Strategic Management: Coca-Cola and PepsiCo Analysis

This report provides a comprehensive analysis of the sustainability reports of Coca-Cola and PepsiCo, focusing on their performance in environmental, social, and economic aspects. It begins with individual reviews of each company's sustainability initiatives, highlighting key aspects such as women empowerment, community well-being, sustainable packaging, climate protection, human rights, and sustainable agriculture. The report then contrasts and compares the two companies across business ethics, social responsibility, and environmental sustainability, offering a detailed assessment of their strengths and weaknesses. The analysis includes a grading system, and a conclusion that determines which company demonstrates a better commitment to sustainability. The report also incorporates peer reviews and references, providing a well-rounded perspective on the subject.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Student's Name
University Name
Author note

1
STRATEGIC MANAGEMENT
Introduction
Sustainability reports play a vital role for the business organizations. Sustainability
reports are published by business organization to determine the environmental, social and
economic impacts that are caused by the day to day operations and activities of the business. The
sustainability reports of the organizations present the organizational values and governance
model. It also identifies the link of the strategies and goals of the organization and its
commitment towards sustainable global economy (Makadok & Ross, 2013). This sustainability
report is essential of the business organization to measure, communicate and have a better
understanding of the company’s impact on the environmental, social and economic aspects. It
also helps them to set goals and strategy as per the results of the sustainability report. This helps
to initiate change in the organization in a more effective manner. The purpose of this assignment
is to review the sustainability report of the companies Coca-Cola and PepsiCo. It compares and
contrasts the sustainability reports of the companies and concludes by grading and analyzing the
company which is performing sustainably.
1. Review of coca cola sustainability report
As per the latest annual sustainability report of Coca Cola, it has a pretty interactive
sustainability report. Below are six best aspects of the Coca-Cola report.
Women Empowerment
The company mainly focuses on empowering the women; they aim to have around five billion
women entrepreneurs working in the entire global value chain by the year 2020. The company
takes initiative to provide the women employees access to various types of business skills

2
STRATEGIC MANAGEMENT
training, networking opportunity as well as finance and assets. The percentage of women’s
participating had grown in the last year by 45%. It implies that the company had empowered
around 1.7 million women. These activities are carried out through “5by20” global projects. The
company carries out the projects and the programs in collaboration with companies like IFC, Bill
$ Melinda, UN Women and others (Coca Cola - AnnualReports.com. 2019).
Embracing community well-being
The sustainability reports strive to offer beverages for every lifestyle and occasion while
achieving quality and consumer trust. The company previously had faced criticisms for their
work on basis on obesity research and its physical activity funds. Hence Coca-Cola in its
sustainability reports that they had refocused to community and individual well being. The
company is more focused on identifying ways to bring diversity on the drinks options.
Sustainable packaging
As per the reports the company has over 60% of the recovery rate of their bottles and cans. Coca
Cola plans to aims for 75% of bottle and can recovery by the year 2020. The plastics bottles
made by the company consist of 30% renewable materials from plants (Coca Cola -
AnnualReports.com. 2019).
Climate protection
Coca Cola is highly involved with the global climate conversations. The company has reduced
its CO2 in the drinks by 13%. The energy efficiency of the company has increased by 2%. Hence
they progress with their carbon footprint goal (Coca Cola - AnnualReports.com. 2019).
Human and workplace rights

3
STRATEGIC MANAGEMENT
The company has focused on the human right risks. The company owned facilities comply with
the human rights policy, the direct suppliers of the company also comply with the supplier
Guiding Principles.
Sustainable agriculture
The company has procured almost 95% of the globally sourced coffee and tea from sustainable
sources. It has joined efforts with the suppliers and works towards achieving sustainable sourced
agricultural ingredients by the year 2020 (Coca Cola - AnnualReports.com. 2019).
2. Review of PepsiCo sustainability report
As per the sustainability report of PepsiCo, it mainly focuses on three aspects that are
people, product and planet. The six best aspects of the PepsiCo report are discussed below:
Product: the report provides information regarding the continued efforts of PepsiCo to reduce
the excessive amount of sugars in the drinks and reduce the percentage of sodium content in the
foods and beverages offered by the company. In the future years the company wants to focus
mainly on nutritious products through innovation and reformulations.
Planet: It is reported by the company that majority of the ingredients used by the company are
directly sourced crops from the farmers. They engage through the Sustainable Farming Program
of the company (PepsiCo - AnnualReports.com. 2019).
People: The Company has focus efforts on the area of people. It is reached out to nearly 6.4
million women’s and girls through the company have increased investments in the local
communities all across the globe. Further, the company also engages in projects and programs
like Women with Purpose. Through these programs the company reaches to the people and

4
STRATEGIC MANAGEMENT
supports thousands of women to access the emplacement opportunities and undertake
entrepreneurship (PepsiCo - AnnualReports.com. 2019).
.
Corporate governance: PepsiCo has an active capable and diligent board of management and
they ensure that the activities and operations of the company meet the required standards of
corporate governance. The company has a separate department for ethics management who
coordinates the compliance practices and policies.
Community engagement: The report reflects the company’s commitment and engagement with
the local and global community in which it operates. It rightly reflects charitable giving,
volunteerism and company citizenship. The report covers the social and environmental impact of
the company’s offering.
Training, health and safety: The subcategory of training, health and safety reflects the efforts
of the company towards ensuring a healthy and safe workplace. It includes safety and health
performance, safety standards and training for the employees. There are employee management
safety teams and programs to support the wellbeing, productivity and health of the employees
(PepsiCo - AnnualReports.com. 2019).
.
3. Contrast and comparison
Business ethics

5
STRATEGIC MANAGEMENT
Coca cola oversees the interest of the overall success of the company. The board of directors
ensures that the business is carried out in an ethical manner. The company has a Public Policy
and corporate reputation Council comprising of senior managers and bottling partners. It
recommends the strategies and addresses the challenges (Woolfolk, Castellan & Brooks, 2013)
. Coca cola follows its code of business conduct which guides to business conduct and ensures
honestly and integrity. On the other hand, PepsiCo strongly believes in delivering the top tier
performance while maintaining the needs and requirements of the people in which it serves its
products. There are highly committed towards ‘performance with purpose’. They plan on
expanding their portfolio ethically and in a sustainable manner (Koenigs & Tranel, 2017).
.
Social responsibility
Coca cola considers social responsibility as their core business. As a part of the corporate
social responsibility, the company is highly committed towards establishing sustainable
community. As per research and analysis, the company gives away 1% of its annual income into
various programs and initiatives (Elangeswaran & Ragel, 2014).
. They invest a part of their income in active and healthy living initiatives, education of the
community, women empowerment, disaster stress relief, water stewardship programs and
humanitarian. As a part of their corporate citizenship program Coca Cola has launched various
campaigns to support the university students for becoming entrepreneurs and provide the
refugees with safe drinking water. On the other hand, it is the PepsiCo, to deliver financial
performance by integrating sustainability in the company strategy while leaving positive impact
on the society. The company sustainability report reflects there global sustainability agenda
which is highly focused on creating a better and more healthy relationship between food and

6
STRATEGIC MANAGEMENT
people. Further, the company is also planning to introduce nutritious foods for the people and
help the community to prosper the local communities (Brick, 2017). The company has made
huge progress since the past years.
Environmental sustainability
PepsiCo highly depends on the availability of natural resources for manufacturing its
products. The company has a continued focus on reducing the impact on the planet by reducing,
reducing the plastic packaging, protecting and concerning the water supplies and provide safe
drinking water for the communities in which it works for (Venkataraman, & Summers, 2017).
. The company supports sustainable agriculture while protecting the human rights. Further, it
works to reduce the solid waste production. On the other hand, coca cola commits more towards
sustainable packaging, climate protection, water stewardship and energy management. The
company organizes water programs to support healthy watersheds to balance the use of water in
the process of production. They are committed towards responsible citizenship.
Business ethics: In my opinion Coca-Cola scores grade B on its business ethics as it had faced a
lot of ethical issues in the past, this led the company to slow down the business activities and low
profits. There has been loss of reputation for the company. PepsiCo scores A, as they are more
committed in maintain strong controls over financial report, rigorous business oversight,
effective corporate governance (Benstead & Reif, 2017)..
Social responsibility: In social responsibility, Coca cola scores grade B, as it was accused on
selling banned cans to Africa, it was considered as racial discrimination. PepsiCo scores A, as it
is evident that they value their consumers by improving the diets of the consumers and looking
for promotion of human sustainability (Benstead & Reif, 2017).

7
STRATEGIC MANAGEMENT
Sustainability efforts: Coca Cola scores grade A in its sustainability efforts because of its focused
efforts on water management, its mission is recycling its plastic bottles and waste water
treatment. PepsiCo, scores A, as they ensuring sustained growth by empower people and women.
Conclusion
Therefore, from the above analysis, it has been identified that both the companies Coca-
Cola and PepsiCo are taking initiative to improve their overall sustainability and comply with the
business ethics. Both the companies are a vital player in the industry and tough competition helps
them to bring out the best in them. However, it has been identified and in my opinion, PepsiCo
has performed comparatively better in their sustainability efforts. They efficiently handle their
‘people, planet and product’.
Peer reviews
Peer 1:
Dear xxx
The paper is very information with detailed analysis. It has been very well structured with clarity
in the sentences. The sustainability reports of both the companies Coca Cola and PepsiCo has
been very well reviewed. The paper provides the best aspects of the sustainability report and
compares and contrasts the reports. Throughout the paper, it contained well organized points.

8
STRATEGIC MANAGEMENT
However, I believe many of the ethical issues caused by PepsiCo were overlooked. Yet the work
highlights important data and provides a strong conclusion.
Peer 2:
Dear xxx
The work done by you is excellent, it demonstrate significant key aspect of both the contrasting
companies. The sub-points were very well addressed. It offers a useful summary on the business
ethics, social responsibility and environmental sustainability of Coca Cola and PepsiCo. The
paper has summarized the sustainability report in a very short and concise manner. It is
informative throughout the paper; I came to know about the sustainability initiatives taken by the
companies. I agree on your opinion, that Coca Cola in its past years had faced various ethical
issues which pulled down the reputation of the company, but I also believe that it has taken more
sustainability initiatives than PepsiCo. I also think the paper lacked criticisms and critical
analysis. It needs to be bolder and more analytical. There was little opinion based on the theory
provided in the paper. However, it was a very interesting read.

9
STRATEGIC MANAGEMENT
References
Coca Cola - AnnualReports.com. (2019). Retrieved 16 August 2019, from
http://www.annualreports.com/Company/coca-cola
PepsiCo - AnnualReports.com. (2019). Retrieved 16 August 2019, from
https://www.pepsico.com/docs/album/annual-reports/2018-annual-report.pdf?
sfvrsn=35d1d2bc_2
Venkataraman, S., & Summers, M. (2017). PepsiCo: The challenge of growth through
innovation. Darden Business Publishing Cases.
Benstead, L. J., & Reif, M. (2017). Coke, Pepsi or Mecca Cola? Why product characteristics
affect the likelihood of collective action problems and boycott success. Politics, Groups, and
Identities, 5(2), 220-241.
Makadok, R., & Ross, D. G. (2013). Taking industry structuring seriously: A strategic
perspective on product differentiation. Strategic Management Journal, 34(5), 509-532.
Woolfolk, M. E., Castellan, W., & Brooks, C. I. (2013). Pepsi versus Coke: Labels, not tastes,
prevail. Psychological Reports, 52(1), 185-186.
Koenigs, M., & Tranel, D. (2017). Prefrontal cortex damage abolishes brand-cued changes in
cola preference. Social cognitive and affective neuroscience, 3(1), 1-6.
Yang, C., Pan, S., Mahmud, J., Yang, H., & Srinivasan, P. (2015, September). Using personal
traits for brand preference prediction. In Proceedings of the 2015 Conference on Empirical
Methods in Natural Language Processing (pp. 86-96).
Elangeswaran, S., & Ragel, V. R. (2014). The influence of brand association on customer
preference: a study on branded carbonated soft drinks. IUP Journal of Brand
Management, 11(2), 38.

10
STRATEGIC MANAGEMENT
Brick, D. J., Fitzsimons, G. M., Chartrand, T. L., & Fitzsimons, G. J. (2017). Coke vs. Pepsi:
Brand compatibility, relationship power, and life satisfaction. Journal of Consumer
Research, 44(5), 991-1014.