Coca-Cola and Bp Case Study
Case Study
Coca-Cola and CEO Douglas Ivester
And
BP and CEO Tony Hayward
1. If Douglas Ivester was so successful, for years, on the executive staff, why did he fail when he was given the CEO/president position? Give an overall impression, broad stroke explanation of why he failed. Ivester was a hardworking, diligent CEO, but he lost sight of the people side of Coca-Cola. In any business people are a very important aspect that needs to be nurtured because without them the business is nothing but a name. Ivester’s predecessor, Robert Goizueta, had a “management mantra -- this is a people-relations business” (Knoop, 11). Ivester seemed to forget that mantra and took over the company selfishly.
2. List the key situational challenges and opportunities facing Ivester when he was appointed CEO after the death of Roberto Goizueta?
• Acquisition of Orangina
• Purchase agreement for Cadbury Schweppes
• Contamination in Belgium
• Anticompetitive Allegations
• Management Reorganization
• Bottler Relations
3. What were the primary missteps Douglas Ivester made during his tenure as CEO of Coke and identify why these worked against him? The first misstep made by Ivester was the severed ties between the French and Coca-Cola. Ivester pushed to acquire Orangina which “the deal was expected to boost Coke’s market share from 49% to 58% in France” (Knoop, 14). The French denied the acquisition because it “wouldn’t make enough of a contribution to economic progress to compensate for the risks of distortion of competition in the carbonated, non-cola, on premise soft drinks market” (Knoop, 14). The second misstep was the contamination scare in Belgium. Thirty-Three school children became ill after drinking Coke. Ivester’s response to the incident was late and unsympathetic. Coca-Cola was poor in communication on the problem. The third misstep was in regards to the retaliation on Coca-Cola’s competitors, Pepsi and Schweppes. In a company memo that
Coca-Cola and CEO Douglas Ivester
And
BP and CEO Tony Hayward
1. If Douglas Ivester was so successful, for years, on the executive staff, why did he fail when he was given the CEO/president position? Give an overall impression, broad stroke explanation of why he failed. Ivester was a hardworking, diligent CEO, but he lost sight of the people side of Coca-Cola. In any business people are a very important aspect that needs to be nurtured because without them the business is nothing but a name. Ivester’s predecessor, Robert Goizueta, had a “management mantra -- this is a people-relations business” (Knoop, 11). Ivester seemed to forget that mantra and took over the company selfishly.
2. List the key situational challenges and opportunities facing Ivester when he was appointed CEO after the death of Roberto Goizueta?
• Acquisition of Orangina
• Purchase agreement for Cadbury Schweppes
• Contamination in Belgium
• Anticompetitive Allegations
• Management Reorganization
• Bottler Relations
3. What were the primary missteps Douglas Ivester made during his tenure as CEO of Coke and identify why these worked against him? The first misstep made by Ivester was the severed ties between the French and Coca-Cola. Ivester pushed to acquire Orangina which “the deal was expected to boost Coke’s market share from 49% to 58% in France” (Knoop, 14). The French denied the acquisition because it “wouldn’t make enough of a contribution to economic progress to compensate for the risks of distortion of competition in the carbonated, non-cola, on premise soft drinks market” (Knoop, 14). The second misstep was the contamination scare in Belgium. Thirty-Three school children became ill after drinking Coke. Ivester’s response to the incident was late and unsympathetic. Coca-Cola was poor in communication on the problem. The third misstep was in regards to the retaliation on Coca-Cola’s competitors, Pepsi and Schweppes. In a company memo that
Cited: Knoop, Carin-Isabel, Reavis, Cate, and Watkins, Michael. “The Coca-Cola Company (A): The Rise and Fall of M. Douglas Ivester (Abridged).” Trumball, Mark. “Four Reasons Tony Hayward is Apparently Out as BP Chief.” The Christian Science Monitor. 26 July 2010. http://www.csmonitor.com