Last month Coca-Cola Co. (NYSE: KO) reported better than expected earnings. At the time the company stated it was very pleased with its performance in 2006 with the exception of one area, North America. During their conference call the company admitted they were in for some tough times during 2007, and that they were working on ways to turn things around. Well, it looks like their first major move in that direction comes in the form of a massive re-organization.
The company announced today that they are going to be breaking up their North American business to create three new beverage divisions. The resulting three business' are going to be sparkling beverages, still beverages and emerging brands.
Coke is hoping that by breaking up into these three different divisions it will be able to put up a better fight against their number one competitor, PepsiCo (NYSE: PEP). Once the split is made, all three of the resulting divisions are going to be responsible for their own product developments. By narrowing each divisions focus this should be a positive step for Coke and one that will allow for better growth in all areas of the business.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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