coca cola case study - The Coca Cola Company struggles with...

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The Coca – Cola Company struggles with Ethical Crises Coca-cola has the most valuable brand name in the world and, one of the most visible companies worldwide, has a tremendous opportunity to excel in all dimensions of business performance. However, over the last ten years, the firm has struggled to reach its financial objectives and has been associated with a number of ethical crises. Warren Buffet served as a member of the board of directors and was a strong supporter and investor of Coca-Cola but resigned from the board in 2006 after several years of frustration with Coca-Cola’s failure to overcome many challenges. Many issues were facing Doug Ivester when he took over the reins at Coca-Cola in 1997. Ivester was heralded for his ability to handle the financial flows and details of the soft drink giant. Former CEO Robert Goizueta had carefully groomed Ivester for the top position that he assumed in October 1997 after Goizueta’s untimely death. However, Ivester seemed to lack leadership in handling a series of ethical crises, causing some to doubt the “Big Red’s” reputation and its prospects for the future. For a company with a rich history of marketing prowess and financial performance, Ivester’s departure in 1999 represented a high-profile glitch on a relatively clean record in one hundred years of business. In 2000 Doug Daft, the company’s former president and chief operating officer, replaced Ivester as the new CEO. Daft’s tenure was rocky, and the company was allegedly involved in racial disrupting long-term contractual arrangements with distributors. By 2004 Daft was out and Neville Isdell had become president and worked to improve Coca-Cola’s reputation. History of Coca-Cola Company The Coca-Cola Company is the world’s largest beverage company, and markets four of the world’s top five leading soft drinks: Coke, Diet Coke, Fanta, and Sprite. It also sells other brands including powerade, minute maid, and dansani bottled water. The company operates the largest distribution system in the
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world, which enables it to serve customers and business in more than two hundred countries. Coca-Cola estimates that more than 1 billion servings of its products are consumed every day . For much of its early history, Coca-Cola focused on cultivating markets within the United States. Coca-Cola and its archrival, PepsiCo, have long fought the “cola wars” in the United States, but Coca-Cola recognizing additional market potential, pursued international opportunities in an effort to dominate the global soft-drink industry. By 1993 Coca-Cola controlled 45 percent of the global soft – drink market, while PepsiCo received just 15 percent of its profits from international sales. By the late 1990’s Coca-Cola had gained 50 percent of the global market in the soft drink industry. Pepsi continued to target select international markets to gain a greater foothold in international markets. Since 1996 Coca-Cola has focused on traditional soft drinks, and PepsiCo has gained a strong foothold on new-age drinks, has signed a partnership with Starbucks, and has expanded rapidly into the snack- food business.
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