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Coca Cola Crisis Case Study Business Essay

Coca Cola Company is the world's greatest beverage company with developing, distributing and marketing of non-alcoholic drink concentrates around the world. Coca Cola brand and formulation was bought by Asa Candler in 1889 who included the Coca Cola Company in 1892. Coca Cola offers almost 400 brands in more than 200 countries.

CSE possessed a news release which mentioned "some 12 wintry drink brands around Delhi contained a lethal cocktail of pesticide residue in it". The testing were conducted by the Pollution Monitoring Lab which found 12 frosty drink brands comprising pesticide residue exceeding the global benchmarks by 35 times. Since the Bureau of Indian Criteria (BIS) has an unclear and indeterminate requirements for pesticide residues, CSE used the Western european standard for maximum appropriate restrictions for pesticide in package water. The pesticide that has been found, hazardous for the human body, which were recognized to cause cancer, birth flaws and severe damage to the immune system, nerves and reproductive systems.

Analysis

Many of the experts have been arguing that the pesticide which really is a by-product of India's agriculture industry leaked into the groundwater which Coco Cola uses for the production of the refreshments. Most of the companies in India must meet a satisfactory amount of pesticide allowed however when tested; the level was a lot more than the acceptable level. In a matter of only 2 - 3 weeks the deal of Coca Cola dropped by 40 percent. The Leader and CEO of Coca Cola India, Sanjiv Gupta rejected the allegations created by CSE also stated these to be unaccredited and misleading. They even challenged the credibility of CSE and their results and are planning to make the data public.

On one side the studies done by CSE, led to the exceeding existence of pesticide in those 12 samples but on the other palm when the government did the testing, it found no unsafe level of pesticide which was mentioned by the Minster of health and family welfare. CSE disputed the evaluation and stated that both results can't be right.

Later Coca Cola hiked the prices by 15 percent in India providing the reasons that the hike in prices covers up the upsurge in raw material, the cost of distribution and also the effect of the incorrect pesticide accusation which resulted in a drop.

This uproar also crossed across to america where the University or college of Michigan quit the sales of Coca Cola products along with universities like New York University, Rutgers School New Jersey and Santa Clara College or university California which also stopped the sales of Coca Cola products. Each one of these universities had a 1. 4 million contract with Coke.

In India, Coca Cola teamed up PepsiCo on the campaign to confirm that their products were safe plus they also granted a combined declaration in the crisis through ISDMA (Indian Soft Drinks Manufacturers Association). They also stated that the client safe practices was their concern and that the soft drinks which are manufactured in India fulfil the international as well as the nationwide norms and legislation.

Coke was under a great deal of pressure by the protestors, who even attacked the retailers in Delhi which sold Coca Cola products. The Indian Supreme Courtroom also pressurized the company to reveal the trick recipe which has been kept a secret for nearly 120 years, so that more assessment could be done. Expresses like Gujarat and Madhya Pradesh restricted the Coca Cola products and desired a nationwide ban. Sales dropped by 40 percent and also the Coca Cola Bottling Company stock went down 5 percent. That is arguably the largest controversy in Coca Cola Company in India.

Coke concentrated more on the arguing the allegation created by CSE of the pesticide charges instead on focusing on getting back the support of the clients, especially in India. This triggered a backfire as mentioned by Richard. S. Lewick who specialises in problems management. All this led to the main concern of being successful again the support of the consumers, quality issue, environmental concern and political concern.

THE STAKEHOLER THEORY

MANAGEMENT

EMPLOYEES

INVESTORS

COCACOLA COMPANY

SUPPLIERS

LOCAL COMMUNITY

GOVERNMENT

CONSUMERS

CUTOMERS

The table below states the degree of importance and the power of influence of each stakeholder singularly:

STAKEHOLDERS

DEGREE OF IMPORTANCE

POWER OF INFLUENCE

Employees

5

4

Investors

5

4

Suppliers

5

4

Management

5

5

Consumers

5

4

Customers

5

5

Government

5

5

Local community

4

3

Recommendations

I hope the following advice and strategies can help Coca Cola rebuild its image and reputation in India to increase sales of Coca Cola products, enhance the ratings and also earn the trust of people in India.

Internal suggestions:

The first concern should be to re look at the testing amenities and update this purification system throughout the vegetation in India since the company dedicates to offer healthy and stimulating products. The employees should also be regularly modified about how the crisis has been administered. A essential bi monthly getting together with should be organised which will short on the laboratory results, procedure and the new regulations. A toll free 800 number can be created where in fact the customers can call and have the operators with any questions they could have and want cleared.

External suggestions:

Immediately following the CSE allegations and the news release of higher level of pesticide in Coca Cola products, the Leader and CEO of Coca Cola India should have held a information conference addressing the issue and assuring the general public that the business is focused on offering high quality product and that the Coca Cola independent tests have led to the support of the expectations established by the Euro Economic Commission rate (EEC), and the representatives also was required to take care of not admitting to the guilt but assuring that the company is dedicated and devoted to the protection of the individuals and always helps to keep on researching on bettering all the products. The company also needs to have increased the transparency by making the laboratory results general public on quality control etc. , on the website.

Instead of attacking the CSE for the allegations made by them, joining causes with them can help a great deal in solving the situation which would avert the loss of customers in India and also across the world. Coca Cola Company could also have mentioned that the studies done by CSE, was done by an authorized. The company might have been less offensive which would make the general public believe that the company is taking this subject seriously and they do care about medical and safeness of the public.

Another advice can be considered a circumstance of DENIAL i. e. Coca Cola India can just disregard the allegations created by CSE. Coca Cola being a powerful brand could deny the allegations, by just overlooking it because eventually after some time individuals will forget about it. This is a simple alternative but additionally, it may backfire because the reporters are recognized to criticise and make an issue through media. Despite the fact that the NGOs are small but the general public trusts them more that could grow to be a tragedy for Coca Cola.

Just as in the case of Belgium, a year or two previously, Coca Cola India could arrange a PR advertising campaign which would help them regain customer devotion. In the case of Belgium, the company there set up a PR advertising campaign where vouchers, products being sent to the house were offered which functioned for Belgium because it only consists of 4. 4 million homeowners which is relatively less compared to that of India. So the PR plan plan must be tailored to attain out to individuals in India. It can also show and display that Coca Cola is not simply a huge greedy company which concentrates only on gains but is a global citizen which also provides back to the folks of the community.

CONCLUSION

It can be reassured that the advice and strategies mentioned previously will establish itself to be socially and environmentally responsible which prioritizes the safe practices of the general public in providing safe and delightful soft drinks that may eventually lead to the sustainability of the Coca Cola India. co and its profit. The problems spotlights on the factors that commodities like clean normal water cannot be considered lightly and is a serious matter which need to be made a priority and the quality of the product should regularly be examined and kept up to date. The examination of the problems regarding socio- ecological and politics changes, each is covered here as in the government going for a stand, environmental actions and public safe practices.

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