Coca ColaEssay Preview: Coca ColaReport this essayCOCA COLA — A case analysisIn the 1980s, under CEO Roberto Goizueta, Coca-Cola was a global brand with a growing presence in global-emerging markets like Europe, Russia, and South East Asia. It beat back its main rival Pepsi to be a leader in the carbonated beverage market with a 70% market share. During the 1990s however, under new CEO M. Douglas Ivester, the company’s market share started declining due to political (regulatory), economic, social (consumer), and technological (operations) challenges in the marketplace.
While Coca-Cola was trying to consolidate its position in it’s core cola market, there was an increasing shift in consumer tastes in favor of non-carbonated beverages such as juice, tea, and bottled water. Local brands in local markets moved in to fill the gap in Coca-Cola’s product lineup, and to cater to the growing local tastes and nationalistic preferences of consumers.
Coca-Cola’s global bottling & distribution system, consisting of ten anchor bottlers, was one of its greatest strengths. These independent bottlers like CCE, in which Coca-Cola held a significant minority stake, enjoyed a good run till the currency crises in Russia, Asia and Latin America in 1998 put a strain on the bottlers’ profit margins and on Coca-Cola’s profits in turn.
European regulatory authorities scuttled Coca-Cola’s growth and acquisition plans by invoking anti-monopolistic regulations against the company. The nationalistic and protectionist governments took a political stance against Coca-Cola, which was perceived to be a symbol of domineering, American businesses. Health and hygiene issues related to Coca-Cola’s products in Belgium & France further dented the company’s prospects in Europe. Domestic (US) and global rivals like RC Cola and 7Up bottlers, and Pepsi, became legally combative in protecting their territories and fair-market rights. Coca-Cola also faced a great deal of negative publicity from a race discrimination suit filed by African-American employees.
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The Commission on Licensing & Control (LCC) of the European Union (EC) on February 25, 2017, submitted a resolution in a joint draft to the European Parliament that the Coca-Cola Group and CokeDirect are required to comply with both the law and the European Consumer Law for the development, protection and application of artificial sweetener (ESL) formulations, to the extent permitted under Articles 10 of Directive 2006/47/EC of the European Parliament and of the Council on the Regulation of European Union (EC). The Commission expressed grave concern about Coca-Cola and its activities in the promotion of health care, including its use of artificial flavors to mask the presence of chemicals or nutrients as contained therein in the beverages.
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The Commission on Licensing & Control (LCC) of the European Union (EC) on February 25, 2017, submitted a resolution in a joint draft to the European Parliament that the Coca-Cola Group and CokeDirect are required to comply with both the law and the European Consumer Law for the development, protection and application of artificial sweetener (ESL) formulations, to the extent permitted under Articles 10 of Directive 2006/47/EC of the European Parliament and of the Council on the Regulation of European Union (EC). The Commission expressed grave concern about Coca-Cola and its activities in the promotion of health care, including its use of artificial flavors to mask the presence of chemicals or
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The Commission on Licensing & Control (LCC) of the European Union (EC) on February 25, 2017, submitted a resolution in a joint draft to the European Parliament that the Coca-Cola Group and CokeDirect are required to comply with both the law and the European Consumer Law for the development, protection and application of artificial sweetener (ESL) formulations, to the extent permitted under Articles 10 of Directive 2006/47/EC of the European Parliament and of the Council on the Regulation of European Union (EC). The Commission expressed grave concern about Coca-Cola and its activities in the promotion of health care, including its use of artificial flavors to mask the presence of chemicals or nutrients as contained therein in the beverages.
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The Commission on Licensing & Control (LCC) of the European Union (EC) on February 25, 2017, submitted a resolution in a joint draft to the European Parliament that the Coca-Cola Group and CokeDirect are required to comply with both the law and the European Consumer Law for the development, protection and application of artificial sweetener (ESL) formulations, to the extent permitted under Articles 10 of Directive 2006/47/EC of the European Parliament and of the Council on the Regulation of European Union (EC). The Commission expressed grave concern about Coca-Cola and its activities in the promotion of health care, including its use of artificial flavors to mask the presence of chemicals or
Coca-Cola’s response: In pursuing a goal of retaining global preeminence and a 15-20% earnings growth, Coca-Cola took on too much, simultaneously, in expanding its markets. Ivestor employed stopgap measures to correct Coca-Cola’s image. He personally apologized for the missteps in Europe & lobbied with the French & Belgian governments. He attempted to streamline the organizational structure by realigning his direct reports on a regional basis. However, these changes were not enough, and it was only under Daft that Coca-Cola effectively tackled environment and performance related issues in meeting its goals.
Internal effectiveness: Daft decentralized operational & marketing functions to give local managers more authority over product portfolio development.Emotional health measure: Daft was an amiable personality, and in an effort to settle Coca-Cola’s racial discrimination suit he rehired Carl Ware to head the company’s Africa unit.
Systems resource effectiveness: Daft formed strategic alliances with other companies like the Creative Artists Agency, Ifuse.com to gauge customer & market preferences.
Stakeholders’ satisfaction: Daft attempted to repair relations with European regulators by being more culturally sensitive.Coca-Cola’s strategy, under Ivestor, can be broadly analyzed using Hambrick & Fredrickson’s model, and not surprisingly, we find that not all elements of the strategic model were given equal consideration.
Arenas: Coca-Cola invested heavily in emerging markets to retain its growth rate of 15-20%. Its central focus was its cola business.Vehicles: Coca-Cola’s global bottling & distribution system, consisting of ten anchor bottlers, was one of its primary profit drivers. Coca-Cola attempted to grow in new markets through acquisition and tried strong-arm tactics in existing markets to deny its competitors.
Differentiators: Coca-Cola’s ubiquitous brand image & marketing clout helped it to beat back its main rival, Pepsi.Staging: Coca-Cola took on too much, simultaneously, in expanding to new markets, while ignoring its internal affairs, and signals from its market environment.
Economic logic: Coca-Cola relied entirely on economies of scale and it’s presence in global markets to drive profits.Coca-Cola followed a highly centralized organizational structure. Decisions on entry into new markets and on new product development were centralized, primarily taking place in Atlanta. Ivestor himself was personally involved in all decision making. All strategic marketing and advertising campaigns were planned in the Atlanta headquarters. It’s network of bottlers handled soft drink production distribution. Through this structure, Coca-Cola was able to reap the benefits associated with the efficiencies of scale economies. However, this structure did not allow Coca-Cola to assess & respond quickly to evolving local markets and preferences.
Coca-Cola spent many days on its own, on a different plan.
A great deal of research was involved regarding what is required of Coca-Cola operations, the bottling process, logistics of the operations, and how Coca-Cola could better prepare and support these new markets. In addition to a thorough investigation into Coca-Cola’s operations, this research also revealed many important insights that might shed some light on the long-term prospects for the company. In this study, I will examine Coca-Cola’s marketing philosophy, tactics, development, and management strategy to explain why Coca-Cola does business where the business is, what was the potential and the short-term impacts. I will also make some recommendations for a strategy to provide Coca-Cola with the best tools and resources to develop its business-building mission, and how it can apply these to our global strategy.
On the one hand, I am able to make one point that I have been saying for some time, and then turn it into a topic of discussion in a blog post, but I want to go deeper into a specific point about Coca-Cola’s marketing philosophy and development. This is not something I am going to be able to do here but it is something I am aware Coke and the other bottlers must engage in in order to fully understand what’s going on. There are multiple options to choose from here, including, but not limited to, purchasing Coca-Cola branded soda packages (see below), the Coca-Cola beverage and drinks menu, and additional Coke or Pepsi brand bottles that can be purchased through various vending machines. This analysis is necessary to make understanding this point clearer for each of us.
The key point I want to make with this analysis is that Coca-Cola is trying to create a great business through all phases of its development. This means making the business a business that is competitive when it comes to the long-term growth prospects, not at the expense of the company. This analysis is highly technical, but it can come off as rather interesting given the technical constraints of the research. Because of this, I would like to bring up this last point and consider a few common assumptions, which I believe will be used to set a model framework for an organization within the company, and to evaluate how fast that model starts to change.
One thing I could also make of are assumptions about the number of bottlers required on the bottling plant. The large majority of the bottler requirements have already been established already on the production lines, while Coke’s production needs will go straight from the retail to the bottling plant. In other words, the largest bottling plant in the world will supply every aspect of Coca-Cola product. There will be a number of reasons that this requires some flexibility but a lot of these problems can be addressed simply by the construction and manufacturing of the plant.
I am not aware of specific bottling plants near the bottling plant (it’s location in Rio de Janeiro) where there is
Coca-Cola enjoyed an initial pre-eminence in the global marketplace. Towards the late 1990’s, consumer tastes had started to shift away from the carbonated beverages that had been the backbone of its business. Drinks such as Gatorade and Powerade and bottled water were gaining market share. Local brands in the foreign markets were capitalizing on the public relations problems that Coca-Cola was facing. The company was losing money quickly. Changes were needed to keep the company solvent.
Under CEO Ivester, the company was very centralized, with all decisions coming from the headquarters in Atlanta. Opportunities that were apparent to the local markets could not be acted upon without approval from a very slow moving corporate entity. Alternative categories of beverages were not embraced. The globalization strategy failed to reap the full benefits of the local market.
When Douglas Daft took over as CEO, the strategy of the company changed from a strict globalization strategy to a multi-domestic strategy. The focus went from “Always Coca-Cola” to “think local, act local.” Individual regional business units were given more authority to make decisions, market their products, and drive their local businesses. There was a clear