Coke, Monster Bid All About ‘fit And Focus’
Part of running a great company is admitting when you can’t do it all. In distinct ways, CEOs Muhtar Kent of Coca-Cola and Jeff Immelt of General Electric are proving this point. At Coke, Kent has been struggling with a weak set of brands in the fastest-growing area of beverages – energy drinks. The news today is that Coke is paying $2.15 billion for one-sixth of Monster Beverage, the number two player in energy-boosting soft drinks. Coke needs a strong entry in energy drinks given that 70% of its business is from traditional sodas, a product that’s in serious decline in the developed world. At GE, Immelt is reportedly looking to sell the revered GE appliances division, maker of stoves and refrigerators for a century and a fixture of countless American homes. This business is still profitable. But it has low margins and high fixed costs, and the global appliance industry is dominated by big Asian and European competitors.
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