Coca Cola brand is not a competitve advantage anymore! if CCA got the fundamental wrong

There are certain optimistic views on CCA, especially because some investors believe in the value of Coca Cola Brand and its flagship product,Coca Cola. I agree that Coca Cola is more well-known than any of the beverage products on the market and its long history is making it a good investment.

However, I believe the worst of CCA is yet to come, in term of its ability to generate return. Although strong brand and long history are some of the most important core competence for coca cola amatil, Remember strong brand value does not necessarily translate into product sales and higher profit margin. Usually, only the "right" product with strong brand can generate great return.

So, is coke the "right" product? Unfortunately, more people are turning away from soft drink and the society as a whole is more health-conscious. Even though there are still a lot of people who drink coke, the market is shrinking. Consumers are less loyal to coca coka, especially under the current tight-budget sentiment, when homebrand or Pexi sell for half of the price.

I believe the profit for CCA is going down hills, until it is able to diversify its products and generate more returns from other categories of beverages, such as sport drinks and juices. But, it will take a while, because currently over 60% of revenue is from coke.

An interesting parody: Kodak used to be the larger camera, negatives maker etc in the world for a very long time. It did not recognize the importance/resolution of digital cameras and ignore the fact that customers are turning to "digital" product. Even though there are still a handful of Kodak loyal customers and believers in its brand until today, it does not change the "digitization" trend of the society. Eventually, Kodak is no where to be seen these days.

I would ask myself one question, before I invest in Coca Cola. Has the company accepted the fact that "healthy trend is the future for beverage" and is ready to make all changes necessary to generate incomes from other categories of healthier beverages and reduce its reliance on selling Coca Cola?