Coca Cola case study Essay

Executive Summary
Coca Cola is a soft drinks giant and the world’s number one brand. This case study involves the problem faced by soft drinks giant, Coca Cola in the year 1999. The soft drinks giant was blamed for illnesses of 249 people in Belgium and France after consumption of their product, Coke. The case study involves details about the health scare that took place in Belgium and how the software giant dealt with the crisis. It also analyses how Coca Cola reacted to the problem and dealt with it.

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Problem Identification
On June 8 1999, 30 schoolchildren in Belgium became ill after drinking Coca Cola from cans. They complained of nausea and dizziness from drinking Coke in cans and the children were hospitalized.

In a matter of days, 249 people in Belgium became ill and complained of stomach pains, nausea and hyperventilation. The fears spread to other countries in the European Union and customers in Portugal complained of finding a black residue in the Coca Cola cans.

The products were banned in Belgium and other European countries and many of Coke’s related products were taken off shop shelves. This was the biggest product recall in the company’s 113-year-old history.

Initial test results were clear with no problems identified. Analysis of samples taken from the Coke cans came up with negative results and there seemed to be no basis for the symptoms experienced by the consumers. After several tests, Coke’s French unit said that a disinfectant sprayed on pallets used to ship the drinks were the cause of illness. They traced the problem to bottling units in France where the carbon dioxide gas used was contaminated.

Generation and Evaluation of Solutions

When the problem began, Coca Cola’s first reaction was to minimize the report of illness. The company officials were slow to respond. The company had damage control plans but none that could handle this scenario, which was the worst-case scenario. Despite the health risks, the soft drinks cans were taken away from the school premises, where the problem was first identified, only two days later. In one instant, the officials could not get to the Coke cans as the machine was in the basement and it was the weekend. Here it shows that Coke did not really have a back up plan.

When the children were hospitalized, the government got involved as the Belgian elections were just two days away. The government started taking action before the company did. They set up a call centre to clarify questions about Coke and the products were removed from all schools. This was something that Coke should have done as soon as it realized the gravity of the situation.

Coca Cola was resolute to the fact that its products were not bad and refused to take any action until an analysis of its cans was made. It even mentioned that it could have been a case of food poisoning and its products were not to blame. This shows that Coke was not willing to take any responsibility.

It was a week after the incident had happened, that Coca Cola issued an apology to their consumers.

Around June 21, 13 days after the incident happened, Coca Cola admitted that they had made a mistake. They issued full-page newspaper advertisements in French newspapers asserting the safety of Coke products and listing a toll free number for people to call regarding any safety questions. Coke also circulated a toxicologist’s report, which concluded that though there were contaminants, it was in small amounts, and could not have caused the symptoms reported by the consumers. When Coke realized that the consumers were not convinced, it ran an advertisement with a more contrite apology. The next day, Belgium lifted the ban on Coke’s bottled and canned soft drinks with conditions that it will have tighter quality controls.

Recommendations
An analysis of the case study reveals that Coke could have acted faster and set up call centers to answer questions from the consumers. This would have eliminated the rumors that spread due to its silence over the issue.

A caution issued to neighboring countries could have stopped the damage spreading further than Belgium. In addition to this, Coke could have been more transparent in its analysis of the product and made the details available to the public. This would have further increased the trust of the consumers in the company. When the company blamed food poisoning and “psychomatic illness” as potential causes for the symptoms, it further alienated itself from its consumers. Instead, Coke could have provided its research reports, claimed that the officials were still looking into it, and voluntarily withdrawn its products. This would have done the damage control that it needed and increased the confidence of the consumers.

It took the company three days to react to the problem and the products could have been withdrawn on the same or the next day and consumers informed. Lack of information to the consumers causes widespread scare that further damaged the company’s reputation. The local authorities acted faster than the company did while the company blamed external sources as causes for the illness.

Overall, the company should have had a damage control in place for such situations and the company officials’ response could have been faster. Because of its lack of preparation in such situations, Coke lost $3.4 million each day of the ban.

List of References

Hays L.C. ‘A Sputter in the Coke Machine; When Its Customers Fell Ill, a Master Marketer         Faltered’,  June 30, 1999,Viewed April 16, 2007,         http://query.nytimes.com/gst/fullpage.html?sec=health&res=9A03E3D81F3AF933A0   5755C0A96F958260&n=Top%2fReference%2fTimes%20Topics%2fPeople%2fI%2f            Ivester%2c%20M%2e%20Douglas

Hays L.C. ‘The World; Coca Cola Hopes Things Will Go Better With Sorry’, June 27, 1999,        Viewed April 16, 2007,         http://query.nytimes.com/gst/fullpage.html?sec=health&res=9806E4D6153AF934A1            5755C0A96F958260&n=Top%2fReference%2fTimes%20Topics%2fPeople%2fI%2f    Ivester%2c%20M%2e%20Douglas

New York Times, ‘France keeps up Coca Cola Ban’, June 21, 1999, Viewed April 16, 2007,            http://query.nytimes.com/gst/fullpage.html?sec=health&res=9C00E5D6133BF932A1            5755C0A96F958260

Tyler R,’Legal action over dioxin poisoning in Belgium’, June 19, 1999, Viewed April 16,           2007,            http://www.wsws.org/articles/1999/jun1999/bel-j19.shtml

Whitney C.R, ‘International Business: Mixed day for Coca Cola in European       Illness Scare’, . June 23, 1999, Viewed April 16, 2007,           http://query.nytimes.com/gst/fullpage.html?res=9F01E7D61E3BF930A15755C0A96    F958260&sec=health&spon=&pagewanted=1

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