Diversification: A necessity

Posted by | June 28, 2007 | Weblogs | No Comments

On my earlier post of ‘changing for better’ I reiterated the importance of healthy living, now I understand this is a global phenomenon, wherein the majority are trying to lead a healthy life. This change in outlook has affected two major ‘names’ in the stock market. I am talking about ‘coke’ and ‘Pepsi’. Todd Sullivan in his article “Coke vs. Pepsi: Diversification’s the Name of the Game”, in seeking alpha has traced the growth and diversification aspect of both coke and Pepsi.

In his opinion ‘coke’ seems to be doing the ‘catching up’ act and Pepsi seems to hold the roost as far as diversification is concerned in areas, like ‘tea’ and ‘water’. Now I wonder why coke has lost all its fizz and is lagging behind in diversification.

Diversification is the key word today and when Beverages Company like coke and Pepsi already have a brand name, it should only be easier for them to venture into related sectors! Is it the business plan that is suffering in case of coke or the failure to foresee the future?

Now Sullivan says that he would stay away from buying both coke and Pepsi! I wouldn’t comment on that. But in the long term one thing is sure; people are looking for a cleaner and healthy life so wont it be better for coke to take the cue!

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