Decision Making at Coca-Cola - Case Study Example

By investing in sport sponsorship the Coke receives both economic/financial and psychological benefits. While the company is actively using sponsorship as a marketing and promotion tool, Coca-Cola’s market capitalization has decreased significantly after the death of its CEO, Roberto Coizueta in 1997. While in 2014 market capitalization of the Coca-Cola Company is 183, 99 billion dollars, the Coca-Cola Company has a weaker financial position than it had 17 years ago. Question One: a) What are the key values at Coca-Cola?

Coca-Cola has 7 key values, including the following: leadership, collaboration, integrity, accountability, passion, diversity, and quality (The Coca-Cola Company, n.d.). b) What do these values reveal about the Coca-Cola company?These values indicate that Coca-Cola Company is an organization aiming to maintain a leadership position and also is striving to “shape a better future” (The Coca-Cola Company, n.d., n.p.). Collaboration value means that the company is focused on people and teamwork.

By combining efforts and human resources the company leverages collective genius (The Coca-Cola Company, n.d., n.p.). The company is also promoting the corporate spirit and passion among its employees to the brand. The value of diversity stresses that the company is operating globally, and diversity at the workplace and diversity of brands are two integral parts of the business. Also, the value of quality reveals that the company focuses not only on the production of high-quality products but also on everything they do.

Question two: Coke sponsors many sporting events, such as World Cup Soccer, the NFL, the Tour de France, Rugby World and the Olympics.a) Why is Coke so involved in sponsoring such events? Coca-Cola Company is involved in the sponsorship of mega sports events such as the Olympic Games, The Rugby World Cup, the NFL, the Tour de France or Formula 1 for a quite long period of time (Nufer & Buhler 2010). Global sports events such as the Olympics and Rugby World attract people from all over the world and generate the target audience, which Coca-Cola Company is trying to reach, and establish in the minds of these people association of the sporting event with the brand of the company (Nufer & Buhler 2010).

 Therefore, the company uses such events as marketing tools which enable it to improve the image and increase awareness of the company (Nufer & Buhler 2010). Sponsoring big and attractive sporting events enables Coca-Cola to minimize the risk of negative image transfer (Nufer & Buhler 2010, 306). By sponsoring such attractive sporting events the company can reach their target audience in a more effective way than by using traditional advertising and promotional channels. a) What benefits do you think Coke receives from these sponsorships?

By investing in sport sponsorship the Coke receives a multitude of benefits. These benefits can be differentiated by two aspects economic and psychological. Economic benefits imply financial or monetary benefits, such as profit and/or turnover increase. Psychological benefits imply increased awareness levels, brand recognition, staff motivation, brand positioning, sales increase, etc. (Nufer & Buhler 2010). Question three: a) Who is the current CEO of the Coca-Cola Company?The current Chief Executive Officer of the Coca-Cola Company is Muhtar Kent.

In addition to this position, he is the Chairman of the Board of the Coca-Cola Company (The Coca-Cola Company, n.d.). b) How has the company’s market evaluation, pegged at 180 billion dollars in 1997, changed?Coca-Cola has achieved its remarkable growth of business during the leadership of Roberto Coizueta, who was leading the company from 1980 to 1997 (Hess 2008). Thus, the company’s market capitalization has grown from $4, 3 billion to $180 billion dollars in 1997. This success was a result of the decisiveness of Roberto Goizueta who managed to turn the re-launch of the old formula of Coke into a Coke Classic into a marketing triumph (Case study, n.d.).

However, after the death of Coizueta in 1997, the company’s market evaluation has decreased to $115 billion (Hess 2008). As of September 2014, the market capitalization of the Coca-Cola Company is 183, 99 billion dollars (Ycharts.com, 2014). While in numerical terms the company’s market evaluation is slightly higher than it was in 1997, taking into consideration inflation and applying the principle of the present value of money, the Coca-Cola Company has a weaker financial position than it had 17 years ago.

ConclusionIn my opinion, the case analysis of such a global company as Coca-Cola was quite helpful and useful as it enabled me to apply some theoretical concepts to the real-life business. The case of Coca-Cola illustrates the importance of leadership and the decision-making process in the organization. Coca-Cola’s values set a direction for the company and help the company to differentiate itself among its key competitors such as Pepsi Co. Coca-Cola Company is actively participating in sponsoring global sports events, using sponsorship as a marketing tool.

However, the current market capitalization of the company indicates that these efforts are not enough and there should be a development that will help Coca-Cola to gain its market share. It is interesting to note that during the leadership of Roberto Coizueta the company has achieved significant growth. On one hand, it could be the result of his effective decision-making skills, on other hand, it could be attributed to less fierce competition on the market.