STRATEGIC MANAGEMENT - II

PROJECT REPORT

STRATEGIC IMPORTANCE OF CSR FOR COCA-COLA

Under the guidance of

Mr.

GROUP MEMBERS (Section B)

AYUSHI AGRAWAL 09P071
MEHUL BAKLIWAL 09P091
MOHIT GUPTA 09P092
PULKIT GARG 09P103
TARUN DUDEJA 09P118
STRATEGIC IMPORTANCE OF CSR FOR COCA-COLA

1. why csr …genral faff

2. y csr for coke
3. CSR activities of coke
4. Business implications of each
 ACKNOWLEDGEMENT

We would like to express our heartfelt gratitude towards Prof. Dr. Sumita Rai for her instruction
and guidance not just for this project but for the entire course of Human Behavior in
Organization.
GENERAL FAFF
References:
Strategic corporate social responsibility as global brand insurance by William B. Werther, Jr., and
David Chandle- june 2005

When the competitive strategies of multinationals rely on global brands, corporate social
responsibility (CSR) offers insurance against management lapses. The practical need for CSR as
brand insurance comes from changing social expectations, affluence, and globalization. Corporate
actions that violate societal expectations damage, even destroy, brand image among networked
stakeholders who are affluent enough to buy branded products and services. The premiums for
CSR brand insurance are paid by leaders who create an organization-wide commitment to CSR as
a means of redefining ‘profit maximization.’ By integrating a stakeholder perspective,
management is best placed to optimize stockholder returns over the longer term.

All hail the brand!

Global brands are often central to competitive strategy because they serve as profit platforms that
differentiate even commodity-like products and services. Brands work by ensuring customers of
quality, consistency, and security. Such guarantees create repeat customers and provide
producers with potentially higher margins. In turn, brand acceptance creates a virtuous cycle by
facilitating greater investments in research, product development, advertising, and distribution
that further strengthens the brand and increases sales. Ultimately, however, a brand's appeal
rests upon its value proposition, which engages customers in a subjective calculus among costs
and benefits of the brand compared with substitutes.

Brand managers lever these calculations by connecting brand attributes with the needs and
aspirations that arise from customer lifestyles. For example, think about NIKE's ‘Just do it!’ slogan
and how it seeks to connect with the active lifestyles of its customers around the world. As Licha
(2003) notes, the challenge in communicating a brand's promise is to find common ground
between the message the firm projects and the extent to which that message resonates with
customers. As a result, strategic brand managers should not be surprised when the values
advocated by the branding process become benchmarks against which the firm's actions are
evaluated by customers, activist groups, and nongovernmental organizations (NGOs). Behaviors
that tarnish the values and attributes of the brand can damage, even sever, the brand loyalty of
customers.

Damage to brand loyalty is particularly devastating in affluent societies because switching costs
and barriers are low. As a result, strategic brand managers must protect their often huge
investments in brand development. Not only do they need to guard against competitors'
innovations, they must also ensure their firm's actions do not damage the consensus image of
their brands. Putting aside competitive innovations, our concern addresses how company leaders,
strategists, and brand managers minimize the damage done by corporate actions (or inactions)
that repudiate the values and attributes upon which the brand is built.
 FROM CSR GROUP PPTS

Arguments for CSR by its proponents

 Moral Obligation
 “Do the right thing”
 “achieve commercial success in ways that honor ethical values and respect people,
communities, and the natural environment”
 No moral absolutes – different for different stakeholders

Sustainability
 Do not compromise the ability of the future generations to meet their own needs
 Triple bottom line
 Short term costs vs long term benefits – leads to postponement and greater implications
wrt costs and other social variables

License to operate
 Tacit or explicit permission from govt. and other important stakeholders
 Short term placating measures employed

Reputation
 The tangible and intangible effects of a reputable brand in the market
 A sort of insurance for bad times
OR

 None can survive without the other

• Successful corporations need a healthy society
 • A healthy society needs successful companies
• Their roles are mutually dependent

 Must follow the principle of ‘shared value’

 Non zero sum game

COKE GENERAL FAFF
 FROM SUMMERS PPT

So for the world, sustainability is about the actions we take – financial, environmental, and social
– to support the quality of life now and for future generations.
• For business, it’s no longer sufficient to be financially successful, because if we’re not taking
aggressive action in sustainability, our financial success is not sustainable.
• So how are we going to rise to the sustainability challenges our business is facing and turn them
into business opportunities?

• We have a sustainability strategy and that strategy is called “Live Positively.”

• “Live Positively” is our commitment to making a positive difference in the world, AND IN OUR
BUSINESS, by redesigning the way we work and live, so that sustainability is part of everything
we do. Forever.
• Winning companies actively turn challenges and risks into opportunities and advantage.

There has been a change in our view of sustainability, from an environmental focus, to an
integrated view of areas (both internal and external) that captures the full scope of factors that
can help reduce risks, drive revenue, or increase our reputation.
 Profit

Planet People
Sustainable
Growth

Partners Portfolio

Holistic View
ENVIRON MARKETP
MENT LACE
Water Active,
Stewardship Healthy
Living
Sustainable Beverage
Packaging Benefits

Climate & Product

Energy Protection Integrity

COMMUNIT
WORKPLAC
Y
E
PROGRAMS

In today’s interconnected world of empowered consumers, ordinary people are shaping the
change they want to see in the world
Our consumers are increasingly concerned about the same issues as our stakeholders, and are
beginning to consider our actions and attributes in areas such as environment and wellbeing as
factors in their decision making process.
In our recent SPAN segmentation study, we identified that 25% of the population across 15
countries in the study cared about issues of environment, fair trade, or organic ingredients.
External sources also support the growth of a consumer demand for products that address their
needs and/or concerns relative to sustainability.

Our recent MFG Refresh survey conducted amongst our people acknowledged that our
employees place a lot of value in working for a responsible company, one which makes a
difference in peoples lives.
(data from employee survey which demonstrated the level of pride reflected by employees from
existing activities by the Company

Many of our employees already engage in programs individually and collectively throughout our
system and are ready for the Company to take a bigger role, and give them a chance to get
involved.

Coke’s Business at a Glance

Now consider the size of our business

200+ countries, 300+ franchise partners,
900+ manufacturing plants and 1.5 billion servings per day!

When we look at our business, we have environmental impacts at each step of our operations
while going to the market. And when you consider about the size of our business, you can guess
the size of these impacts.

Coca-Cola is committed to sustainable and responsible growth, and we recognize the health of
our business is directly linked to the health of the environment. (For a sustainable business, we
need sustainable communities) That’s why we’re working to address challenging environmental
concerns by focusing effort where we have the most significant impacts and the most potential to
make positive contributions: water stewardship, sustainable packaging, energy management
and climate protection.
COKE’S SPECIFIC CSR ACTIVITIES AND
THEIR STRATEGIC BUSINESS IMPORTANCE
 WATER

Water is:
– The main ingredient in all of our beverages
– Essential to our manufacturing processes
– A life-sustaining resource for the communities and ecosystems that make our
business possible
– A key component of many of our ingredients, including sugar
In limited supply worldwide

PACKAGING

The Coca-Cola System alone produces 55 billion PET bottles a year. That’s enough bottles to circle
the earth 100 times.
• By 2020, we will have produced nearly a trillion PET bottles based on current growth. If 30% of
these bottles are recycled, it means that 600 billion bottles will still be left behind in the
communities we serve as waste. These wasted bottles represent a valuable resource. It’s…
• A loss of over 700mm cubic yards of space
• A loss of over 3 billion barrels of oil
• A loss of $12 billion in current raw material value
• A loss of $2 billion in potential cost of goods savings
• We spend $12 billion a year as a System on our core packaging. If we were to eliminate just one
gram of weight from all our PET bottles, we would save $100MM.
(CLICK SLIDE)
• Let’s increase our lightweighting, and our recovery and reuse of PET bottles to lessen the impact
packaging will have on our environment…
(CLICK SLIDE) and the long-term health of our business and our brand reputation.