Pepsi & Coke, a Total Quality Management Perspective
Pepsi & Coke, a Total Quality Management Perspective
Shanza Javaid MB-09-52 Salman Saeed MB-09-82
Mehak Munir MB-09-30 Aasfer Javed MB-09-62
Qurat-ul-ain Raza MB-09-22 Abdul jaleel MB-09-68
Ali Zain Raza MB-09-18 Anum Noukhez MB-09-78
Salman Saeed MB-09-82 Sania Ijaz
MB-09-100
Mavra parvaiz MB-09-10 Kamran Chohan MB-09-110
Submitted To Mr. Ahmed Nabeel
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Pepsi & Coke, a Total Quality Management Perspective
Executive Summary
This report is a detailed step by step description of the processes at Pepsi and coke. It outlines the
practices and standards followed at both the beverage giants. Starting from their introduction,
carrying through the processes and ending finally on a description of the traditional rivalry. The
report carefully examines and describes the implementation of standardization in the production
facilities. Images from a personal visit reflect the details of operations and quality management
that is carried out through both the organizations.
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Pepsi & Coke, a Total Quality Management Perspective
Acknowledgement
Let not any mention be made in terms of acknowledgement before it is directed towards the Lord
of heavens and earth. Everything is guided by His will and we are thankful to Him for having
provided us this opportunity through His vessel.
We would like to thank Sir Ahmed Nabeel for pushing the bar higher by giving us a task
unmatched and unparalleled by any other we have done before in the pursuit of academics. This
has been a very tiring journey and the result is this report. We will like to extend our gratitude
and apologies for not having done our best due to the time barrier. Such a vast topic requires
more than a complete term.
Once again we are thankful to Mr. Ahmed Nabeel for having provided this learning opportunity.
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Pepsi & Coke, a Total Quality Management Perspective
Acknowledgement.......................................................................................................................................5
Introduction.................................................................................................................................................7
A Brief History of Coca-Cola (Global)....................................................................................................7
Coca-Cola in Pakistan.........................................................................................................................7
A Brief History of Pepsi (Global)............................................................................................................9
Pepsi in Pakistan................................................................................................................................10
Management Hierarchy at Coca-Cola........................................................................................................11
Management Hierarchy at PepsiCo (SCL).................................................................................................12
Process......................................................................................................................................................13
Inputs.................................................................................................................................................13
Stages................................................................................................................................................13
Quality Test...........................................................................................................................................15
Coca-Cola SWOT Analysis.......................................................................................................................15
Strength.............................................................................................................................................15
Opportunities.....................................................................................................................................15
Weaknesses.......................................................................................................................................15
Threats...............................................................................................................................................16
Pepsi SWOT Analysis...............................................................................................................................16
Strengths............................................................................................................................................16
Weaknesses.......................................................................................................................................16
Opportunities.....................................................................................................................................17
Threats...............................................................................................................................................17
Communication & Employee Participation...............................................................................................17
Conclusion.................................................................................................................................................18
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Pepsi & Coke, a Total Quality Management Perspective
Introduction
A Brief History of Coca-Cola (Global)
Coca-Cola is a carbonated soft drink sold in the
stores, drink corners, restaurants, and vending
machines of more than 200 countries. It is produced
by The Coca-Cola Company of Atlanta, Georgia,
and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in
the United States since March 27, 1944). Originally intended as a patent medicine when it was
invented in the late 19th century by John Pemberton, Coca-Cola was bought out by
businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the
world soft-drink market throughout the 20th century.
The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout
the world. The bottlers, who hold territorially exclusive contracts with the company, produce
finished product in cans and bottles from the concentrate in combination with filtered water and
sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and
vending machines. Such bottlers include Coca-Cola Enterprises, which is the largest single Coca-
Cola bottler in North America and Western Europe. The Coca-Cola Company also sells
concentrate for soda fountains to major restaurants and food service distributors.
Coca-Cola in Pakistan
“To provide Coca-Cola at arms ‘length”
The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are
the brands with whom Coca-Cola is operating in Pakistan. The Coca-Cola System in Pakistan
operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages
Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala,
Faisalabad, Rahim Yar Khan, Multan and Lahore. The Coca-Cola System in Pakistan serves
70,000 customers/retail outlets. The Coca-Cola System in Pakistan has nearly 3,000 people
working constantly for the company. During the last two years, The Coca-Cola Company in
Pakistan has invested over $130 million (U.S) and coke has successfully provided 58 years of
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Pepsi & Coke, a Total Quality Management Perspective
dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm
has been continuously changing its slogans and that’s a very creative idea to get the attention of
the customers.
Transformation of slogans of coke since the journey started, all the way to Pakistan
1886 Drink Coca-Cola
1908 Get the genuine
1923 Enjoy thirst
1934 When it's hard to get started, start with a Coca-Cola
1942 The only thing like Coca-Cola is Coca-Cola itself
1956 The friendliest drink on earth
1963 Things go better with Coke
1993 Always. Coca-Cola
2001 Life is Good
2003 Jo Chaho Ho Jaye Coca Cola Enjoy
2004 Flight Of Delight
2005 Galay Delicious Taste
2006 Thanda matlab Coca Cola
2007 Khaly pily jila Coca Cola
2008 Aja jashan mana ly
2008 Brrrrrrrrrrrrrrrrrrr!!!
Today CCBPL is operated directly under the supervision of the Coca-Cola International based in
Atlanta Georgia State___ USA .It owns 8 plants all around in Pakistan. Coca Cola Company
offers the brand range as Coca Cola, Diet Coke, Fanta, Sprite and Kinley water in Pakistan.
Coca-Cola introduced in Pakistan 1953
Fanta introduced in Pakistan 1965
Sprite was introduced 1972
Diet Coke & Fanta Lemon 2001
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Pepsi & Coke, a Total Quality Management Perspective
A Brief History of Pepsi (Global)
Pepsi is a carbonated soft drink that is produced and
manufactured by PepsiCo. Invented in 1883 and
introduced as "Brad's Drink", it was later renamed as
Pepsi-Cola on June 16, 1903. Pepsi was first
introduced in New Bern, North Carolina in 1883
by Caleb Bradham, who made it at his home where the drink was sold. Bradham sought to create
a fountain drink that was delicious and would aid in digestion and boost energy.
In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse.
That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce
bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield
was the first celebrity to endorse Pepsi-Cola, describing it as "A bully drink...refreshing,
invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was
then used over the next two decades. In 1926, Pepsi received its first logo redesign since the
original design of 1905. In 1929, the logo was changed again.
In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy - in
large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a
result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight
years later, the company went bankrupt again. Pepsi's assets were then purchased byCharles
Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained
soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give
him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup
formula.
On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered the
opportunity to purchase the Pepsi-Cola company and it declined on each occasion
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Pepsi & Coke, a Total Quality Management Perspective
Pepsi in Pakistan
Pepsi was introduced circa 1979 in Pakistan. This was a time when Coca-Cola had already
managed a 72% market share in the Pakistani market. However, in 1980 Pepsi was offered as a
franchise in agreement with Coca-Cola and they came to be known as Pepsi Cola.
Today Pepsi is operated by independent contractors who have attained production licenses from
the international offices of Pepsi. A few of these bottlers are Haidiri Beverages, Shahi Beverages
and Shamim and Company (Pvt Ltd). For our report, we will be referring to Shamim and
Company (SCL) since it suits our vicinity.
Shamim & Co (Pvt Ltd)(SCL)
“We bring you Pepsi, its the Cola”
SCL became a franchisee of Pepsi Cola International under license in 1973. SCL has a sales
force of more than 300 skilled personnel selling and delivering four of the most consumed
carbonated soft drinks brands to nearly 20 million people in the region every day. We focus on
superior sales execution, customer service while maintaining highest international quality
standards in our operating excellence. According to SCL, company’s policies reflect the
emphasis on superior manufacturing quality standards, competitive sales capability and customer
satisfaction oriented services round the clock so that customers get the best of the carbonated soft
drinks in the region delivered to their doors.
SCL’s Mission Statement
"We Bring You Pepsi - It's The Cola". But that's not it; we also bottle the fastest growing
carbonated soft drinks like the Mountain Dew, Mirinda Orange and the 7-UP.
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Pepsi & Coke, a Total Quality Management Perspective
Management Hierarchy at Coca-Cola
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Pepsi & Coke, a Total Quality Management Perspective
Management Hierarchy at PepsiCo (SCL)
Managing Director
General Manager Technical General Manager Sales General Manager Finance General Manager Operations
Manager Production Manger Sales & Marketing Manager MIS Manager Admin
Manager Quality Control Manager Research & SIS Manager Finance Manager Personnel
Manager Account Manager Shipping
Manger Sales &
Marketing
Regional Manager
Sales & Marketing
Area Manager Sales
& Marketing
Drivers
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Pepsi & Coke, a Total Quality Management Perspective
Process
The production process is pretty similar for both the concerns. The only difference lies in some suppliers
for basic raw material such as sugar. However, the quality standards remain the same.
Inputs
Water:
The water used in the production of Pepsi’s beverages is pumped from the natural
underground reserves. Heavy duty pumps extract water from 500 ft below the ground. This water goes
through a number of purification processes before it is suitable to be used in a beverage. Water is also
used for washing the bottles and this water is treated in a different way to reduce the hardness of water.
Syrup:
Syrup is made by adding sugar to water. The sugar used is not the one sold in market.
This is refined sugar, free of bacteria and impurities.
Concentrate:
This is imported from the headquarters. This is the secret recipe that makes both the
drinks so special.
Stages
Pepsi Coca Cola
1st Stage (Getting Treated Water):
‘Lime’, Farris Sulphate (for iron) & chlorine are
added to raw/hard water & it goes in “chemical tank” where
carbonates and bi-carbonates settle down, & they get treated/soft
water.
2nd Stage (Preparation of Simple Syrup):
Simple “Syrup” is made by mixing up sugar into water after pasteurization of
water at “85ºC”. After ‘stay’ for a time period, this simple syrup is filtered & then cooled down
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Pepsi & Coke, a Total Quality Management Perspective
at “19º C”. Water is heated/boiled & cooled down at extreme temperature to avoid germs-growth
at normal temperature like “32º C to 35º C”
3rd Stage (Preparation of Finish Syrup):
Now this simple syrup goes into “syrup storage tanks”. ‘Concentrate’ & flavor are
added to simple syrup & it is called “finish syrup”.
4th Stage (Washing Empty Returned Bottles):
Empty returned bottles pass through steam
under “57 ºC to 77º C”, and then these are cooled down.
This process-step takes 45 minutes. Now bottles are washed
by “Caustic-Soda”, ‘TSP’ and water. Now a light-test is
conducted for these treated bottles, where the bottles pass in
front of a light.
5th Stage (Filling Section):
Now syrup & treated water come to
“Carbon Cooler” in which NH3 (Ammonia) chips,
are used for cooling purpose. ‘Co2’ gas also comes
in Carbon Cooler. After a flow-mix in Carbon
Cooler, the resultant drink comes into ‘filler’, where
empty washed bottles are filled.
6th Stage:
Now bottles come to “Crowner” where these are crowned then bottles pass
through a light test to have a check for overfilled, under filled or any deficiency.
7th Stage:
After passing through “printer”, the “casing” of bottles is
made, & at last shipping hand over is there.
Quality Test
Quality-Tests for raw material:
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Pepsi & Coke, a Total Quality Management Perspective
Sugar quality test is called “Brix”.
Concentrate test.
Water treatment tests.
Upper tap test.
San filter and carbon purifier test.
Water softness test.
Finished bottle test i.e. light test.
Microbiological test by chemist after a week
Coca-Cola SWOT Analysis
Strength
Popularity
Well known
Branding obvious and easily recognized
Financial support
Customer loyalty
International trade
Opportunities
Many successful brands to pursue
Advertise its less popular brands
Buy out competition
More brand recognition
Weaknesses
Word of mouth
Lack of popularity of many Coca Cola brands
Most unknown and rarely seen
Result of low profile or non-existent
Threats
Changing health-conscious attitude
Legal issues
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Pepsi & Coke, a Total Quality Management Perspective
Health regulations
Competition (Pepsi)
Pepsi SWOT Analysis
Strengths
Quality in terms of product service
Quality of people (trained, motivated, committed)
Better sales planning
Vital role in economic development
High profit rate
Rapidly increasing market share
Strong image of PEPSI in consumer’s mind
In time service of supplies and technical assistance
More installation of post mix machine
Strong financial position
Rapidly increasing market share
Weaknesses
Poor feedback from employees
Insufficient salaries
Monopoly of distributors cause harm to company
No advertisement budgets for post mix.
No signage’s of post mix in the market
No promotional activities in post mix.
No availability of spare parts.
No proper workshop for post mix.
Opportunities
New style management
New brand introduction
Low cost skilled person availability
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Pepsi & Coke, a Total Quality Management Perspective
Opening of new outlets
Strong consumer commitment with Pepsi.
Threats
Coca- Cola is on its way to get market share
Amrat and Makka cola also trying to get market share
Changes in consumer purchasing power
Increase in competition
Inflation
Due to blame of religious group
No proper employee’s orientation programs
Communication & Employee Participation
Communication is one of the most important aspects of manufacturing concerns of this scale. However, it
is beyond any doubt that both Pepsi and Coke have a transparent and effective communication system.
During our visits to the production facilities, we witnessed a coherent setup of transference of messages
across the line of command. The managers are responsible for keeping their teams aware of the direction
of the company. Weekly meetings are held between higher level managers to keep sure everyone is on the
same mindset. Issues and concerns are addressed these meetings.
Employees are a key element of both production facilities. Their contribution, not only to the processes,
but to the smooth running of the organization is considered essential. There are suggestion boxes
throughout the facilities that allow employees to give their feedback or inputs on matters of importance.
Employees are well compensated to ensure continuous motivation on their part. However, their
compensation relies heavily on their performance. This also leads to cutbacks in the salaries if targets
aren’t met. The rewards, however, remain countless. A general chit chat with the employees who were
assisting us with the visit reveals a substantial element of job satisfaction. The employees take pride in
their work and act in the best interest of the company. It is very safe to assume there aren’t many
differences in the employee satisfaction and empowerment at both the organization. Even the
organizational structures, based on a general management model reflect the same priorities.
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Pepsi & Coke, a Total Quality Management Perspective
Conclusion
The traditional rivalry between Coke and Pepsi seems justified after a closer look at their
production processes. However, the scenario in Multan city apparently gives an edge to Pepsi.
The plant here can manufacture up to 250000 (two hundred and fifty thousand) cases a day
against Coke’s meager production of 14400 (fourteen thousand four hundred) cases a day. Also,
Pepsi engages in the production of multiple products like PET bottles and Sting energy drink
whereas Coke produces its star drink only. It wasn’t until we started studying both the
organization in detail that we saw the bigger picture. Coka enjoys market leadership throughout
the world. However, countries South Asia (Pakistan, Sri Lanka, Nepal) are ruled by Pepsi when
it comes to market share. The reason may be the difference in taste. Quality standards at both the
organizations are a matter of great scrutiny by the headquarters. Headquarters of both the
companies make sure they constantly keep a quality check on the product by random testing of
products from locations across the nation. This had lead both the company’s to establish
themselves in the image of superior quality by meeting customer needs in a very profitable
fashion.
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