The last of the color slides was barely off the screen when Bob Burns , the CEO of Global Foods. Inc. , turned to his board of directors to raise the question that he has been waiting all week to ask. “ Well, ladies and gentlemen, are you with me in this new venture? Is it a ‘go’ ? Shall we get into the soft drink business? ”
“ It’s not that easy. Bob. We need some time to think it over. You’re asking us to endorse a vary major decision, one that will have a long team impact on the direction of the company.”
“ I appreciate your wish to deliberate further, Dr. Breakstone.” Bob responded. “ but I would like to reach a decision today. As the president of a major university, you have been especially valuable in advising this company in matters relating to social and governmental policies. But we must diversify our business very soon in order to maintain the steady growth in profits that we have achieved in recent years. As my presentation showed, the manufacturing and marketing of our own brand of soft drink is one of the best ways to do this. It represent a significant diversification, yet it is very closely related to our core business : food.
“ The economics of the soft drink market tell us that we would be foolish to pass up the kind of investment return that the market offers to those newcomers willing to take the risk. The food business is generally a mature one. On the other hand, our forecast indicates that there is still a lot of room for growth in the soft drink market. To be sure, there is a tremendous amount of competition from the ‘ red team’ and the ‘ blue team.’ But we already have expertise in the food business, and it should carry over into the beverage market.”