Consumer Nation
- Six Pack: Beer Buzz of the Week
- Time for Flash Sales to Adapt or Die
- What Flash Sites Are Suggesting About Consumers
- Building a Beer Brand, One 'Like' at a Time
- The Six Pack: Beer Buzz of the Week
- Wal-Mart's Strong Earnings Overshadow Bribery Allegations
- Lesson for JCPenney: Consumers Are Addicted to Deals
- Fuel Prices Trump Unemployment as Risk to Retailers: Study
- The Hot Beauty Product You Never Heard Of
- The Six Pack: Beer Buzz of the Week
RSS FEED
MOST SHARED
- Why German, UK Bond Yields Will Go Even Lower
- Newedge to Leave Greek Stock Market
- Greek Party Leading Polls Pledges 'Business-Friendly' Country
- Greece to Leave Euro Zone on June 18: Wealth Manager
- Southern Europeans Wire Cash to Safer North
- With or Without Euro, Europe Must Raise Its Game
- Italy 2-Year Borrowing Costs at Peak Since December
- Fresh Fears as EU Finalises Reform Plans
- Lloyd's of London Prepares for Greek Exit-Paper
- As Bank Loans Dry Up in Spain, Small and Medium Businesses Fight for Life
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
- Leading Broker to Leave Greece Stock Market
- Greece to Leave Euro Zone on June 18: Wealth Manager
- Main Players in the Greek Election
- Italy 2-Year Borrowing Costs at Peak Since December
- Euro Bond Wins Supporters, but Details Remain Vague
- German, UK Bond Yields Will Go Even Lower
- Labor Board Member Resigns Over Leak to GOP Allies
- £82.5 MN Loan Scheme Launches for Youth Business Start-Ups
- Southern Europeans Wire Cash to Safer North
Coke Shouldn't Tread Where PepsiCo Is Heading: Isdell
Text Size 
News Editor
Former Coca-Cola Chairman and CEO Neville Isdell says he's watching PepsiCo's attempt to buy its two largest bottlers with great interest, but he wouldn't suggest Coke tread down the same path.
 |
AP |
"There are synergies," he says. "There would be synergies for Coke to do it, there's no question about that, but the question is: what are the unseen disadvantages?"
According to Isdell, the franchise system sets up a healthy "friction level" between the manufacturer of a product and the franchisor of a brand. This relationship raises the discussion about the concerns over the day-to-day business to the level of CEO-to-CEO dialogue.
"When that (relationship) is not constructive, that's an issue, but when it is constructive, it is proven to be a great, great model," Isdell says.
He cited McDonald's [MCD
Loading...
()
] as a good example of where the franchise system works. (For more on Isdell's thoughts on this subject, watch the video below.)
"At the end of the day, there is value to that debate. There is value to the friction, and therefore, the diseconomies — and there are diseconomies in the system — are more than compensated by the value of the system," he says.
This wouldn't be the first time Coca-Cola [KO
Loading...
()
] and Pepsi [PEP
Loading...
()
] have approached their businesses in radically different ways. Most notably, Pepsi has diversified beyond soft drinks into snacks and food to the point that Frito-Lay is its largest business unit.
According to Isdell, there are few synergies between the food and beverage businesses.
"The distribution systems are different," Isdell says. "The synergies are not, not major."
But some have speculated that if Pepsi is successful in its overtures to Pepsi Bottling Group [PBG
Loading...
()
] and PepsiAmericas [PAS
Loading...
()
] this would put pressure on Coke to make a similar move with its largest bottler Coca-Cola Enterprises [CCE
Loading...
()
].
Pepsi is arguing that the merger will yield cost savings and make it more nimble in reacting to changes in the marketplace, which is increasing shifting away from carbonated beverages toward teas, waters and juices. So far, the bottlers are resisting, and a long battle could be ahead.
Pepsi Bottling has rejected the $4.2 billion offer from PepsiCo to buy the remaining two-thirds stake it doesn't already own, calling it "grossly inadequate." PepsiAmericas, the smaller of the two bottlers, has done the same.
Data is a real-time snapshot *Data is delayed at least 15 minutes
