Reference no: EM133041652

Is Global Competition Good?

What happens when 2 entrepreneurs start selling coconut water at the same time in the same place? Two great companies are competing internationally 10 years later.

Vita Coco, founded by Michael Kirban, and ZICO, founded by Mark Rampolla, discovered quite accidentally that both started selling coconut water in Manhattan in 2004. Both men were athletically active and found that coconut water was useful in rehydrating. But at the time, this was not friendly competition, and soon the tactics that each used garnered the name "coconut wars." Each started out simply: Kirban going around on in-line skates with samples in a backpack and Rampolla driving around in an old van with samples to stores. The reason both picked Manhattan is that it has a very large number of independent stores where the owners can quickly make decisions.

When each discovered that there was a competitor, both entrepreneurs were in shock. Kirban had discovered coconut water in Brazil and was anxious to bring it to the United States; Rampolla discovered coconut water in Costa Rica and also wanted to build a business selling it in the United States. With consumers not only being exposed to coconut water for the first time but also having choices of brands, competition soon became quite visible. Some salespeople learned phrases in Spanish, Arabic, Korean, and Hebrew to pitch to certain audiences.

This competition went on until 2009, when Coca-Cola bought 20% of ZICO. Vita Coco responded by selling 10% of its company to a group of celebrities that included Madonna and Demi Moore. Both investments created much media attention, and sales were expected to rise.

But like any deal, the outcomes depend on the details. Vita Coco was able to continue accessing distributors that it felt could make a difference. On the other hand, ZICO was restricted to how Coca-Cola handled distribution-which did not include sales staff that were focused only on ZICO.

Where are things today? Rampolla sold all the remaining shares to Coca-Cola in late 2014 but is still seen as the face of ZICO. Vita Coco continues as a strong independent brand, with sales in dozens of countries. Vita Coco also recently announced that it was getting rid of its celebrity ambassadors. Both are embarking on large marketing campaigns as the trend for increased sales continues. Kirban would like to have strong competition, which he believes is good for business, but without having the wars, as he did in the beginning.

Q1. What helped to make this a global success?

Q2. If you were asked to become a sales representative for either company in Asia, what might you need to know about the national culture?