Problem
The Coca-Cola Company is a total beverage company with products sold in more than 200 countries and territories. The company's purpose is to refresh the world and make a difference with a portfolio of brands including Coca-Cola, Sprite, Fanta, and other sparkling soft drinks.
A significant part of Coca-Cola's success is its emphasis on brand over product.
In 2019, Coca Cola acquired Costa Coffee.
Costa Coffee is a British coffeehouse chain with headquarters in Dunstable, England. Costa Coffee was founded in London in 1971 by Sergio Costa as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops before expanding into more than 2,400 coffee chain stores across Europe with footprint in China.
1. Using concepts of Mergers & Acquisitions, critically discuss the business strategy behind the acquisition of Costa Coffee by Coca-Cola. Evaluate the pros and cons of this acquisition as well.
2. Freely discuss the type of acquisition strategy used by Coca Cola to acquire Costa Coffee.
Is this a horizontal or vertical acquisition? If this is a horizontal or vertical acquisition, why is it so? Is this a forward or backward integration? If so, why? Please provide convincing supporting arguments for your choices.