Coke-India: Case Study
Memo case study 1
To: Robert Smith (Executive Director-Food and Agriculture Organization of the United States)
From: (Student at UMUC)
Subject: Safety and quality concerns of Coke products in India.
Date: June 07, 2013
Coca-Cola has considerably gained a large share of the market in the soft drinks industry. In the chase of expanding to foreign companies, it decided to explore India which presented great potential for revenues due to the growing population. The company built bottling plants in India and also contracted with local entrepreneur to facilitate the circulation of the products. Acquisition of local beverages companies, aggressive advertising campaigns and competitive pricing played an important role in helping penetrating the market and gave Coca-Cola a competitive advantage over local beverages. In no time, Coca-Cola had gained the trust of the population and experienced a tremendous growth of the business in the region. This success was tarnished when accusations were brought to the government of India about a discovery found in the tests conducted by the Center for Science and Environment (CSE), a Non-Governmental Organization in India. The discovery revealed that elevated amount of toxic substances (including Lindane, DDT, malathion and Chlorpyrifos) had been found in Coke and Pepsi products; especially in soft drinks. These substances are known to be dangerous to human health including causing cancer, birth defects and damage to the nervous and reproductive systems. Following this discovery, India’s government banned all Coke and Pepsi products and launched an independent investigation. Coke stock price plumed; the company promised to launch its own investigation and provide the results of the tests to disclaim the CSE’s accusations to regain the trust of the consumers in India. Previous cases involving Coca-Cola Company show that this is not the first time that the company is involved in this type of allegations.
The purpose
To: Robert Smith (Executive Director-Food and Agriculture Organization of the United States)
From: (Student at UMUC)
Subject: Safety and quality concerns of Coke products in India.
Date: June 07, 2013
Coca-Cola has considerably gained a large share of the market in the soft drinks industry. In the chase of expanding to foreign companies, it decided to explore India which presented great potential for revenues due to the growing population. The company built bottling plants in India and also contracted with local entrepreneur to facilitate the circulation of the products. Acquisition of local beverages companies, aggressive advertising campaigns and competitive pricing played an important role in helping penetrating the market and gave Coca-Cola a competitive advantage over local beverages. In no time, Coca-Cola had gained the trust of the population and experienced a tremendous growth of the business in the region. This success was tarnished when accusations were brought to the government of India about a discovery found in the tests conducted by the Center for Science and Environment (CSE), a Non-Governmental Organization in India. The discovery revealed that elevated amount of toxic substances (including Lindane, DDT, malathion and Chlorpyrifos) had been found in Coke and Pepsi products; especially in soft drinks. These substances are known to be dangerous to human health including causing cancer, birth defects and damage to the nervous and reproductive systems. Following this discovery, India’s government banned all Coke and Pepsi products and launched an independent investigation. Coke stock price plumed; the company promised to launch its own investigation and provide the results of the tests to disclaim the CSE’s accusations to regain the trust of the consumers in India. Previous cases involving Coca-Cola Company show that this is not the first time that the company is involved in this type of allegations.
The purpose