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Coca-Cola Company Case Study 2007

I. Summary of case facts

Coca-Cola had made a type of bottled water called Kinley. During production of the bottled water the Pollution Monitoring Laboratory (PML) performed some tests on the product. In these tests the PML found that the bottled water revealed evidence of pesticide residue. This information had gotten to the public, so Coca-Cola decided to stop production of the product and eventually this incident was forgotten.

Due to Coca-Cola saving most of their consumers by quickly removing the problem product many other suspicions grew and brought later sanitation tests. A later test showed that Coca-Cola and Pepsi products in India contained residue of pesticides.

Coca-Cola and Pepsi called these accusations “baseless”. Pepsi had done their own test on their products and found no traces of pesticide residue. Coca Cola and Pepsi had threatened legal action and denied the validity of the claim. Word about the pesticides had spread to many consumers in India, and they believed that the findings were true and agreed with parliament’s move to ban the sale of Soft Drinks

II. Statement of problem

Coca-Cola India got some bad publicity from the Center for Science and Environment (CSE) stating: “12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues”. The pesticide residue was 30-36 times higher than global standards and was found in three samples of twelve PepsiCo and Coca-Cola brands. The pesticides include lindane, DDT, malathion, and chlorpyrifos. These four pesticides have been known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system.

This is very bad for Coca-Cola, because the amount of people consuming Coca-Cola in India was dramatically increasing each year. Now, due to this dilemma there may be a substantial decrease in the amount of bottles Coca-Cola will make the following years to come.

Many allegations have been made about Coca-Cola having separate standards from western countries and India. The allegations imply that there are no standards in India. If people believe that Coca-Cola is toxic in India then consumers will not be purchasing the product.

III. Alternative Solution

There are a couple alternative solutions that Coca-Cola can make to get through this situation. One solution they could try would be to do the same thing they had done when there had been pesticide residue in their bottled water. That solution was to do nothing and let it ride out until people had forgotten. This is probably not a very smart solution to go with.

Another solution would be to do numerous tests at the factory where the supposed contaminated sodas were found. If after doing numerous tests and no pesticides are found then they may want to take legal action against the business that made the false accusations. Also they may want to make a public announcement that the accusations previously made were false, and the company that made the false accusations had been sued.

One solution may be to do a checkup on a couple factories and the factory where the contaminated sodas were found. Then explain to the consumers that the accusations were false.

If Coca-Cola had done their own tests and found a couple traces of pesticide residue they would need to clean up the factories and possibly set a standard. Then they would have to do a recall on many products surrounding the area. Finally they would need to let the consumers know the truth and explain the new regulations or standards that have been set. This may not be the best solution due to a lot of consumers no longer buying coke; however, it would be an honest solution.

IV. Recommendation

I would recommend that Coca-Cola India and Coca-Cola US come together and figure out the best solution. I think they should do numerous tests to several factories around the area where the contaminated sodas came from.

If the tests show up false, where there are no contaminated sodas, I would recommend taking legal action to the business that made the false accusations. Then they should let the consumers know what had been done on this Issue. Finally they could use the money they got from suing the business towards hiring people to do routine checkups at the factories. This will insure consumer satisfactory.

If the tests show up true, of having pesticide residue, I would recommend Coca-Cola fold and do a massive recall of products. Coca-Cola would then need to set a higher standard and regulations for the sanitation of the factories. Finally they would need to let the consumers know that they guarantee their product is safe. They should not mention whether the pesticide residue was true or false, but they should let the consumers know that they had increased the standards and regulations in their factories to secure consumer loyalty.

 

History analysis

In May, 1886, Coca Cola was invented by Doctor John Pemberton apharmacist from Atlanta, Georgia. John Pemberton concocted the CocaCola formula in a three legged brass kettle in his backyard.

Being a bookkeeper, Frank Robinson also had excellent penmanship. Itwas he who first scripted "Coca Cola" into the flowing letters which hasbecome the famous logo of today.

The soft drink was first sold to the public at the soda fountain inJacob's Pharmacy in Atlanta on May 8, 1886.

Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well as the caffeine-rich kola nut.

Until the 1960s, both small town and big city dwellers enjoyedcarbonated beverages at the localsoda fountainor ice cream saloon.Often housed in the drug store, the soda fountain counter served as ameeting place for people of all ages. Often combined with lunchcounters, the soda fountain declined in popularity as commercial icecream, bottled soft drinks, and fast food restaurants became popular.

On April 23, 1985, thetrade secret"New Coke" formula was released.Today, products of the Coca Cola Company are consumed at the rate of more than one billion drinks per day.

Vision Statement

(actual)To maintain our reputation as the leading cola company in the world.

Mission Statement

(actual)Everything we do is inspired by our enduring mission:

To Refresh the World

... in body, mind, and spirit.

To Inspire Moments of Optimism

... through our brands and our actions.

To Create Value and Make a Difference

... everywhere we engage.(proposed)At Coca Cola we believe our main responsibility is providing customers (1) withrefreshing beverages including soft drinks, water, energy drinks, juices, and tea (2) to fitany occasion in their day to day lives (6). Our signature product, Coke (7), is a favoritearound the world and a wide variety of our products are sold in over 200 nations (3). Weuse the only the most sophisticated equipment (4) to process and make our products to