Two Reasons for Pepsi to Think Twice About Sodastream
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In article, “Two Reasons for Pepsi to Think Twice About SodaStream”, the author Kyle Stock discussed an Israel-based company called SodaStream has quickly become a new power in the market. The potential benefits for Pepsi to buy SodaStream International are also being mentioned in the article.
In the soft drink business market, Pepsi and Coca-Cola are the two giants, and have established numbers of subsidiaries under their names. Because of the financial capability of both Pepsi and Coca-Cola are very strong, none of two parties can easily surpasses another in current business area. Usually, when a company, like Pepsi and Coca-Cola, grow into a certain level, it can be expanded by purchasing other new competitors in the market. However, even these kinds of acquisitions usually happen in same business area, there are many cases that big company couldnt run new acquisition properly and got itself into trouble. Despite the possible benefits that Mr. Stock explained in the article, I think if Pepsi does buys SodaStream, it will be a double-edged sword for Pepsi. On the one hand, even though SodaStream and Pepsi are both in soft drink marketing, SodaStream is focusing on do-it-yourself (DIY) soda machines and syrups instead of selling bottle of soft drink. SodaStream has grown very fast in past few years, by using Pepsis selling network to promote the DIY drink, DIY drink has a great chance to become popular; and it will definitely decrease the Pepsi sales of soft drink. On the other hand, if the DIY soda takes part of the market share or even become a trend of soft drink, it will also impact Pepsis biggest competitor which is Coca-Cola. If this situation happens, it gives Pepsi instant advantage on DIY soda over Coca-Cola since Pepsi have started the new business first.