Coke
The Coca-Cola Company Struggles with Ethical Crises
I. Summary:
Incepting in the late 1800s, Coca-Cola has been famous worldwide in beverage industry. Some widely recognized products are Coke, Diet Coke, Fanta, Sprite, Virgin Cola, etc. CocaCola dominated over PepsiCo in the US in 1993, leading in global soft-drink market and was the most-recognized trademark in the world. Its strong reputation was reinforced with philosophic practice, philanthropic initiatives, international market orientation and strategic-making decisions. Coca-Cola’s mission is to benefit and refresh everyone to whom Coca-Cola touches. However, its performance has been associated with many ethical crises over the last ten years. The main reasons lie in leadership issues, poor economic performance and other upheavals. From 1997 to 1999: Accused of sending extra concentrate to Japan bottlers to inflate profits. This inflation was related to Channel Stuffing. In 1999: Associated in Contamination Scare because Coca-Cola products were mold. Coca-Cola must recall products and lost many market shares. Failed in doing business in French market and other European countries due to lacking of knowledge of European law and culture. Fined $193 million because of Racial Discrimination against African American. In 2002: The Coca-Cola - Company Struggles with Ethical Crises Page 1
Got into trouble with the Burger King Market Test. In 2006: Faced problems with bottlers, was blocked from expanding Powerade directly to Wal-Mart and was reported negatively by media. Faced international problems related to Unions because the death and hiding of Coca-Cola workers. Associated to sell trade secrets when a administrative secretary and two accomplices were accused of stealing and selling fourteen pages of Coca-Cola logo-marked and samples of top-secret products. Nevertheless, Coca-Cola denied almost ethical crises and responded slowly. Coca-Cola reputation has been reduced over time because of these crises. In
I. Summary:
Incepting in the late 1800s, Coca-Cola has been famous worldwide in beverage industry. Some widely recognized products are Coke, Diet Coke, Fanta, Sprite, Virgin Cola, etc. CocaCola dominated over PepsiCo in the US in 1993, leading in global soft-drink market and was the most-recognized trademark in the world. Its strong reputation was reinforced with philosophic practice, philanthropic initiatives, international market orientation and strategic-making decisions. Coca-Cola’s mission is to benefit and refresh everyone to whom Coca-Cola touches. However, its performance has been associated with many ethical crises over the last ten years. The main reasons lie in leadership issues, poor economic performance and other upheavals. From 1997 to 1999: Accused of sending extra concentrate to Japan bottlers to inflate profits. This inflation was related to Channel Stuffing. In 1999: Associated in Contamination Scare because Coca-Cola products were mold. Coca-Cola must recall products and lost many market shares. Failed in doing business in French market and other European countries due to lacking of knowledge of European law and culture. Fined $193 million because of Racial Discrimination against African American. In 2002: The Coca-Cola - Company Struggles with Ethical Crises Page 1
Got into trouble with the Burger King Market Test. In 2006: Faced problems with bottlers, was blocked from expanding Powerade directly to Wal-Mart and was reported negatively by media. Faced international problems related to Unions because the death and hiding of Coca-Cola workers. Associated to sell trade secrets when a administrative secretary and two accomplices were accused of stealing and selling fourteen pages of Coca-Cola logo-marked and samples of top-secret products. Nevertheless, Coca-Cola denied almost ethical crises and responded slowly. Coca-Cola reputation has been reduced over time because of these crises. In
References: Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2008). Business Ethics: Ethical Decision Making and Cases. US: South-Western, Cengage Learning. Haig, M. (2005). Brand Failures: The Truth about the 100 Biggest Branding Mistakes of All Time. Kogan Page, Limited. Hays, C. (2004). Real Thing: Truth and Power at the Coca-Cola Company. Random House, Incorporated. Rothman, H. (2001). 50 Companies That Changed the World : Incisive Profiles of the 50 Organizations - Large and Small - That Have Shaped the Course of Modern Business. Career Press, Incorporated. The Coca-Cola - Company Struggles with Ethical Crises 10 Page