http://today.reuters.com/news/articlebusiness.aspx?type=consumerProducts&storyID=nN26366190&from=business
Ok... So I was trying to find the article concerning either Coca-Cola or PepsiCo buying out some shares of Starbucks, but I couldn't find it. Anyway, in my search for this I typed in "Pepsi buys" in the Google News Search Engine through Archives, and it was amazing to look at all the different other companies that they hav ebought out. Mountain Dew, Juice Companies, Alcohol companies, etc. So, coming back to more current events, I took a look at Pepsi Buying out the juice company IZZE.
IZZE has beverages like sparkling apple and sparkling grapefruit, and other fruity sparkling juices. Pepsi wanted to buy this company to have an alternative to their soft drinks, and an alternative to the sugary drinks they own (appealing to the masses, people tha tdon't like soda, diabetics/dieters, etc). The drinks are all cafeine free and the sugarsd are from fruit juice, not refined sugar. This article goe son to say tha tPepsi was looking to add it to the list of different options, like Tropicana, SoBe, energy drinks, Aquafina, and the joint ventures (at that time anyway, now I think they really did make this deal) with Starbucks and Lipton iced Teas. On the day of these discussions/deals, the PepsiCo shares rose 13 cents.
So we all know that Pepsi and Coke are part of an oligopoly for soft drinks. Well actually, it's pretty much those two taking this over. But essentially, they operate on the oligopoly/monopoly levels, using characteristics from both since they are both so big. They clearly like to buy up competitors, but they also buy up smaller companies, like IZZE so they can monopolize the drink market but so they can COMPETE with the other member of hte oligopoly. It's much more difficult to enter this market, becuase it is hard to compete with such monstrous coroporations, but in this case, I don't think it would be as difficult to leave the market because if Pepsi wanted to leave the market, Coke would probably jus tbuy them up. But that would create a monopoly, and I'm not so sure how the governmen would feel about that. Oh that darn Pepsi. THey also bough the Naked drinks in 2006, as well. But in comparison, when you look ups Coke buys, you turn up just as many results for drink companies that Coke bought. I find it interesting that there is an article about Pepsi buying Tropicana from Seagrams back in like, 1998, and that likewise, there is an article about Coca-Cola buying Seagrams mixers drinks....So they broke apart a drinking company and each took a piece.
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2 comments:
those darn jerks. why do they have to own everything? haha. but it is an extremely smart idea. Own soda and juice (and coffee) and appeal to a larger amount of people. as well as producing complimentary goods to boost their sales twice over.
Isn't it amazing what they'll do to lesson competition - but then to increase their own ability to compete with what they see as "#2"?
EXCELLENT job on the analysis - this is exactly what an oligopoly will do.
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