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

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.