Big Mac or Coke: who's got it right?

re: Big Mac or Coke: who's got it right?

Kevin Gordon — Mon, 27 Apr 2009 15:56:44 GMT

Considering the amount of money involved, I doubt if either have got it wrong. They simply have different goals and objectives because they are different companies. The only place they meet is at McDonalds, and that is a marriage of business deal convenience rather than long term strategy.

re: Big Mac or Coke: who's got it right?

Princewill Omorogiuwa — Sun, 01 Jul 2007 18:52:31 GMT

Granted that they have a huge property asset. McD will struggle to expand in places like Sub-saharan african Africa where the brand can only be preceived (not postiopned) as a premium brand. This will restrict market penetration and take longer for the investment in the franchise to payback. It will have to radically reeengineer its supply chain to make a profit. This means its international expansion will be limited to the relativley rich rich countries where it already has presence. Cocacola on the other hand, has a supply chain structure that plugs into local supply chains, with local manufacturing. This has enabled it not only to penetrate international markets deeply but more importantly to also understand these markets. The company has been able to develop its distribution infrasture to become a source of competitive advantage that even pepsi has struggled to replicate. I do not agree that the brand will be less valuable the more people drink it? The promise of a' guaranteed' positive future cash flow is a significant indicator of the value of a brand.

re: Big Mac or Coke: who's got it right?

John Dawson — Mon, 25 Jun 2007 12:38:38 GMT

Another way of looking at it. Coke can be regarded as a distribution company (or series of distribution companies) with some great brands. As long as people keep drinking then Coke will be OK but the brand itself will become less and less valuable. As for McD, they have amazing skill in properly and their international expansion has further to go that for Coke. They have a much more difficult branding task than chameleon Coke – it’s riskier and they are in decline. I think i’d rather take my chances as Coke where at least my revenues are going to be firmer.

re: Big Mac or Coke: who's got it right?

Princewill Omorogiuwa — Sun, 17 Jun 2007 22:59:27 GMT

You imply that Cocacola' s approach to growth by acquisition and by implication, its branding strategy represents a new reality for the company. Not necessarily. The company has been a house of brands since the 50's. It's appetite for acquisiton that has lead to its 400 odd brands today, began in 1960, when it acquired minute maid. A house of brands does provides a certain reassurance when you have brands that effectively keeps you relevant in the market place. As a company you will be less prone to the market flux. But building a portfolio of successful brands either organicaly or through acquisition is far from a lazy as you describe it. There are risks not least that of integration. I find it more ambitious because the firm could be moving out of their own comfort zone. I therefore find it quite striking that you describe McDonalds approach that will be keep it within its own sphere of excellence and experience as more ambitious and risky. Being more focused can be an advantage today granted that they still need to compete as an organisation. For an global brand whose core target customers are being bombarded with messages of obesity and 5-a-day you cannot help but ask the question, where will tomorrow's growth come from? So Mark, my verdict; Cocacola will remain and succeed as a house of brands. For Big Ronnie, rejuvenation is desprately needed but only to prevent them from decline. They have no choice in the future but to become a 'silent' house of brands.