Merger, Acquisition, and International Strategies
Write: Sarah A. Morton
Instructor: Harry Mamaux
Course: Business Administration Capstone – BUS 499
Date: December 1, 2013
* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. Coca-Cola Company history originated in 1886 when the “curiosity of an Atlanta pharmacist, Dr. John S. Pemberton, led him to create a distinctive tasting soft drink that could be sold at soda fountains” (Coca Cola History, 2013, para. 1). He generated flavored syrup, took it to his neighborhood pharmacy, “where it was mixed with carbonated water and deemed “excellent” by those who sampled it” (Coca Cola History, 2013, para. 1). Dr. Pemberton’s partner and bookkeeper, Frank M. Robinson, is credited with “naming the beverage “CocaCola” as well as designing the trademarked, distinct script, still used today” (Coca Cola History, 2013, para. 1). The Coca-Cola Company is not just an average beverage company. The Company owns/licenses and markets in excess of 500 nonalcoholic beverage products, mostly sparkling beverages but also a assortment of still beverages, for instance; “waters, boosted waters (for example, Oasis, Powerade and Vitamin Water), juices and juice drinks (for example, Minute Maid and Five Alive), ready-to-drink teas and coffees, and energy and sports drinks” (Coca Cola History, 2013, para. 5). Coca Cola most popular nonalcoholic sparkling beverage brands are Coca-Cola, Diet Coke, Sprite, Fanta, Dr. Pepper and Schweppes which they market worldwide. Coca Cola Company has a market capitalization of “$177.48 billion and is the largest company in the Food and Beverage sector” (Coca Cola Company, 2013, para.1). Whether you’re out shopping, working in the office or the gym, ZICO Pure Premium Coconut Water delivers the natural replenishment you require to renew. As of November, 2013 “Coca-Cola Company and ZICO Beverages LLC announced that Coca Cola has acquired the outstanding ownership stake in ZICO” (Coca Cola Acquires, 2013, para. 1). The merger will unlock more “capability for ZICO including marketing, selling, manufacturing, innovation and distribution opportunities” (Coca Cola Acquires, 2013, para. 1). Not only will this merger benefit ZICO, but the Coca Cola Company will gain a top position in one of the fastest rising beverage categories in the world. This final move concludes the relationship that began in 2009 when Coca-Cola’s Venturing and Emerging Brands (VEB) business unit first invested in ZICO. In 2012, the Coca Cola Company acquired a bulk stake in the brand. And earlier this year, ZICO took its home on the unique red Coca-Cola trucks to be circulated throughout the U.S. and Canada. When Coca Cola initially invested in ZICO, they did so because they saw it as a “burgeoning premium brand with the potential to be significant leader in a high growth category” (Coca Cola Acquires, 2013, para. 4). Over the past 4 year, Coca Cola has observed the coconut water industry spear revenue impressively and gain household penetration. ZICO itself solidified its place as one of the primary brands in the coconut water industry. With this acquisition, Coca Cola plans to modernize all characteristics of the consumer experience and intensify both rate and delivery to place ZICO at the top and continue even more growth within the company. * For the corporation that has not been involved in any mergers or acquisitions, identify one (1) company that would be a profitable candidate for the corporation to acquire or merger with and explain why this company would be a profitable target. Grocery shopping is more difficult and complex than ever before. Today’s customers are more health mindful than customers of the past. Customers are more prone to buy specialty...
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