key fundamental issues that should be discussed as a key concept of cocacola company
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is it healthy what are the ingredients are the fundamental issues most people have while drinking cola
Coca-Cola has the most valuable brand name in the world and, as one of the most visible companies worldwide, has a tremendous opportunity to excel in all dimensions of business performance” (Ferrell, Fraedrich, & Ferrell, 2008). However, as proven in this case study, Coke has a lot on their plate as the biggest brand name in the world. Ethical issues throughout different aspects of the company, and with multiple leadership changes in the last ten years, Coke has some catching up to do. The company has been involved in racial discrimination, misrepresenting market tests, manipulating earning and disrupting long-term contractual arrangements with distributors. Neville Isdell, the new president of Coke is currently working to improve their reputation cause by some of the problems presented next.
The Coca-Cola Company Struggles with Ethical Crises
Coca-Cola History:-
Coca-Cola is the world’s largest beverage company that operates the largest distribution system in the world. This allows Coca-Cola companies to serve more than 1 billion of its products to customers each day. The marketing strategy for Coca-Cola promotes products from four out of the five top selling soft drinks to earn sales such as Coke, Diet Coke, Fanta and Sprite. This process builds strong customer relationships, which gives the opportunity for these businesses to be identified and satisfied. With that being said, customers will be more willing to help Coca-Cola produce and grow.
The Coca-Cola Company Struggles with Ethical Crises
Coca-Cola History:-
Coca-Cola is the world’s largest beverage company that operates the largest distribution system in the world. This allows Coca-Cola companies to serve more than 1 billion of its products to customers each day. The marketing strategy for Coca-Cola promotes products from four out of the five top selling soft drinks to earn sales such as Coke, Diet Coke, Fanta and Sprite. This process builds strong customer relationships, which gives the opportunity for these businesses to be identified and satisfied.
“Pepsi and Coca-Cola, between them, hold the dominant share of the world market” (soft drink market 2008). Even though Coca-Cola produces and sells big across the United States, in order for the company to expand and grow, they had to build their global soft drink market by selling to customers internationally. For example, both companies continued to target international markets focusing on traditional soft drinks, new-age drinks and expanding into the snack-food businesses. With these new changes, Pepsi has 60% of the U.S. Snack-food market while Coca-Cola contributes 85% of its sales outside of the United States. According to the late Roberto Goizueta, “Coca-Cola used to be an American company with a large international business. Now we are a large international company with a sizable American business” (Ferrell, 2008).
Crisis Situations:-
Coca-Cola has not always been a squeaky-clean company that never had problems. The stock price of the company is the same price as it was 10 years ago, and this is due to the ethical and legal issues that were associated with the company. A small problem occurred in Belgium in 1999 when a few children fell ill after drinking a product with the Coca-Cola brand on it. They had a recall on the product there in Belgium, but soon after, every item Coca-Cola made was pulled off the shelves in every store. This caused a loss of reputation, which, in turn, made people lose respect for the company and investors started selling their stocks in Coca-Cola. Neighboring countries, such as Luxembourg and the Netherlands, soon followed suit and recalled all products throughout both countries.
During this crisis, Coca-Cola started to run into different problems with their marketing in European countries with anti-trust laws. They wanted to create a merger with themselves and Orangina, a French company, but their overaggressive style turned off the other companies in the deal, which became a problem. Their strong-arm tactics proved to be too much for the foreign countries, and creating a competitive advantage seemed to cross the line of the anti-trust laws in which they were sued for the by the country of Italy. Italy won the court-case, which caused investigations of the company’s competitive practices, which is never a good thing for business.