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Why Coca-Cola acquired Costa Coffee instead of Starbucks?

Why Coca-Cola acquired Costa Coffee instead of Starbucks?

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Expert Solution

Coca cola had acquired the Costa coffee instead of Starbucks because of following reasons-

A. it was a comparatively smaller company and acquisition of this company was very easy because the Coca-Cola did not have to offer a large amount of money.

B. Coca-Cola will be having a better amount of control over a small company rather than a Starbucks because there would have been a lot of conflict between the stakeholders of the company.

C. This deal has gained the Coca-Cola an access into the Other products than soda so it has given the Coca-Cola and opportunity to diversify itself at a lower possible cost into the the Asian and European market

D. this was our new product line and Coca-Cola was trying to go into it with a smaller scale

E. Starbucks is not a profit making company in majority of the other countries other than United States of America, So acquisition of Starbucks would have costed money but it had not yielded benefits.


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