Coca Cola Case

9-711-504

REV: AUGUST 14, 2012

DAVID B. YOFFIE

RENEE KIM

Coca-Cola in 201 In Search o a Ne Mod

a

11: S

of

ew

del

Mu

uhtar Kent, CEO of The Coca-Cola Co

C

C

ompany (Cok breathed a sigh of rel

ke),

lief. On October 3,

2010, he had finally closed the la

y

argest acquisition in the co

ompany’s history: the $12 billion purch

hase of

ottler.

the North American operation of Coca-Co Enterprise (CCE), Co

N

ns

ola

es

oke’s largest franchised bo

With the acquisitio Coke now controlled approximatel 90% of its total North A

on,

w

ly

American vo

olume,

revers

sing its 1986 decision to separate itself from the bottl

d

f

ling business.  

.

Fo most of th last 125 years, Coke had manufac

or

he

y

h

ctured concen

ntrate and fo

ocused on dr

riving

dema

and and custo

omer loyalty through heav investmen in brand m

t

vy

nts

marketing. Th capital-inte

he

ensive

job of producing drinks, runni

f

d

ing trucks, an supervisin distributo mainly re

nd

ng

ors

esided with C

Coke’s

franch bottlers. This business model had served the co

hise

s

ompany well Coke had b

l.

become the w

world’s

f

larges soft-drink company, selling 1.7 billio servings of beverages e

st

c

on

every day to consumers in over

n

200 co

ountries thro

ough more th 300 bottling partners. Coke was co

han

onsidered the most recogn

e

nized,

powerful brand in the world, va

alued at $70 billion in 2010 1

b

0.

At the same tim Coke face several challenges in th U.S. marke which pro

t

me,

ed

he

et,

ompted Kent to rethink the strategy. Selling soda was no lon

.

as

nger enough to quench A

American con

nsumers’ thirs and

st

taste preferences. Carbonated soft drinks, which represe

p

C

s

w

ented 76% of Coke’s globa volume, ha lost

al

ad

ought

some of their fizz amid anti-ob

besity campaigns and acti lifestyle m

ive

movements. C

Consumers so

altern

native non-car

rbonated bev

verages, rangi from teas to coconut w

ing

s...