Why doesn't McDonalds sell Powerade anymore

What is the Coca-Cola and McDonald’s moat?

In the lecture I gave in the SamaGame Markets experience on Courage I mentioned a few points on the last slide that we should review in our article Permanent competitive advantage analysis to avoid these value traps.

One of those points is Avoid companies that are dependent on a single product.

Recently I was asked a very good question: do I understand that if I didn't have to rely on a single product to strictly adhere to the moat, I would have always excluded Coca-Cola, McDonalds?

I want to answer the question for two main reasons:

I) Perhaps, due to lack of time or lack of time, I did not explain some things well in the lecture;

ii) the importance of performing a moat analysis well and not falling into simplifications.


1. Classify something as Courage trap They have to meet various qualitative and quantitative requirements. It could have red flags in the quantitative part, but not in the qualitative part or vice versa, and then it would not yet qualify as a value trap.

2. Something I always mention in the courses is that moat analysis is not Wish list, is a Checklist. No company can have all of the attributes that make up the lasting competitive advantage analysis because it is not a wish list. For example, a company may depend on a single product, but it's the only one in the world that offers or has become De facto standard as mentioned in the Value Investing course. You can only sell one product and it has this disadvantage, but there are many more variables to consider in Moat analysis. An individual neither determines the amplitude or nullity of the moat, nor does its absence classify it as Courage trap.

3. Moat's analysis must go beyond that porter Y. Dorsey You taught us not to get caught up in the common mistakes that various Morningstar analysts have. For example, KO and MCD not only sell products, but also experience, familiarity, and other emotions that exploit our cognitive biases.

4. You must always understand and know the business well. This is point number one that I mentioned in the video. DCM Not only does she sell hamburgers, she also earns franchise license fees. Since she owns much of the properties that she rents to her franchisees, she makes money from there too.

5. I don't think I would have been smart enough to buy Coca-Cola in 1919 when it went public, had I been alive then. But maybe he would have bought it in the late 80s or early 90s as he diversified his businesses. Maybe they didn't touch it, but Powerade de Coca was the official drink at the 1992 Barcelona Olympics. And it was during those years that he introduced other drinks that helped him improve his benefits and grow organically.

On Monday we start with the Permanent course to analyze competitive advantages.