Answer: Pepsi

Questions

1. What factors do you think contribute to the very different market performance of these companies?
2. Which products do you personally prefer?  Would you make an investment decision based on your personal product preference?
3. Pepsi also has diversified into the snack food business and owns Doritos, Cheetos and Sun Chips while Coke has diversified into the coffee business. Knowing this, which company do you think has better long-term prospects? Explain.

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Forbes)

He sees the company’s [Pepsi's] diversification into snack business as a source of competitive advantage over Coke. “For example, its success with snacks is something that Coke hasn’t been able to match, says Anwar. “Its Frito-Lay business, which owns Doritos, Cheetos and Sun Chips, has been showing stronger growth in sales and operating profit  over the past few years. This competitive advantage, coupled with the company’s success from its water business, will continue to help Pepsi stock and keep its momentum going.”

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Like this company competition, here's some additional ones:

• Disney vs. Netflix
• Nike vs. Under Armour

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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