The Case Study On Coca Cola

Presented by:
Shobhit Bhatnagar
Megha Bansal
Mayank Mathur
Sameer singh
Kshitiz Gupta
 WHAT IS COCA-COLA COMPANY?
Coca-Cola is a carbonated soft drink sold in the stores, restaurants, and vending
machines of more than 200 countries. It is produced by The Coca-Cola
Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered
trademark of The Coca-Cola Company in the United States since March 27, 1944).
Originally intended as a patent medicine when it was invented in the late 19th
century by John Pemberton, Coca-Cola was bought out by businessman As a Griggs
Candler, whose marketing tactics led Coke to its dominance of the world soft-drink
market throughout the 20th century.
The company produces concentrate, which is then sold to licensed Coca-Cola bottlers
throughout the world. The bottlers, who hold territorially exclusive contracts with
the company, produce finished product in cans and bottles from the concentrate in
combination with filtered water and sweeteners. The bottlers then sell, distribute
and merchandise Coca-Cola to retail stores and vending machines. Such bottlers
include Coca-Cola Enterprises, which is the largest single Coca-Cola bottler in North
America and western Europe. The Coca-Cola Company also sells concentrate for soda
fountains to major restaurants and food service distributors.
 COCA COLA-GONE FLAT
SUMMARY
• When former Coca-Cola executive E. Neville Isdell agreed last May to come out of
retirement and become chief executive of the beleaguered soda giant, he brimmed
with confidence. But just 100 days into his new job, Isdell was warning Wall Street
that the soda giant would fall short of even the meager 3% growth in earnings that
analysts were resigned to for the third and fourth quarters. Coke later announced
that third-quarter earnings had fallen 24%, the worst quarterly drop at Coke in
recent history.

As late as the 1990s, Coca-Cola Co. was one of the most respected companies in
America, a master of brand-building and management in the dawning global era.
Now the Coke machine is badly out of order. The spectacle of Coke's struggles has
become almost painful to watch: the battles with its own bottlers; the aged,
overbearing board; the failed CEOs and failed attempts to recruit a successor; the
dearth of new products; the lackluster marketing. 
• The Coca-Cola organization is stuck in a mind-set formed during its heyday in
the 1980s and '90s, when revered CEO Roberto C. Goizueta made Coke into a
growth story that captivated the world. An unwillingness to tamper with the
structures and beliefs formed during those glory years has left the company
unable to adapt to consumer demands for new kinds of beverages, from New
Age teas to gourmet coffees, that have eaten into the cola king's market share. 

Is the latest Coke CEO capable of leading Coke out of the valley? It's too early
in Isdell's tenure to say for sure, but the early signs are not promising.
Although he earned a reputation for bold decision-making as a young
executive, Isdell seems to have fallen into lockstep with the reigning Coke
orthodoxy. He says the company's salvation lies in simply tuning up the soda
operations and capitalizing on existing brands, just like his predecessors who
mistakenly focused on trying to do what Coke has always done, only better.
• Although long-timers can sometimes bring special skills to
rejuvenating a tired corporate culture, as in the cases of Procter &
Gamble and Heinz, there are also plenty of examples of companies
where a succession of CEOs was unable to break from the past and
continued to ride outdated models and product lineups nearly into
oblivion, such as Eastman Kodak. As two CEOs have already
discovered at Coke, it isn't easy following in the footsteps of a legend.
Until Coke can lay the ghost of Goizueta to rest and let go of some long-
cherished beliefs, it's unlikely to fix its problems.
ISSUES
 ISSUES
• TIED UP WITH GOIZUETTA’S MISSION
 Coke was stuck in the mindset of carbonated soft drink model.

• MEDDLING BOARD
 Coke star studded group of directors , many of whom dated
back to Goizuetta’s era , has built a reputation for meddling.

• LACK OF INNOVATION
 Coke hasn’t created a best selling new soda since Diet Coke in
1982.
FRICTION WITH BOTTLERS
Coke tried to make its profit at the expense of bottlers by
pushing price hikes of 7.6 % on its bottlers

LACKLUSTER MARKETING
Coke become too conservative with lackluster ads which
did not resonated with teenagers & young adults that is its
most important audience.
THE PEPSI GENERATION
 PEPSI GENERATION
Pepsi has become the second- largest generator of revenues, after Kraft
food Inc., for its largest grocer customer. Its portfolio of beverages and its
faster- growing snacks foods give Pepsi enormous clout with retailers.

Pepsi co CEO Steven S. Reinemund says “being outside carbonated makes

sure we’re growing in the areas where there is growth.”

Pepsi got a jump on coke in bottled water and later outmaneuvered Big
Red to acquir both SoBe and Gatorade. As a result, Coke’s Powerade has
just a 17% share of the fastest growing sports drink segment vs. 81% for
Pepsi co. Gatorade brand.
Coke may have to figure out how to get his beverages to market using food
brokers, since its dedicated bottlers have been loath to handle new products
that don’t approach the high volumes of soda. Where Gatorade is already
distributed through a well established system of brokers.

In late 90’s, Ivester began shifting resources away from ad. And into
blanketing the world with as many vending machines, refrigerated coolers
and delivery trucks as coke and its bottlers could muster.

Coke lackluster advertising didn’t help either in its growth.

Ivester and Steven J. Heyer pushed desion making out into the field. But the
movement gone wrong when coke local marketers, suddenly unshackled,
began producing racy ads, including an Italian spot featuring a couple
skinny-dipping.
Coke exec Charles B. says that Coke is producing good ads but has
been hurt by a propensity to careen from campaign to campaign.
He also says that “when we change campaigns and have 11
different looks to a brand at any one time, we ‘re swimming
upstream.”
ANALYSIS
 ANALYSIS
Proposals for dealing with the situation went to two
extremes:
1. Stick with the basics and simply do things better
2. Vigorously diversify, even to non-drink areas as
Pepsi had seemingly done successfully.
The two approaches could be categorized as a mission
of being a soda company versus an expanded mission
of being a beverage-and-snack company.
Coke’s board, hearkening back to the glory days of Goizueta,
was negative toward mergers and strongly favored doing a
better job with the basic core, such as with advertising,
distribution, and tapping international markets more
aggressively.
 Critics, however, saw Coke as too wedded to the status quo and
missing growth opportunities. Of course, there is a third option
between the two extremes.
This would look for suitable diversifications within the non-
cola drink market, and even fortuitous and compatible non-
drink additions, but without any mandate to go on a merger
binge.
Coke was continuously selling off its assets to show a
consistent income and growth but by end of 90’s Coke
simply ran of assets to resell, and its largest bottlers
began to sink fast under all the debt-financed
acquisitions they had made coke’s behest.
Result was that coke’s profit stalled with operating
income falling from $ 5 billion in 1997 to as low as $
3.69 billion in 2000.
A private fund manager Douglas C. Lane who holds
400,000 coke shares said that “A lot what coke was
doing was smoke and mirrors, stuff that wouldn’t pass
the accounting standards of today.”
SUGGESTIONS
 CONSIDER THE POWER OF THE MEDIA

Press and broadcast media are powerful influencers of

public opinion. The power of the media should not
only be recognized but also be a factor in making
decisions that may affect an organization’s public
image.
CONSUMER TASTE IS FICKLE
Taste tests are commonly used in marketing research,
but there always been questions about the skeptical of
their validity. We know that people tend to favor the
sweeter in taste tests.
 But does this mean that a sweeter flavor will always
win out in the marketplace ?
Its important to create some new product. Some thing
different.
 Coke can introduce non cola drinks & energy drinks to
have variety in their product line.
Coke should consider the growing Health Awareness
amongst Consumers.
 THE HUMAN FACTOR MAY BE MORE
IMPORTANT IN INTERNATIONAL DEALINGS
The distances involved usually necessitate more
decentralization and, therefore, more autonomy. If
confidence and trust in foreign associates are
misplaced, serious problems can result.
Customers and affiliates may need a closer
relationship with corporate management if they are
not to be wooed away.