Nestle And The Coca-Cola Company Case Study

This type of agreement between companies is usually developed when a concrete project requires a very high investment, both capital and time, to undertake it separately. Another characteristic of these types of contracts is that companies at no time lose their identity of company, remain totally developing and operating its core business, regardless of the common project being carried out. However, a weakness to this type of union between companies is that each one of them has its own culture and that can hinder the common work between both. (Langie, 2013)
Nestlé and The Coca-Cola Company focused on the ready-to-drink tea business. The joint venture received its current name, Beverage partners worldwide (BPW), in 2001, but was founded as the Coca-Cola Nestlé Refreshments

In Coca cola – Nestlé’s case, the ideology fact, because of the culture, meant a significant problem. Although the product’s success was pretty effective and the brand recognition hit enormously in the market, there were many aspects that were not the most beneficious for both sides. As I mentioned before, this joint venture meant a union of support and of complementation, where Nestle was looking for a greater brand recognition and also a more extensive distribution of the product created. While Coca Cola was looking for economical earnings and improvements through the creation of a new product based on a Nestlé’s formula and a name given. The case was that at the time of execution, Coca Cola was contributing much more than Nestle and the profit obtained was divided 50% and 50%, agreement that resulted no beneficial for Coca Cola, given all the contribution it gave to the joint. Coca Cola had the brand recognition enough to bring an excellent distribution of the project and also had the equipment exactly necessary for the development of the product’s creation. Nestle, instead, was technically just contributing with a name and a caffeine formula, so this idea wasn’t convenient for one of the