Better Buy: Starbucks vs. Coca-Cola
On a hot summer day, would you choose an ice-cold can of Coca-Cola (NYSE: KO) or a Starbucks (NASDAQ: SBUX) blended Frappuccino? Decisions like this one have implications for the companies that produce those drinks, and each is adding a more substantial number of items to its product lines to snag greater market share.
Coke is the eternal classic, while Starbucks is the drink of a new generation. Which one is the better stock buy?
The two companies have very different operating models, the first noticeable difference being that Starbucks mostly operates through owned retail stores while Coke is a manufacturer that wholesales its products to stores and restaurants. Starbucks, however, has gotten into wholesale through marketing bottled drinks and roasted coffee beans to supermarkets, and Coke is growing its coffee business with new acquisitions and hot-drink vending machines. This is where they compete.
Source Fool.com
