Summary
The author (Jacklyn Jones) of the case outline that Coca-Cola Company is one of the largest beverage company. It offers more than 500 products in over 200 countries and has billions of sales each day. In 2006-2006 Coca-Cola was banned from distributing its products in the region of Kerala, India. Coca-Cola faced many problems and challenges, especially when the Kerala minister of health, Karnataka R. Ashok, banned the manufacture and sale of Coca-Cola products in that region claiming that it had some levels of pesticides, but was later approved by a British court.
In the 1960s and 1970s, the Indian economy had many challenges that hindered foreign companies to invest there. There were many restrictions on economic activities and the government had problems employing reform. They traditionally undervalued business and rated leisure as the most important activity. However, these restrictions were simplified with economic reforms in place, and many companies are doing business in India. Consequently, Coca-Cola hired the Energy Resource Institute (TERI) to evaluate its operations in India engaged because it was claimed that the company was engaged in disreputable behaviors like causing severe water shortage, fixing their water-extracting plants in drought-prone areas, and reckless disposal of toxic waste the company (Luthans & Doh, 2009).
India ad US Culture
Indians had no time for business, but engaged in other activities; they traditionally undervalued business and valued leisure as the main activity. On the other hand, the US has many cases of obesity and thus, avoided the coca-cola syrup product and the fact that the coca-cola drink was believed to be harmful. The US may have wanted to investigate the company, but with controls being put into place, they feared investing in the company that they were not sure of, with the government being unable to employ reforms. Similarly, India had bureaucratic and political divisions and is known to be extremely suspicious of foreign investors since the colonial era, and there have been some differences between the government of India and foreign investors (Fernando, 2002).
Reacting to Negative Feedback
Coca-Cola could have persuaded the government of India to remove obstacles and lower restrictions which hindered foreign investors from investing in India and act as a good example for foreign investments. Additionally, the company should have raised more business value other than leisure activities, and lower disputes among the few investors while raising awareness of their products. Also, the company should have made public awareness of the ingredients used in their products (Rupa, 2006). For example, people believed that Bisphenol, which was found on can linings, could cause health risks and corn syrup, which was believed to cause obesity. They believed that this syrup had too much sugar.
Effective Changes
If Coca-Cola wants to gain more market in India, it needs to hire skilled product managers to do competitor-analysis and market research. This will enable the manager to plan on how to change the decision criteria of customers so that they can buy the company’s products instead of buying elsewhere, and should also be able to evaluate and be aware of the longer-term market result.
If the company keeps on adding new products, it will increase sales by attracting new customers who may not be interested in the current products and services; it creates repeated sales from existing customers. Bigger sales will be achieved by combining assorted items into special package offers. Similarly, the production of lighter portable bottles which does not consume much energy in production and easy to transport is also vital. Therefore, the company should focus on customer satisfaction through conducting marketing research in the target market to differentiate itself from competitors (Punima, 2000).
Demonstrating Commitment
Companies like Coca-Cola and PepsiCo can demonstrate their commitment to working with other communities by gaining public trust through activities such as good waste management, removing their water-extracting plants from drought-prone areas, and avoiding contamination of groundwater. Similarly, having many projects on water conservation improves a company’s image. Thus, companies must hire reputable organizations that are trusted by the government and the consumers to evaluate their production processes while, inviting people to their company to see how the drinks are made (Luthans & Doh, 2009).
Recommendations
First, Coca-Cola should anticipate change because there are many aggressive – innovative competitors, and dynamic technologies because of the problems and the challenges that the company has faced in many years. The company should not wait for income declines to act but should be able to focus ahead. This can be achieved by increasing the number of products and using different marketing methods. Also, Mansbach and Rhodes (2008) affirm that advertising, promotion, and packaging are important in marketing.
Furthermore, to gain consumers’ trust, Coca-Cola should allow trusted organizations or the government to review their product manufacturing processes for consumers to have a positive attitude about their products while making sure that their products pass the standards of quality products. Moreover, conducting customer feedback will enable the pre-production of products to cater to customers. This will enable them to expand their distribution networks to other countries such as Africa thus getting more income and creating many job opportunities.
References
Fernando A.C. (2002). Business Ethics: An Indian Perspective. India: Pearson Education.
Luthans R.M. & Doh, J.P. (2009). International Management: Culture, Strategy, and Behavior (7th ed.). New York: McGraw-Hill.
Punima, B. (2000). Cultural and Critique and the Global Corporation. Indiana: Indiana University Press.
Mansbach, R. W. & Rhodes, E. (2008). Global Politics in Changing World. New York: McGraw-Hill.
Rupa, B. (2006). India Business Checklist: An essential Guide to doing Business. India: Pearson Education.