technical Decisions Kimora Coulson Grand Canyon University MIS-640 Financial Decision Making Professor Sunny Liston February 21st, 2024 1

Interview With IT Manager Key Technical Decisions Coca-Cola Co. and PepsiCo are powerful companies, with huge portfolios, broad popularity, and a long history of innovation. This comprehensive look at the companies explores their different approaches to financial performance and technology investments to determine how prepared they are to take on new challenges and stay ahead of the competition. Through an in-depth analysis of their profitability measures, technological achievements in the recent past, and general economic condition, I learned more about how these industry leaders are positioned for long-term success and development in the face of a business climate that is changing quickly through our investigation. For the past several years, Coca-Cola Co. has shown a steady trend of profitability, with steady revenue growth propelled by a broad range of products and a well-known brand. Despite obstacles like shifting customer tastes and health worries about sugar-filled drinks, Coca-Cola has been able to grow its market share and keep a strong profit margin. From 2010 to 2023, Coca-Cola's gross profit grew steadily, demonstrating the company's capacity to profitably produce results from its core business. Coca-Cola's gross profit for the quarter that ended on December 31, 2023, was $6.215 billion, a notable rise of 10.74% over the same period the previous year (MacroTrends, 2023). Coca-Cola's gross profit for the full year ended December 31, 2023, was $27.234 billion, indicating a strong year-over-year growth rate of 8.92%. These numbers demonstrate how well Coca-Cola controls the variable expenses involved in making and distributing its drinks, which boosts the company's overall financial performance and profitability (MacroTrends, 2023). While PepsiCo has also seen consistent profitability because

to its wide range of products, which includes convenience meals, drinks, and snacks. PepsiCo's gross profit has shown a steady growing trend between 2010 and 2023, suggesting that the company may gradually increase its profit margin through its operations. PepsiCo’s gross profit for the quarter that concluded on December 31, 2023, was $14.753 billion, indicating a little rise of 1.21% over the same period the year prior (P.E.P, n.d). PepsiCo's gross profit for the year ended December 31, 2023, was $49.590 billion, a noteworthy increase of 8.24% from the previous year (Macrotrends, 2023). These numbers demonstrate PepsiCo's efficient cost control over the manufacturing and distribution of its goods, which enhances the company's overall financial performance and profitability. To boost sales, both businesses have concentrated on marketing and innovation, with PepsiCo's recent focus on healthier products helping to explain their success (P.E.P, n.d). Coca-Cola Co. and PepsiCo are powerful companies, with huge portfolios, broad popularity, and a long history of innovation. This comprehensive look at the companies explores their different approaches to financial performance and technology investments to determine how prepared they are to take on new challenges and stay ahead of the competition. Through an in-depth analysis of their profitability measures, technological achievements in the recent past, and general economic condition, I learned more about how these industry leaders are positioned for long-term success and development in the face of a business climate that is changing quickly through our investigation (Coca-Cola Co., 2023). Coca-Cola Co. is still dedicated to developing new technologies in the future. It has allocated funds to projects like supply chain 3

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management systems that use blockchain technology and the use of artificial intelligence for targeted advertising campaigns. In a same vein, PepsiCo is actively looking for technical innovations that enhance customer experiences and improve business operations via automation, data analytics, and e-commerce platforms. These initiatives highlight how committed both businesses are to using cutting-edge technology to maintain their competitiveness and adapt to changing consumer tastes in the ever-changing beverage sector (PepsiCo, Inc., 2023). After analyzing several important financial metrics to give an in-depth assessment of Coca-Cola Co. and PepsiCo's financial capacity to finish their planned technological investments. Concentrating on cash flow, both businesses show strong cash flows from operations, demonstrating their capacity to produce enough money internally to sustain their goals. Their reasonable debt levels also imply a sound equilibrium between preserving stability and using financial resources. Profitability measures like return on assets and return on equity demonstrate the effective use of capital and resources, enhancing their capacity for investment and financial stability ( K, A. C., 2023). Coca-Cola Co.'s high profitability measures and PepsiCo's good liquidity indicators highlight both companies' financial stability and willingness to pursue technology initiatives. The assessments show that both businesses have the financial resources necessary to successfully carry out their planned technological efforts and meet their strategic goals. It's important to consider both PepsiCo and Coca-Cola Co.'s strengths and limitations when evaluating their financial ability to carry out their strategic goals. With a well-known 4

brand and a large market share, Coca-Cola Co. has a strong platform from which to launch cutting-edge technology projects. However, the company on sugary drinks exposes it to dangers relating to shifting customer tastes and regulatory difficulties arising from health-related issues ( K, A. C., 2023). PepsiCo, on the other hand, exhibits resilience to market moves because of its diverse product portfolio, which consists of a variety of snacks, beverages, and healthier substitutes. Reducing risk diversifies and enables PepsiCo to use its resources more effectively by leveraging them across a range of market sectors. PepsiCo has demonstrated its commitment to adjusting to changing customer tastes and market dynamics through strategic partnerships and acquisitions in the health and wellness industry. Each business may successfully traverse the intricacies of the market landscape and capture chances for development and innovation by utilizing its strengths and correcting its limitations. In conclusion, PepsiCo and Coca-Cola Co. could implement their technological ambitions and support further growth. Despite challenges in the beverage industry, both companies have shown their resilience and adaptability via innovation and smart technology investments. Coca-Cola Co. benefits from its well-known brand, but PepsiCo has a competitive edge because of its emphasis on diversity and healthful goods. As the beverage industry evolves, both companies will need to stay flexible and proactive in their use of technology to meet consumer demands and retain their leadership positions in the market. 5

Reference: Cocacola Gross Profit 2010-2023: KO. Macrotrends. (n.d.-a). https://www.macrotrends.net/stocks/charts/KO/cocacola/gross-profit How Digital Technology and big data can accelerate coke north america’s innovation strategy. Tech and Big Data Accelerate Innovation Strategy - News & Articles. (n.d.). https://www.coca-colacompany.com/media-center/tech-and-big-data-accelerate- innovation-strategy K, A. C. (2023, September 8). Coca-Cola vs Pepsico - Business Model & Marketing Strategies. StartupTalky. https://startuptalky.com/coca-cola-pepsi-business-model/ PepsiCo announces strategic end-to-end transformation: PEP+ (pepsico positive). PepsicoUpgrade. (n.d.). https://www.pepsico.com/our-stories/press-release/pepsico- announces-strategic-end-to-end-transformation-pep-pepsico-positive09152021 Pepsico Gross Profit 2010-2023: PEP. Macrotrends. (n.d.). https://www.macrotrends.net/stocks/charts/PEP/pepsico/gross- profit#:~:text=PepsiCo%20annual%20gross%20profit%20for%202022%20was%20%24 45.816B%2C,2021%20was%20%2442.399B%2C%20a%209.91%25%20increase%20fro m%202020. 6

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Coca-Cola Co. (2023). Form 10-K: Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2023. U.S. Securities and Exchange Commission. Retrieved from https://www.sec.gov/Archives/edgar/data/21344/000002134424000009/0000021344-24-000009- index.htm PepsiCo, Inc. (2023). Form 10-K: Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 30, 2023. U.S. Securities and Exchange Commission. Retrieved from https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/77476/000007747624000008/ pep-20231230.htm 7

Key Technical Decisions

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