> Coca Cola, for instance, doesn't have any real benefit over other drinks, but they have a fearsome salesforce, marketing and distribution. Not as simple as

> Coca Cola, for instance, doesn't have any real benefit over other drinks, but they have a fearsome salesforce, marketing and distribution. Not as simple as that. Firstly, it is extremely difficult to enter the drinks market (setting up a countrywide distribution network, etc...). What Coke also does (in some countries) is giving the owner of Cafes, garages and small shops a fridge (loan on permanent basis). The condition of the fridge is simple - the owner can only stock it with Coke-a-Cola products. So right there the retailer is locked in - to distribute a smaller competitor's drinks, he would have to buy a whole fridge (or the competitor must provide a fridge). This is not likely - hence the lock-in. The customer is not locked in, the distributor is. Another thing that Coke does is prevent competition between small retailers. You must sell Coke’s products at their recommended price (otherwise you have to pay more). They also sell the products to larger retailers at a lower price (and they in turn may not sell it at the reduced price to smaller retailers). If Coke wants to launch a new product, they basically force small retailers to carry their product (whether they want to buy it or not). So, yeah, Coke is a pretty nasty company. Luckily for the guys in the USA, there is actual competition (Pepsi).