Coca Cola Struggles with Ethics

As it is stated in the case of Coca-Cola, it was a marketing machine ran by bureaucrats and tried to create an image of their brand more than

By doing some research about the company, I found many articles where Coca-Cola is involved in different scandals like; environmental issues, animal testing, business practices, health isssues, employee issues, lawsuits, etc. Such a big accusations have strong facts who supported what it is being told, which make it very difficult to not believe in those rumors. I cannot say that I believe in all rumors, but I do believe there is some kind of true inside the rumors. It is very sad to think how companies can get to the point of acting illegally and unethically to obtain market power like Coca-Cola has been doing in the past

Coca Cola’s first main weakness is that it is highly susceptible to any kind of negative publicity. Every kind of negative publicity can hurt the brand badly. Some years ago after traces of pesticides were found in the products of Coca Cola, it had hurt the brand really hard. Sales had dipped in various corners of the world apart from the criticism that flowed. Any such thing can hurt the popularity and sales of coca cola. However, Coca cola can overcome this weakness by being more transparent regarding the ingredients it uses in the production of its brands.

Coca-Cola engaged in channel stuffing in an effort to inflate financial statements. This practice appears to create a false strong demand for products, which inflates earnings and misleads investors (Ferrell, Fraedrich, & Ferrell, 2013). This application distorts the true value of the organization.

The competitors of Coca Cola – Pepsi and others don’t really pose much of a threat and the Coke customers are loyal and prefer that specific brand only. All the channel members are supportive of Coca Cola and readily promote and stock it in their outlets. This makes the brand visible and helps it easily communicate the message that they want to convey. The customer size of Coca Cola is immense – it is a brand that is recognized and adopted all over the world.

The Coca-Cola Company (Coca-Cola), the world 's driving soda pop producer, works in more than 200 nations and offers 400 brands of nonalcoholic refreshments. Coca-Cola is likewise the most profitable brand on the planet. Coca-Cola is an all-inclusive perceived effective organization. The Coca-Cola was founded in May of 1886 and proceeds for over a century through the seasons of war and peace, success and misery and monetary blast and bust. As late as the 1990s, Coca-Cola was one of the most regarded organizations on the planet, assembling and known as an exceptionally effective management group. Since 1998, the organization has been battling with inner shortcomings and outside dangers.

Uniqueness of product/Importance of product: Coca cola only sells liquid products for human consumption (fizzy drinks, water etc.). Liquid is essential to the being of coca cola, and there are no other food stuffs which can substitute coca cola, or any other product besides drinks, this puts the supplier in a very strong position. Making this a threat to coca cola.

The expense of the agreements that Coca-Cola had to make too protect the secret recipe has been a huge challenge. They had to stop producing Coca-Cola in India because under the Indian Foreign Exchange Regulation Act (FERA) it is required to disclose the formula and collaborate with an Indian company. There have been numerous law suits over the years most notable was the bottling lawsuit.

During 1985 the Coca-Cola Company instituted a transformation of their flagship brand, thereby altering a formula principally contributing to a remarkable success story approximately one hundred years in the making. Conspicuous erosion of market share to rival Pepsi gravely concerned company executives on account of potential backlashes associated with exclusivity agreements coming out of the restaurant and vending industries. Now those contracts hung in the balance and were becoming particularly ominous. Moreover, losing out to their rival might mean imperiling en masse renewals of agreements going forward. A change in Coke's recipe would inevitably jettison an indomitable formula remaining unchanged for a century and had spawned a global enterprise. Could this create additional concerns for Coca-Cola Company's marketing and sales executives? In other respects and considering Coke the preeminent brand on the planet, could management have overlooked valuable intangible assets such as brand loyalty and goodwill cultivated over the decades? Be that as it may, development of a contemporary formula demonstrating an empirical preference over both present-day Coke and Pepsi began in earnest.

Coca-Cola values Quality, Integrity, and Passion. I think the principal reason Coca-Cola became extremely famous is the quality of product—Coke itself is an outstanding invention. Integrity of Coca-Cola can be demonstrated by its unstained policy. Coca-Cola makes their product without any commercial trouble and appropriate cost of product. Passion is what Coca-Cola seems to value much. Coca-Cola encourages its

Coca-Cola’s responsibilities include remaining respectful of all cultures and their laws and traditions, maintaining their ethics and values, while being accountable for their actions. They should offer compliance and social good as required by law, yet extends farther than their own interests. Utilitarianism also comes to mind.

Coca-Cola is the world’s largest beverage company specializing in the production in soft drinks. It had also grown over the past 120 years into one of the most reputable companies in the world with an instantly recognizable brand name (Thorne, Ferrell, and Jackson 408-409). However starting in the 1990s, Coke began to experience series of bad decision, mismanagement, and alleged misconduct (Thorne, Ferrell, and Jackson 409). Debbie Thorne, O.C. Ferrell, and Jennifer Jackson’s case study The Coca-Cola Company Struggles with Ethical Crises examines Coca-Cola and those troubles it has experienced in recent years.

Through the grass-roots programme, Coca-Cola has strengthened its position as a football insider and this helps to build the better brand reputation (Businesscase, 2014). What’s more, there are many environment protection news in its website such as Planbottle, Recyclometer and Arctic Home (Coca-Cola,2014c). The Coca Cola Company’s annual advertising spending was $2.9 billion in 2010 (Ajcnews, 2011). In addition, Cocacola’s total marketing expenses reached $6.9 billion in 2013  (Cocacolacompany, 2013) . With its largest advertising budget and strong marketing capabilities, Cocacola company can attract more clients and to do better than its rivals. A strong reputation can reinforce companys in hard times, differentiate products, and be a measure of value, however, reputations can be easily damaged (Gregory 2000:3). On August 5, 2003, Coca-Cola was found to contain pesticide residues which were known to result in cancer and damage reproductive system. Because of the event, the share of Cola-Cola dropped $5 in the stock market (Prcocacola, 2010).

“A Coke is a Coke, and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same, and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it."(Andy Warhol, 1975) Regardless of its corporate reputation, the organizational performance and its social responsibility of Coca-Cola makes it loved around the world. Ever since its creation in 1886 Coca-Cola has been a household brand known globally for generations of families. I have to mention, of all the cases researched this is my least favorite not only because of my childhood love for the product because the ethical issues in one way or another always manage to resolve themselves not before further tainting the reputation Coke worked so hard to obtain. Most times, whether an organization is innocent of an unethical act, it becomes secondary to the suspicion of the original act. Almost as if the court of public opinion has the power to ruin the reputation of an organization based on an unfounded accusation. In spite of my loyalty after having ready the case, I do believe Coca-Cola to be flawed. The contamination scare in Belgium is a great example of a public relations nightmare. The slightest hint of impurity should have pushed Coca Cola into crisis management mode but they were slow to react, citing it a minor issue (Ferrell, Fraedrich, & Ferrell, (2011). It was not until local officials

In beverage industry the competition very high so, to remain on the top position the company need lot of finance as well as lot of organizational changes. Coca Cola have not only competitors like Pepsi, Nestle and others also giving tough time.