Negotiation and Cross-Culture Management – Coca-Cola Harvard Case Solution & Analysis

Negotiation and Cross-Culture Management – Coca-Cola Case Study Solution

In India, the Coca-Cola Company has been expanding its product’s production with an extensive use of its blotting system. For this purpose, the organization has been using fresh water in a huge amount, specifically in the state which has water lacking, and the state has often faced water scarcity. The extensive use of water and hazardous chemicals in its products was an allegation on Coca Cola that was put by the Indian nation. Due to this reason, the sales of Coca-Cola has badly decreased,and allegations were made on the organization due to rising concern of health of the people who drink that polluted water. This captured the imagination of people leading to a disadvantage for the multinational organization. On the other hand, the production of Coca-Cola products was banned by the Indian government for quite a few months.

The key challenges that were faced by the organization included brand image re-building in the eyes of Indian public and to regain their consumers trust. Another challenge posed to organization was its socially responsible reputation as a commercial firm in the United States of America.With the fact, America is a developed nation whereas India is developing one with differentiated standards.

Alternatives:

Alternative – Product Advertisement

The significant way of communication with the consumers to build art, promote and maintain the awareness of product with its potential consumer range.

Pros:

  • It significantly increases the products’ sales volume with possibility of mass production.
  • Repetitive advertising of product leads to the stabilization of sales volumes.
  • Existing product market’s maintenance for sales is important, therefore, advertisement of product is tactful in holding up the existing market and expansion of market.
  • It significantly improves the manufacturer’s reputation for consumers by protecting the organizational management from adopting ineffective selling methods.
  • It develops brand image in the minds of potential customers.

Cons:

  • It requires high investment,resulting in increase in the product’s cost.
  • It confuses the customers, because after believing on advertisement they purchase the product and feel disappointed when the quality of the product is compromised.
  • The buyers get tangled in deciding which product to buy.

Alternative – Incentivize return

For the revival of business relationships with customers, offering a new deal is a great way. As personalized messaging is responsible to address motivation and bring back the interest of lost customers, who could be tempted for giving Coca Cola a chance to be reconsidered by them.

Pros:

  • This strategy will give rise to the growth of business sales and its profits,resulting in the increased motivation of the customers to buy more products.
  • It significantly keeps the product at top in consumers’ mind by establishing an emotional link between the consumer and the organization.
  • If consumers are aware of the reward in return, it will change the behavior of consumer in a positive manner promoting the growth of sales.

Cons:

  • The standard time fixation in implementing the incentive return plan is difficult with slow performance of workers.
  • As the employees are required to improve their speed at work in order to achieve additional wages, effective supervision is mandatory to protect the quality compromise.

Alternative – Secure Experience of customers

For the success of any brand, make sure to present yourself as trustworthy to the customers.

Pros:

  • Marketing as a concept of word of mouth is not a new technique. However, the goodwill of potential consumer range leads to the acquisition of more significant markets to target.
  • Engaging with the consumer’s response encourages the development of improved interactions and relationships i.e. mutually beneficial.
  • The trust of customers over a business tends to increase the communication as a feedback in the management of brand reputation, without any outrage of public.

Cons:

  • Little mistake from the provider of customer service can badly affect the reputation of the organization.
  • Companies focusing on the consumer service are more predisposed to spam feed backs due to the availability of open review page for all consumers.
  • As consumers are not sure about their actions performed, it requires strong manpower management and sufficient resources.
  • Some customer service can alternatively be delivered to the consumers as an accident,which could create a threat for the reputation of the organization.

Recommendation:

For the issues faced by Coca-Cola, it has sent its product samples to the British lab to test if the components of products are hazardous. As a result, it was concluded that the pesticide was found in the products, but the amount of pesticides traced in the products was harmless to the human health. Due to the allegations, the products’ sales were banned by the Indian government.

Therefore, from the alternatives mentioned above, the organization could try to advertise  its product to regain the trust of its customers due to which it has faced decline in the sales. On the other hand, Coca-Cola has also promised the Indian nation to return them with water it has used in the drinkable form i.e. free of contaminants. As a result of this negotiation with the consumers and the government of India, it has seen significant increase in sales and has regained its trust over its potential customers.

Conclusion:

To sum up, it is to conclude that Coca-Cola Company is a beverage manufacturing and selling organization which offers about five hundred brands in around 200 countries, throughout the world. Due to an extensive use of blotting plants in Kerala, India, ground and fresh water reservoirs have been contaminated with the increasing concern of water scarcity for irrigation purposes and loss of livelihood.  Water depletion has become a serious matter of concern for the people of India. The extensive use of water and hazardous chemicals being used in their products were two main accusations by the Indian nation on Coca Cola. Due to this reason, the sales of Coca-Cola was badly decreased and allegations were made on the organization due to rising concern of health of the people who drink that polluted water.The organization has tried to advertise about its product to regain the trust of its customers. The loss of its customer’s trust was the main reason due to which it has faced decline in the sales. Also, Coca-Cola has promised the Indian nation to return them with water it has used in the drinkable form i.e. free of contaminants. As a result of this negotiation with the consumers as well as the government of India, the sales of Coca Cola has been observed to have an increase and it seems that Coca Cola has taken some steps for the attempt of regaining the lost trust of its customers, which has proved to be quiet successful.

Exhibits

Exhibit – SWOT Analysis

Strength Weakness
·         Well-reputed brand and strong geographic mix

·         Significant financial muscle

·         Advancement in technological processes

·         Sales potentially from outside developed market

·         Lack of knowledge about Indian culture

·         Exploitation of water and resource

·         Contaminated products with hazardous chemicals

·         Complete reliance on use of carbonates

·         Excessive sugar content

OpportunitiesThreats
·         Increased consumer demand

·         Good opportunities for sale in India and China

·         Focus on juice and bottle products

·         Health concern and loss of livelihood

·         Threat of substitute

·         Carbonates with low calorie

·         Strong competition

Exhibit – Porter’s Five Forces

Exhibit - Alternative:

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