Case Study

Case StudyCase StudyThe Cola ConundrumThe Cola Conundrum

Submitted By : Submitted By : Dhananjay KumarDhananjay Kumar

Chandra ShekharChandra ShekharNikhil TandanNikhil TandanAnkit Garg Ankit Garg

Nitin BhattNitin Bhatt

Company Profile Company Profile On May 8, 1886, a pharmacist On May 8, 1886, a pharmacist

named Dr. John Pemberton named Dr. John Pemberton carried a jug of Coca-carried a jug of Coca-Cola® syrup to Jacobs’ Cola® syrup to Jacobs’ Pharmacy in downtown Pharmacy in downtown Atlanta, where it was mixed Atlanta, where it was mixed with carbonated water and with carbonated water and sold for five cents a glass.sold for five cents a glass.

From humble beginnings 125 From humble beginnings 125 years ago, our Company has years ago, our Company has evolved from one product -- evolved from one product -- Coca-Cola -- to more than 500 Coca-Cola -- to more than 500 brands in 2011. We’ve grown brands in 2011. We’ve grown from selling a modest 9 drinks from selling a modest 9 drinks a day in 1886 to 1.8 billion a a day in 1886 to 1.8 billion a day. And we’ve expanded day. And we’ve expanded from one city in one country from one city in one country to availability in more than to availability in more than 200 countries around the 200 countries around the world.world.

Hitory Of CompanyHitory Of Company In May 1886 Jacobs’ Pharmacy in Atlanta sold the first In May 1886 Jacobs’ Pharmacy in Atlanta sold the first

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

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

Company Profile In IndiaCompany Profile In India The Coca-Cola Company re-entered India through its wholly owned The Coca-Cola Company re-entered India through its wholly owned

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

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

Ethical Value Claimed By CompanyEthical Value Claimed By Company

Code of Business ConductCode of Business Conduct1.1. Acting with Integrity Acting with Integrity

2.2. Around the GlobeAround the Globe

3.3. Act with integrity. Act with integrity.

4.4. Be honest. Be honest.

5.5. Follow the law. Follow the law.

6.6. Comply with the Code. Comply with the Code.

7.7. Be accountable.Be accountable.

Supplier Guiding Principle

Built On The Compliance Of Perfection

Relationhips Built On Good Corporate Citizenship

Shared Values, the foundation of R’ship

Workplace Practices

Communication

Coca-Cola’s Unethical PracticesCoca-Cola’s Unethical Practices

1.1. Lack Of Transparency and AccountabilityLack Of Transparency and Accountability

2.2. Lack Of Ethics In Marketing Lack Of Ethics In Marketing

3.3. Unhealthy PracticesUnhealthy Practices

4.4. Unhealthy Nature Of ColaUnhealthy Nature Of Cola

Practices Inimical To Stake HolderPractices Inimical To Stake Holder Challenged at Shareholders MeetingChallenged at Shareholders Meeting Misleading Public On Water IssuesMisleading Public On Water Issues University of Michigan Act Against Coca-ColaUniversity of Michigan Act Against Coca-Cola

Issues Of The Company In IndiaIssues Of The Company In India

Excessive Water UsageExcessive Water Usage In a number of districts of India, Coca Cola and its In a number of districts of India, Coca Cola and its

subsidiaries are accused of creating severe water shortages subsidiaries are accused of creating severe water shortages for the community by extracting large quantities of water for the community by extracting large quantities of water for their factories, affecting both the quantity and quality of for their factories, affecting both the quantity and quality of water. Coca Cola has the largest soft drink bottling facilities water. Coca Cola has the largest soft drink bottling facilities in India. Water is the primary component of the products in India. Water is the primary component of the products manufactured by the company.manufactured by the company.

There have been numerous public protests of The Coca-There have been numerous public protests of The Coca-Cola Company’s operations throughout India, involving Cola Company’s operations throughout India, involving thousands of Indian citizens and several non-governmental thousands of Indian citizens and several non-governmental organizations. Protests against the Coco Cola factories have organizations. Protests against the Coco Cola factories have taken place in a number of districts including: taken place in a number of districts including: Mehdiganj Mehdiganj near the holy city of Varanasi; Kala Dera, near Jaipur, near the holy city of Varanasi; Kala Dera, near Jaipur, Rajastan; Thane district in Maharashtra; Plachimand district Rajastan; Thane district in Maharashtra; Plachimand district in Kerala; and Sivaganga in Tamil Nadu.in Kerala; and Sivaganga in Tamil Nadu.

Pesticides ControversiesPesticides Controversies

20032003 20062006

In 2003In 2003 In 2003, the In 2003, the Centre for Science and Environment (CSE), a  (CSE), a 

non-governmental organisation in  in New Delhi, said aerated waters , said aerated waters produced by soft drinks manufacturers in India, including produced by soft drinks manufacturers in India, including multinational giants PepsiCo and Coca-Cola, contained toxins multinational giants PepsiCo and Coca-Cola, contained toxins including including lindane,,DDT, , malathion and  and chlorpyrifos —  — pesticides that  that can contribute to cancer and a breakdown of the immune system. can contribute to cancer and a breakdown of the immune system. Tested products included Coke, Pepsi, and several other soft drinks (Tested products included Coke, Pepsi, and several other soft drinks (7Up, , Mirinda, , Fanta, Thums Up, Limca, Sprite), many produced by , Thums Up, Limca, Sprite), many produced by The Coca-Cola Company.The Coca-Cola Company.

CSE found that the Indian produced Pepsi's soft drink products had CSE found that the Indian produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European 36 times the level of pesticide residues permitted under European Union regulations; Coca-Cola's 30 times. CSE said it had tested the Union regulations; Coca-Cola's 30 times. CSE said it had tested the same products in the US and found no such residues.same products in the US and found no such residues.

Coca-Cola and PepsiCo angrily denied allegations that their products Coca-Cola and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms manufactured in India contained toxin levels far above the norms permitted in the developed world. David Cox, Coke's Hong Kong-permitted in the developed world. David Cox, Coke's Hong Kong-based communications director for Asia, accused Sunita Narain, based communications director for Asia, accused Sunita Narain, CSE's director, of "brandjacking" — using Coke's brand name to CSE's director, of "brandjacking" — using Coke's brand name to draw attention to her campaign against pesticides. Narain defended draw attention to her campaign against pesticides. Narain defended CSE's actions by describing them as a natural follow-up to a CSE's actions by describing them as a natural follow-up to a previous study it did on bottled water.previous study it did on bottled water.

In 2006In 2006