1. In the 1980s, under CEO Roberto Goizueta, Coca-Cola was a global brand with a growing presence in global-emerging markets like Europe, Russia, and South East Asia. It beat back its main rival Pepsi to be a leader in the carbonated beverage market with a 70% market share. During the 1990s however, under new CEO M. Douglas Ivester, the company’s market share started declining due to political (regulatory), economic, social (consumer), and technological (operations) challenges in the marketplace.
While Coca-Cola was trying to consolidate its position in it’s core cola market, there was an increasing shift in consumer tastes in favor of non-carbonated beverages such as juice, tea, and bottled water. Local brands in local markets moved in to fill the gap in Coca-Cola’s product lineup, and to cater to the growing local tastes and nationalistic preferences of consumers.
Coca-Cola’s global bottling & distribution system, consisting of ten anchor bottlers, was one of its greatest strengths. These independent bottlers like CCE, in which Coca-Cola held a significant minority stake, enjoyed a good run till the currency crises in Russia, Asia and Latin America in 1998 put a strain on the bottlers’ profit margins and on Coca-Cola’s profits in turn.
European regulatory authorities scuttled Coca-Cola’s growth and acquisition plans by invoking anti-monopolistic regulations against the company. The nationalistic and protectionist governments took a political stance against Coca-Cola, which was perceived to be a symbol of domineering, American businesses. Health and hygiene issues related to Coca-Cola’s products in Belgium & France further dented the company’s prospects in Europe. Domestic (US) and global...
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.... This strategic change was symbolized through Daft’s decision to stop construction of a large, ostentatious new headquarters on European soil.
Although Daft’s changes put Coca-Cola in a position to respond well to local opportunities, his global strategy was subject to certain risks. First, innovative product ideas and successful marketing strategies implemented at the local level might inadvertently remain there. In addition, customizing products to meet local tastes could be expensive.
And finally, with increased independence of regional offices, Coca-Cola’s main global mission might not be carried out consistently throughout the globe. Daft must adopt a strategy that incorporates local sensitivities with a unified global approach. This approach will put Coca-Cola in a position to be a global leader in the 21st Century.
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