I was reading through the news the other day, and I came across an interesting article (found here at http://www.bbc.co.uk/news/business-11899792) that I thought related to our current project studying Bell’s decision to be the telecommunications sponsor of the Vancouver 2010 Winter Olympics.
As stated in the article, Pepsi is paying 3.8 billion dollars for a 66% percent stake in Russian dairy and fruit juice giant Wimm-Bill-Dann. Pepsi plans on buying the remaining shares sometime in the near future.
I thought that this was a lot like Bell’s sponsorship of the Olympics because both companies are taking risks by expanding their target markets. In Bell’s case, they were an almost exclusively Eastern Canadian phone company, and they decided that it was necessary for them to spend $200 million on a large sponsorship deal in Western Canada. This is a risky effort at expanding their market to the west, as Telus currently dominates the west.
Pepsi’s acquisition of Wimm-Bill-Dann is similar to this because even though Pepsi has no experience with milk products, they are taking a risk in an effort to expand their current market.
I think that both are great ideas, as expanding your target market is one of the best ways to gain new customers.