Introduction
In 1886, the company started manufacturing soda and begun selling in the Caribbean and Canadian market on 1920s. As, Coca-cola finally had their branches all over in Asia to Europe and South America even in Soviet Union. In the Year of 2005, Coca-cola began selling their products all over the world and it evolved by producing non-alcoholic beverages. People started getting conscious on what they would drink, so they came up with the idea of new beverages.
Catalonia people gathered in Barcelona Center Square and protest because Coca-Cola refused to put their label in Catalan, it is the Catalonia Language, that is the reason why the issue got controversial and has been an issue until the present. This was happened in the Year of 1993 and it has been a 20 years of battle and remains unresolved.
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For this case study, the author is coming up with a different solution on how to solve the issue regarding discrimination of Catalan Language. The author is suggesting to accept the rules of Catalan to prevent the community from boycotting Coca-Cola products in their city but this may complicate things, as the issue of Spain-Catalonia Independence is happening that is why through negotiation, Coca-Cola company could use this approach to create a peaceful agreement that will benefit all.
Background
Dr. John S. Pemberton a pharmacist who invented a soda using flavored syrup, paired with carbonated water in 1886 and Frank M. Robinson who’s Pemberton’s partner and bookkeeper termed it after Coca-Cola. They sell it for 5 cents per glass and promoted through free samples. It grows and started being promoted through newspapers distributing it to some pharmacies. By 1888, Dr. Pemberton part of his business was sold to multiple businessman and died. A businessman in Atlanta namely Asa G. Candler, bought the product and with his lead, the Coca-Cola started expanding. Especially with the help of Joseph Bidden in 1894, by inventing Coca-cola sealed in bottles. Year of 1899, the three businessman in Chattanooga, Tennessee namely Joseph Whitehead, Benjamin Thomas and John Lupton, buy Coca-Cola bottling rights and give it to Asa for just $1 which make the Coca-Cola to be known in worldwide bottling system. During 1916, they agreed to have a unique contour bottle and advertised the product in 1970s.
Connecting with enjoyable, friends and great moments, the brand started creating jingles for the product in 1971-1979 and in 1980s, they created a strategy involving memorable slogans and used computer animation in 1993. In 2009, they added calorie information in the packaging for the consumers to be aware on what they are drinking and started the “Open Happiness”, it is a campaign to encourage the people and world to pause, have fun with CocaCola, and continue to enjoy effortless pleasures in life. As people prefer choosing low-calorie foods and beverages as culture evolves. So, Coca-Cola made Tab® in 1963 and Diet Coke® in 1982. Diet Coke was the world’s best-selling during the year of 1986. Diet Coke with Splenda, and Coca-Cola Zero was introduced in 2005 becoming successful in 140 countries.
They implemented the plant bottle which was created in 2009, from 30% renewable plant-based material and received Greener Package Award, DuPont Award for Packaging Innovation, and Design for Recycling Award from the Institute of Scrap Recycling Industries for it. According to a research, Coca-Cola can help in mild sickness like digestion, nausea and can help you focus, also increases your energy as sugar is one of its ingredient. Regardless of the medical benefits it gives, it is still a sparkling drink packed with sugar which is also diuretic (causing increased passing of urine) and it won’t help with rehydration. The bottom line is, Coca-Cola is really addictive but drink in moderation.
Evaluation of the Case
According to a study, consumers prefer to choose brands that compliments their personality, making brand personality important on attracting new consumers. The more distinct a brand is, the more it is easy to identify resulting to positive performance and Coca-Cola is the best example selling the brand with its iconic 'Open Happines' Campaign and other advertisements. Candler believed that creating a brand that delivers sincerity and excitement to every product they produce will stand out more. Despite becoming a leading soda beverages company, Coca-Cola also has its closest competitors in the market like Pepsi, Red Bull, Dr. Pepper Snapple, Nestle and Parle.
One of the Coca-Cola's toughest competitor is Pepsi which earned 20$B brands in its product portfolio in 2017. With its competitiveness and consistent valuable products, it earned 63.5$B on its net revenue and 28.8$B on its Gross Profit. On the same year, Red Bull succeeded on the market, starting in the countries of Turkey, India, Netherlands, Northern Europe and United Kingdom. It sell across 171 countries gaining 6.282 Billion Euros of profit and become a booming brand on beverage market. With its 50 refreshing brands, introduced in the US Market, Dr. Pepper Snapple gained 6.4 Billion Dollars net revenue. Meanwhile, entering the Bottled Water Industry, Nestle is accelerating with its Nestle Pure Life and Poland Spring rivalry with Coca-Cola's Dasani. And the Indian brand Parle, gained popularity with its juices and bottled water competition.
Through local channels of Coca-Cola, have the ability to produce products globally. The Company manufactures the products to sell its concentrates, beverage bases and syrups to bottling operators or the distributor which beverages are made, packed and distributed to the retailers like supermarkets and vending partners, who sells products to their consumers.
Iceland and Catalonia distributors, Coca-Cola Iberian Partners are working to distribute products of Coca-Cola to both parties. The labeling of the product in Iceland is printed in Icelandic but not in Catalonia. The Pro-Language Platform is an organization that promotes Catalan Language in Catalonia. It helps implementing the requirement for products being imported to be labeled in Catalan and yet large companies like Coca-Cola does not meet the law requirement. So, Bernat Gasull of the Pro-Language Platform created the Llei de l'Estatut del Consumidor (Consumer Statute) in which consumers have the right to receive information in Catalan relating to the consumption and utilize of goods, products and services to ensure their protection and wellbeing. Following with 'A taula en català' campaign that encourages the public administrations and large public and private bodies to consume only products labeled in Catalan. Another campaign was held in Plaça de Catalunya, Barcelona's Central Square on December 12th, 1993. Gathering 15,000 unfilled Coca-Cola cans and building a huge banner says 'Let’s label in Catalan' adopting the motto 'The Coca-Cola label in 135 languages around the world, but not in Catalan?'. The Catalan Parliament approved the Catalan Consumer Code in 2010 acknowledging the rights of the consumers to receive labels in Catalan. But this did not hinder Coca-Cola to refuse to follow the order. To commemorate, on May 31, 2014, the Plataforma per la Llengua gathered 40,000 empty Coca-Cola cans and build the 'Etiqueteu en Català!' (Label in Catalan!) mosaic at the same center square as a protest for Coca-Cola's stubbornness even after 20 years of lawsuits.
Proposed Solution/Changes
There is still an issue between Spain and Catalonia as one is aiming for independence and the other is thriving to conquest a community. Since the brand is already printed in Spanish, it is understandable if it will follow Catalan Consumer Code, this will be interpreted as a support from ones language over another but the company should clearly explain that it is just a matter of business so that the lawsuit would be put on an end and the company would not suffer from any boycotts from the people of Catalonia considering it is Spain’s largest city. Showing support for both municipality and country will be an equal win-win method. This solution is chosen to be proposed because it may be very complicated but this will bring more buyers as well as expanding its range around the world. With this, consumers will gain trust. You can think of it as brand selling, gaining their trust by abiding and respecting a culture, as well as an act of promotion of both parties (Catalan and Spanish) which may not be intended to happen but that is the effect of the settlement. This also brings peace through diplomacy, prevention of boycotts and such.
What if this brings more damage than solution? Worse, Coca-Cola products will be banned in Spain. This relative solution has a 60-40 chance of being effective, it may be risky but solutions are meant to be tested. If the Coca-Cola is banned from the country, negotiating is the best way to solve it. This solution may or may not work out but I think the chance of this being applied is possible. With the use of negotiation, both sides will be heard and the settlement should be beneficial for the Company, Spain and Catalonia. Through this, an agreement can be achieved and the relationship of the country from the company will strengthen.
How would they apply the solution? First, the company must clarify in both parties that it is only a matter of business and also a help for the people in the country as a sign of gratitude as the very first Coca-Cola was created in Eastern Spain at the small town of Valencia. Using diplomacy is always the best way to end a war peacefully by preventing less damage. Creating a negotiation, hearing both sides regarding their principles and making a solution that will be agreed by both parties and at the same time, the company should benefit from it too. After the discussions, an agreement should be made and signatures should be signed. In that way, there is a solid evidence of the settlement happened. Then the application of the conditions will now follow.
To strengthen the solution, the author provided related examples of cases in the business industry that were solved or could have been solved through the process of negotiation. The examples of the case studies are from a blog of Harvard Law School - Program on Negotiation.
· The Cyprus Crisis
Cyprus is a small Mediterranean Island, its economy is collapsing due to its debt in Cyprus Bank Depositors. The International Monetary Fund (IMF), European Central Bank (ECB), and the European Commission offered 10-billion-euro as a financial assistance to a collapsing economy to use its considerable amount of provision to do a one-time tax payment (paying all at once instead of annually). But it was not appealing enough for the Cyprus community so the Nation’s President was alone, seeking for a backup plan for his people. Perhaps the best deal you can make is through better than no deal ever again.
· Apple’s Apology in China
Apple CEO, Timothy D. Cook ask forgiveness to Apple customers in China regarding the Apple’s warranty policy and promised to correct the dilemma. With this case, Professor William W. Maddux of INSEAD compared Japan & United States’ reaction regarding the apologies. He and his colleagues discovered that asking forgiveness can be helpful in rebuilding the broken trust even so who’s fault is it. Especially, in this cross-cultural business negotiation, countries like China and Japan being considered having a collectivist cultures (one that's based on valuing the needs of a group or a community over the individual).
· Negotiation in Business: Apple and Samsung’s Dispute Resolution Case Study
April 2011, Apple CEO Tim Cook had present a lawsuit claiming Samsung copied the “look and feel” of the iPhone as the Korean corporation was developing the Galaxy phone line. Samsung CEO Gee-Sung Choi did not back down and accused Apple for refusing to pay royalties (payment to the one who invented the product) to use its technology for wireless transmission, Samsung is Apple’s biggest supplier. They tried compromising at the U.S. District Court of Northern California reaching a settlement in a high-profile U.S. patent case, and by cutting down the numbers of winning rights of owning (disputed patents) in half. Despite of reconciliation, Apple continued filing a motion and asked the presiding judge to prohibit its Samsung Galaxy Tab 10.1 sales from going somewhere as it was designed to copy Apple’s second generation iPad. The two CEO had a two-day talk in late May, 2012 but it didn’t create a progress as both sides refused to reject their arguments as a result of the trial and Apple winning $409 million. When a business dispute occurs, you will always do your best before bringing it to the courts to resolve the issue.
Recommendations
With the use of Entrepreneurial Competencies, application of negotiating skills and its vision to manage the issue and at the same time, benefit from it as a resource is a win-win method. Using the following Personal Entrepreneurial Competencies, the proposed solution was build: (1) Opportunity-seeking and initiative - in which the entrepreneurs explore opportunities and take the initiative to turn them become business situations (2) Taking calculated risks - which is one of the fudamental concepts in business growth (3) Goal setting - Entrepreneurs pursue significant and complex priorities (4) Persuasion and networking - Entrepreneurs influencing others to joim them or get something for them (5) Systematic planning and monitoring - Meaning deciding what to do and observing whether its worth trying.
As opportunity comes, goals will be set and as a business minded you will take the initiative to turn the situation were it favors you, with calculation of the risks and systematically planning, your goal can be achieved. All you have to do is persuade them to have a negotiation with you. That is what happening in the proposed solution. After calculating everything, to get rid of the obstacle, facing it as an entrepreneur is the solution by the use of negotiation. Having an agreement that favors both parties and at the same time, the business is what matters the most. The Coca-Cola Company can operate in the whole Spain without any issues, in which is appealing to customers as well as investors, as trust issues are being tested and will strengthen the brand as it is a crucial manner to have.
For further action to several issues left regarding the company, information seeking, and systematic planning and monitoring must be applied first. Studying the problem and having a more deeper understanding of it should be done to determine its instances on whether it will harm the business or not, before applying a solution. As an entrepreneur, taking a risk is one thing but every action should be carefully counted. One mistake can put the company in danger. First, you must seek opportunities from the situation before placing an action. And then, set a goal and vision to the mission, calculate its possibilities of becoming worth it before involving yourself in the identified issue.
Affect in Company’s Corporate Social Responsibility Policy
Corporate Social Responsibility Policy aims to ensure that companies operate ethically, with consideration of human rights, social, economic and environmental impacts of what they do as a business.
A company that has experienced conflicts regarding to different categories like environmental, social, ethical work, economic and human rights affects its Corporate Social Responsibility Policy. This conflicts damages the brand reputation of the company, as a result, they don’t have another choice but to take measures on it to control the situation. A high-value brand is essential to a company to execute business, including good performance relating to sustainability performance. According to a study, 86% of customers believe that a certain company has a positive image if the company is involving its business to make the world a better place. But the hurdle may produce a better result as the firm will be motivated even more to go global and take measures of different management to prevent it from happening again. This will improve its Corporate Social Responsibility Policy and will be maintained improving as the image of the enterprise influences largely on the consumers’ behaviour in which the economic benefits of it also differs. In which, Corporate Social Responsibility Policy is considered a section of long term growth strategies.
Source Links
- https://www.worldofcoca-cola.com/about-us/coca-cola-beverages-products/
- https://en.wikipedia.org/wiki/Criticism_of_Coca-Cola
- https://www.wgoqatar.com/2019/11/4-surprising-health-benefits-of-coca-cola-you-might-not-know/
- https://www.catalannews.com/society-science/item/study-shows-that-9-out-of-10-products-are-not-labeled-in-catalan
- https://www.pon.harvard.edu/daily/international-negotiation-daily/top-negotiation-case-studies-in-international-negotiations-from-business-and-global-politics/
- https://notesmatic.com/competitors-of-coca-cola-company/
- https://www.uniassignment.com/essay-samples/business/the-corporate-social-responsibility-initiatives-on-coca-cola-business-essay.php
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