Case Study

The Cola Conundrum

Submitted By : Dhananjay Kumar Chandra Shekhar Nikhil Tandan Ankit Garg Nitin Bhatt

Company Profile

On May 8, 1886, a pharmacist named Dr. John Pemberton carried a jug of Coca-Cola syrup to Jacobs Pharmacy in downtown Atlanta, where it was mixed with carbonated water and sold for five cents a glass. From humble beginnings 125 years ago, our Company has evolved from one product -- CocaCola -- to more than 500 brands in 2011. Weve grown from selling a modest 9 drinks a day in 1886 to 1.8 billion a day. And weve expanded from one city in one country to availability in more than 200 countries around the world.

Hitory Of Company

In May 1886 Jacobs Pharmacy in Atlanta sold the first serving of Coca-Cola. Invented by John Pemberton (a Civil War veteran and pharmacist), the soft drink contained syrup, sugar, and carbonation, along with the caffeine-rich kola nut and the drug cocaine. The name Coca-Cola was invented by Pembertons bookkeeper, Frank Robinson, who also wrote the distinct script that has been sprawled on all Coca-Cola products to date. The beverage was not an instant success. In its first year at Jacobs Pharmacy, approximately nine servings were sold each day. Pemberton ended up with a $20 loss overall. But success, though not immediate, was right around the corner. By the late 1890s Coca-Cola had become one of Americas most popular fountain drinks. And soon thereafter it was being sold all across the United States and Canada. Advertising played a key role in Coca-Colas early success, and for some time to come advertising would continue to contribute to its success. Its 1930s Santa advertising helped to create the modern image of Saint Nick, as well as an increased personal connection between consumers and Coke.

In 1971 (while war persisted in Vietnam) a similar result was found with a television commercial showing young people gathered on a hilltop in Italy, singing, Id like to buy the world a Coke. More than two decades later the Always Coca-Cola campaign, which introduced the very popular Cokedrinking polar bears, also ended with positive results. But advertising success would not come so easily in the future. Always Coca-Cola continued through 2000, when it was replaced by Coca-Cola. Enjoy. Neither campaign met with success. In 2001 Coca-Cola launched Life Tastes Good, but the campaign was pulled in the wake of the terrorist attacks of September 11, 2001. Largely because of consumers increasing preference for healthier beverages, sales of Coca-Cola were steadily declining. But perhaps consumers simply missed the polar bears and the entertaining campaign that featured them. With the thought that consumers might be won over by another successful advertising campaign, Coca-Cola threw millions into its 2003 Real advertising campaign.

Company Profile In India

The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 1.3 million retailers. Today, our brands are the leading brands in most beverage segments. The Coca-Cola Companys brands in India include Coca-Cola, Fanta Orange, Fanta Apple, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Maaza Milky Delite, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and Nestea Iced tea, the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients).

In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen authorized bottling partners of The Coca-Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages.These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India.

Ethical Value Claimed By Company

Code of Business Conduct

1.
2. 3. 4. 5. 6. 7.

Acting with Integrity Around the Globe Act with integrity. Be honest. Follow the law. Comply with the Code. Be accountable.

Supplier Guiding Principle

Built On The Compliance Of Perfection

Relationhips Built On Good Corporate Citizenship

Shared Values, the foundation of Rship

Workplace Practices

Communication

Coca-Colas Unethical Practices

1. 2. 3. 4.

Lack Of Transparency and Accountability Lack Of Ethics In Marketing Unhealthy Practices Unhealthy Nature Of Cola

Practices Inimical To Stake Holder

Challenged at Shareholders Meeting Misleading Public On Water Issues University of Michigan Act Against Coca-Cola

Issues Of The Company In India

Excessive Water Usage

In a number of districts of India, Coca Cola and its subsidiaries are accused of creating severe water shortages for the community by extracting large quantities of water for their factories, affecting both the quantity and quality of water. Coca Cola has the largest soft drink bottling facilities in India. Water is the primary component of the products manufactured by the company. There have been numerous public protests of The Coca-Cola Companys operations throughout India, involving thousands of Indian citizens and several non-governmental organizations. Protests against the Coco Cola factories have taken place in a number of districts including: Mehdiganj near the holy city of

Varanasi; Kala Dera, near Jaipur, Rajastan; Thane district in Maharashtra; Plachimand district in Kerala; and Sivaganga in Tamil Nadu.

Pesticides Controversies

2003

2006

In 2003

In 2003, the Centre for Science and Environment (CSE), a nongovernmental organisation in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and Coca-Cola, contained toxins including lindane,DDT, malathion and chlorpyrifos pesticides that can contribute to cancer and a breakdown of the immune system. Tested products included Coke, Pepsi, and several other soft drinks (7Up, Mirinda, Fanta, Thums Up, Limca, Sprite), many produced by The Coca-Cola Company. CSE found that the Indian produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca-Cola's 30 times. CSE said it had tested the same products in the US and found no such residues. Coca-Cola and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. David Cox, Coke's Hong Kong-based communications director for Asia, accused Sunita Narain, CSE's director, of "brandjacking" using Coke's brand name to draw attention to her campaign against pesticides. Narain defended CSE's actions by describing them as a natural follow-up to a previous study it did on bottled water.

In 2006