COCA-COLA CRISIS IN BELGIUM, 1999.
The assignment given was to choose a case with an organization or person that suffered a PR crisis, and didn’t manage it correctly from a PR perspective, such as miss-communications with stakeholders, media etc. I chose to write about the crisis that happened in Belgium in 1999. I will analyze the steps the company took towards to solve the issue, explain what they did wrong, and give my own opinion on how they could’ve handled it better. I will end my case with a final conclusion, and what the situation is today. But firstly I will start by talking a little bit about the Coca-Cola Company.
The Coca-Cola Company is the global leader in the soft-drink industry, with world headquarters located in Atlanta, Georgia. Coca-Cola and its subsidiaries employ nearly 30,000 people worldwide. Syrups, concentrates and beverage bases for Coca-Cola, the company's flagship brand, and more than 160 other soft-drink brands are manufactured and sold by Coca- Cola and its subsidiaries in nearly 200 countries around the world. Approximately 70 percent of volume sales and 80 percent of profit come from outside the United States. The European market provides 26% of the company’s US$18B in revenues. Coca-Cola owns a 49% share of the European soft drink market, compared to Pepsi-Co’s 5%.
Coca-Cola’s Corporate Mission Statement
We exist to create value for our share owners on a long-term basis by building a business that enhances The Coca-Cola Company’s trademarks. This also is our ultimate commitment.
As the world’s largest beverage company, we refresh that world. We do this by developing superior soft drinks, both carbonated and non-carbonated, and profitable nonalcoholic beverage systems that create value for our Company, our bottling partners, our customers, our share owners and the communities in which we do business.
In creating value, we succeed or fail based on our ability to perform as worthy stewards of several key assets:
1. Coca-Cola, the world’s most recognized trademark, and other highly valuable trademarks.
2. The world’s most effective and pervasive distribution system.
3. Satisfied customers, to whom we earn a good profit selling our products.
4. Our people, who are ultimately responsible for building this enterprise.
5. Our abundant resources, which must be intelligently allocated.
6. Our strong global leadership in the beverage industry in particular and in the business world in general.
Additionally, Coca-Cola has a stated commitment to social responsibility through philanthropy and good citizenship. The company's reputation for good corporate citizenship results from charitable donations, employee volunteerism, technical assistance and other demonstrations of support in thousands of communities worldwide.
From 1984 to 1997, Robert Goizueta ran Coca-Cola like; “a ship in calm waters” as we may say, it was going smoothly. In his 13 years at the helm of Coke as CEO, Goizueta transformed Coke from an Atlanta cola company to an international brand phenomenon. Analysts and employees alike viewed Goizueta like a “God.” In 1997, Doug Ivester succeeded Roberto Goizueta as CEO of Coke following Goizueta’s death from lung cancer. Ivester, an employee of the company since 1979, had previously been Goizueta’s right hand financial engineer and later his chief operating officer. On the face of it, the transition would appear seamless.
Doug Ivester has often been described as a very “rational” man with a “bulldog” leadership style. James Chestnut, Coca-Cola’s chief financial officer, says Ivester is a “terribly rational”...
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