The crisis that happened at Coca Cola was a very crucial incident. It affected issues such as brand and reputation, and the company has to take action so as not to ruin its image. Coca Cola is a company with a very strong brand name all over the world. An attack like this of the NGO can lead any company to problems. Although the Center for Science and Environment attacked the safety of Coca Cola India's products, Coke was well within the Indian government's legal limits for pesticide residue in beverages. The fact is that the country's standards are weak, so the problem of Sanjiv Gupta and his team is how to rebuild trust. Furtherore, Gupta tries to find ways on how he could contribute on the creation of higher standards for food and beverage safety. First of all, Gupta should focus on specific problems such as:
After the NGO's attack, sales dropped by 30-40% in only two weeks.
The company is a valuable brand, while that value is created by the image of the company and its product. The CEO should keen on the ways that Coca Cola, which has value from its image, can manage reputational risk.
The company should become stronger on issues of such crises, and avoid facing them ineffectively in the future.
Clubs, restaurants, etc have stopped selling Coke products. The company should solve this problem because image gets damaged. According to the reactions of the customers, we could easily evaluate the crisis in India as a major crisis. After the announcement that CSE made, Coca Cola attacked the credibility of the CSE and their lab results, by citing regular testing at independent laboratories proving the safety of their products. The reactions of the consumers that are making this crisis as a major are the following:
Sales had dropped by 30-40 percent in only two weeks on the heels of a 75% five year growth trajectory and 25-30 percent year-to-year growth.
Many clubs, retailers, restaurants, and college campuses across the India had stopped selling Coca Cola.
Finally, the Indian government banned Coke products in Parliament and state governments launched independent investigations, sending soft drink samples to labs for testing. As we mentioned before, Coca-Cola's value is created by the image of the company and its products. So, it would be expected that the consumers would continue to buy the products of Coca cola. But, after the announcement of CSE the majority of consumers believed the findings were correct and agreed with the parliament's move to ban the sale of soft drinks. So, that makes the crisis a major one, and Coca cola should regain the faith of their costumers. Coca Cola was prepared enough to deal with the CSE's allegations. As we found out, the company did not deny doing the tests in independent labors. What the company did wrong was the fact that they did not do any attempt to collaborate with CSE, at least to take time to understand their real intentions. The communication strategy that was applied was the following: the Company's operations demanded a matrixed team organization. The communication functions included: Media Relations, Nutrition Communications, Financial Communications, and Marketing Communications. But the problem was that the geographic diversity of the company's businesses required regionally-based communication leaders. As a result, five regional communications directors serviced North America, Latin America, Asia, Europe, and Africa with their own teams of communications professionals. All these were reported to the Chairman & CEO in India.
The most important issue in order to confront a crisis correctly is how the communication will be during the crisis. Small regional problems can turn into big issues if they don't manage them correctly. The recommendations that we have to mention concerning the communication strategy that Coca cola are the following:
Should communicate with key constituents:
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