The following story was broadcast on WFAA on Feb. 7, 2012. Management Professor David Lei provided expertise for this story.
February 17, 2012
By David Schechter
DALLAS — At the Maple and Motor restaurant, you can wash down a giant hamburger with any drink you want... as long as it's not Dr Pepper.
"What is this thing here? This is my new beverage machine," said owner Jack Perkins, pointing to a new cooler filled with a suite of sodas offered by Dublin Bottle Works. All are sweetened with cane sugar.
But customers haven't likely heard of most of the new sodas on offer. "No, probably not," Perkins agreed. "But I guarantee when they taste it, they'll be absolutely amazed."
Maple and Motor is one of Jeff Kloster's new customers. "We believe that there's a great opportunity for us," he said.
Dr Pepper Snapple Group sued Kloster for selling his cane sugar Dublin Dr Pepper far outside his six-county franchise area. To end the dispute, after 121-years of bottling, Kloster sold the rights to his family's franchise back to the company.
Fans of Dublin Dr Pepper backed Kloster, and were livid with the big company, complaining the little guy got squashed.
"It makes you feel great about what you've done," Kloster said.
Judd Bradbury is business professor at the University of Texas at Dallas. Does he think the Dublin company made a tactical mistake?...
But David Lei, a professor at SMU's Cox School of Business, said Dublin Bottle Works has gone overnight from a mature business back to a start-up venture.
"It's certainly a blunder," he said. "It's very hard to see how it can play out in their favor, over the long-term, given the economics of the industry."...