Prepared by:MAHESH PANICKER R RADHIKA

VIBHUTI SAHAI
GAURAV RANA

RUCHIKA

 Coca-Cola

going flat. The company appointed a new CEO, E. Neville Isdell, and followed the announcement with a series of changes to its management team. was a fall in price of Coca colas shares to a 16-month low on the back of this announcement.

There

 The

battle with its own bottlers, the aged, overbearing board, failed CEOs and failed attempts to recruit a successor, dearth of new products, lackluster marketing were also some of the reasons. all these problems that can beset a corporation, a dysfunctional culture has been one of the toughest fix.

Of

 Coca-colas

relationship with Coke, one of its major bottling partners, was turbulent as well.

The

two companies had troubles in the past and were in the midst of negotiations to restructure their working relationship.
a result coca-colas profit stalled, with operating income falling from $5 billion to as low as $3.69 billion.

As

 While

Coca-Cola's stock price had fallen by 20%, the value of Pepsi's shares has increased by 22%. Mr. Isdell being appointed as a transitional CEO, it was not possible for him to bring special skills to rejuvenate a tired corporate culture as a long timer CEO can.

However,

 Question

on the capability of CEO to lead coke out of the valley. was a troubled company.

Coca-cola It

was stuck in a mind-set formed during 1980s and 1990s (Goizuetas reign) coke orthodoxy: a succession of managers have focused on trying to do what coke has always done, only better.

Reigning

 Roberto

C. Goizueta was a cuban-born executive. sold off ancillary businesses and refocused the company on what it did best; selling carbonated soft drinks. engaged in sophisticated reengineering of the company's financial structures.

He

He

 During

his reign the company entered once-closed economies such as china, East Germany and the soviet union.

As

a result coke stock soared 3500% during his 16 year reign and the average annual earning growth was 18% during 1990-97. stomach.
marketing mantra share of

Goizuetas

 Brainchild Coke

of then-CFO M.Douglas Ivester.

spun off its U.S. bottling operations into a new company known as Coca-cola Enterprises Inc. (CCE), retaining 49% stake for itself. was done to ensure that CCE was run to cokes benefit.

This

 Coke

has made little effort to meet the rising challenges of non-carbonated drinks. Battle with its own bottlers. The aged, overbearing board. The failed ceos and failed attempts to recruit a sucessor. The dearth of new products. Unwillingness to tamper with the structure and beliefs formed.

 The

third quarter earnings had fallen 24% the worst quarterly drop in cokes history. successor, douglas N.Daft, tried to work with bottlers, but relations have steadily deteriorated since .

Ivesters

Daft

tried to push coke to become a total beverage company, he met with resistance from cokes board.

 Cokes

cultural resistance to diversification has become an enormous liability. bottlers have refused to carry some of the companys niche offerings. may have to figure out how to get beverages to market using food brokers.

Many

Coke

 Isdell

is downplaying the notion of a big, audacious fix for cokes troubles. magic at coke had begun to fade even before goizuetas death .as concentrated on distribution.

Marketing

Notorious

board The directors, especially the powerful triumvirate of warren E BUFFET, herbert A Allen and donald keough

 Main

problem are : - battles with their own bottlers , the aged overbearing board , the failed ceos, failed attempt to recruit successors , death of new product and lackluster of marketing. spun off a 51% stake in the U.S bottling operation thanks to constant buying and selling of small bottling operations helped to generate profits.

Coke

 Coke

spun off its U.S bottling operation in late 1986 into new company known as Coca- Coal enterprises Inc. Retaining a 49% share for itself. Coke able to erased $2.4 billion of debt from its balance sheet. CCE was run of coke benefit.

CCE

allowed serious of advantage of coke pricing of bottles lower than Pepsi and cover its marketing cost.

 Coke

was not able to convince analysts to consider profits of their many deals. ( as part of normal operation not extra ordinary income ) imposed a 7.6 % price hike on its bottlers hikes reduce sales and bottlers refused to carry some of new non carbonated niche offering that coke acquired.

Coke

 Pepsi

Pepsi got a two year jump on coke in bottled water and later outmaneuvered big red to acquire both SoBe and Gatorade. PowerAde has just a 17% share of the fast growing sports drink segment in the U.S vs. 81% share for PepsiCo's Gatorade brand Coke plans to try again with a second energy drink.

Coke

 At

height of power , Coke come up with Coke sweeter drink which backfired. But coke able to seized loyalty to coca cola classic. turning all resources from advertising to many vending machines , refrigerated coolers and delivery trucks. ( there was no vision no marketing)

Ivester

 Heyer

showed signs of regaining its footing on the marketing front. Coke is producing good ads but has been hurt by a propensity to careen from campaign to campaign .

Coke

change many campaign and 11 different looks to a brand at any one time, we are swimming upstream.

 To

really break out coke make a transformative acquisition as Pepsi does by buys Frito lays Inc. in some European tour miss out chance to acquire Red Bull market leading energy drink Regardless of what skeptics may think, I Know that carbonated soft drinks can grow.

Isdell

 In

Asia, Africa and Eastern Europe push company into bottled water ( He got an awful lot of grief from headquarters). India Coke acquire Parle ( leading soda maker ) with the help of Jay Raja Deal give 60 % of Indian soda market almost overnight.

In

Directors in the board are over 70s but not look to retire . Company set new age limit to 74 years eased to allow buffet to remain and keough to rejoin.

 Coke

was only having one product soda pop .On the other hand Pepsi was not just about soda pop.

Coke

always followed a very conservative policy under the guidance of its CEO Goizueta while Pepsi followed a lot of aggressive policies in order to capture higher market share.

It took Pepsi just two weeks to make an offer. This shows Cokes cultural resistance to diversification became an enormous liability . South Beach Beverage Company negotiated with Coke for two years before the soda giant decided against acquiring the New Age Juice Company. The difference between the decision-making power of both the companies.

 Coke

followed a very old and monotonous way of working. On the other hand, Pepsi adopted new practices in its working style and achieved the position of secondlargest revenue generator after Kraft Foods Inc, for its largest grocer customers. To really break out, Coke could make a transformative acquisition, as Pepsi did in 1970s when it bought Frito-Lay Inc.

 They

Should protect their company so that the could ran the company for their own benefit.

They

Should maintained the good relation with the bottlers. should have accepted the deal of south beach beverage company for which they took 2 years.

They

 Daft

should not tried to make total beverage company. old age directors, Three directors of over 70 years of age, So they must tried to take some young board members. two CEOs in last two years. Stability should be there in the company.

Very

Chewed

 They

should have made the strong effort to meet the rising challenges of non carbonated drinks. should accepted according to the market. the changes

They

They

should not always talked for sudden changes rather than changes from the basic.