Case Digest (Case Context and Statement of Problem)
Considered as the world's largest beverage company and is the leading producer and marketer of soft drinks, Coca Cola Company has been refreshing consumers for more than a century. Led by its flagship carbonated beverage, Coca-Cola, the company's portfolio also includes other valuable and recognizable brands such as Diet Coke, Fanta, and Sprite. The company enjoys progressive sales growth in the 80's under the direction of Roberto Goizueta, and subsequently steered the Coca-Cola Company towards becoming the top US Corporation, until 1997 when the revered CEO died of lung cancer.
The Soda giant had suffered lackluster sales performance in the late 90's towards early 2000 which prompted the company to rehire E. Neville Isdell as its Chief Executive Officer. During his tenure, the organization faced with a number of challenges which encompass the following: the aged overbearing board, lack of transformative acquisition and innovation, ineffective marketing strategies, and friction with bottlers.
The powerful longstanding triumvirate Buffett, Allen, and Keough of Coke's board are the stringent keepers of the Goizueta's Way and rather myopic towards producing soda. Over the years, these three have been interfering with the pivotal decisions like the acquisition of big brands like Quaker Oats and Red Bull. Their unwillingness to diversify its carbonated drinks portfolio had left the company unable to adapt to local market's demands for new kinds of beverages like new age teas, value-added water, and ready-to-drink coffees.
Pepsi Company, Coke's arch-rival, has recognized this opportunity and diversified its product portfolio to include carbonated-drinks alternative and eventually cannibalized the sales of Coca Cola. The company's adamant belief that there is still plenty of room for growth left in soda market and lack of transformative innovation has made the company's standing well behind PepsiCo which...