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May 28, 2007

Coca-Cola / Pepsi-Cola Acquisitions: Strategic Planning Issues

Analysis of: Coca-Cola Is Said to Buy Vitaminwater | www.nytimes.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Tom Pirko
President, Bevmark LLC
Implications: Pressure to grow in new beverage categories is intense, yet the major soft drink companies are finding the costs and risks of innovation away from carbonated soft drinks to be difficult.   A competitive buying frenzy is about to begin, but can the bottlers, programmed to sell cola, effectively accommodate the new acquisitions? 

Analysis: Coke, Pepsi and Cadbury are being forced to reexamine their strategic models, based upon carbonated soft drinks (cola, lemon-lime and orange), and move to new beverage categories.  They must either invest heavily in risky innovation or targeted acquisitions, transferring resources away from the iconic brands.  There is a fight within the companies over how resources will be allocated, with conservative forces resisting changes to the traditional soft drink model. 

They must also renovate bottling to make it flexible enough to provide manufacturing and sales distribution of all the new products; a major problem.

Other Analyses of the Same Source Article:
Can Coca Cola Execute and build on Vitaminwater?
August 29, 2007, Author: GLG Expert Contributor
The water will flow faster at KO than it will at Pepsi.
June 4, 2007, Author: GLG Expert Contributor
Coca-cola needs to watch out its claims if it is to shake up the functional food niche market
May 31, 2007, Author: GLG Expert Contributor
Title: Coca-Cola purchases a Health Drink Company – Energy Brands
May 29, 2007, Author: GLG Expert Contributor
The Energy Brands acquisition - more than meets the eye
May 29, 2007, Author: GLG Expert Contributor
Coca Cola gets Vitamin boost!
May 29, 2007, Author: GLG Expert Contributor

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