Coca Cola Amatil's Crisis Management: A Case Study

The provided content is about the controversy faced by Coca Cola Amatil due to high amounts of caffeine in their products, which led to negative effects on the body. The company's Minute Maid division was also involved in labeling mistakes, resulting in a decline in sales and profit generation. The organization's environmental impact was criticized, leading to bad reputation among customers. Additionally, the company faced difficulties competing with rival companies like PepsiCo and Nestle.

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Table of Contents
Introduction......................................................................................................................................3
Task 1: application of corporate strategies for growth and development........................................3
Task 2: Two business practices.......................................................................................................5
Task 3: Environmental analysis.......................................................................................................6
SWOT analysis............................................................................................................................6
PESTEL analysis..........................................................................................................................7
Task 4: organisational culture or leadership style...........................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The report is prepared to focus on the concept of strategic development within the
organization Coca Cola Amatil, which is one of the most popular and established bottler of non-
alcoholic ready to drink beverages for the customers. The business organization manages its
operates in more than 6 countries and serves more than five major bottlers of Coca Cola. The
business organization works across a diverse range of businesses to deliver the best quality
manufacturing, production and sales services for fulfilling the needs and requirements of the
customers and keep them satisfied. The company has more than 14,000 employees who work as
a team to develop strategies and benefit the shareholders along with gaining better profit in
business (Aithal 2016).
Task 1: application of corporate strategies for growth and development
The Contingency approach is applied by Coca Cola Amatil to define that there are no
such universal management principles and ensure management of procedures according to
various situations and conditions from the marketing context. This approach also made the
organization to focus on a particular situation, assess it and then us the most suitable approach
and leadership style to manage the business operations properly. One such contingency approach
could be the evaluation of business plan, predicted performances for improving the generated
revenue, and determine the competitive position of the organization in the market as well (Al-
Najem, Dhakal and Bennett 2012).
The vertical growth strategy has allowed Coca Cola to operate on a local scale and
develop a global reach by bonding with many bottling partners all over the world. The supply

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chain of the organization has been owned and managed under a common ownership, that has
further helped in managing the business processes with ease and effectiveness. This would allow
the company to create global reach and ensure growth and expansion of business efficiently. The
horizontal growth strategy has allowed Coca Cola Amatil to manage acquisition of smaller
companies and equipments for controlling the increased sales volume and develop a sense of
ownership and control. The horizontal growth strategy has also enabled the company to maintain
its leadership within the soft drink industry by serving more customers from time to time
(Stensaker and Vabø 2013). The productivity has increased along with better profit level and
competitive advantage in business too.
The generic strategies of Porter are cost leadership, differentiation and focus strategy.
The differentiation strategy allows for using unique marketing and advertisements for creating
positive mindset among customers and influences their buying behavior. The focus strategy of
Coca Cola allows for creating the cost along with focus on differentiation of products to serve
the niche marketing segments. The cost leadership is the most effective strategy for Coca Cola
because it has helped to position its products at a much reasonable price than its competitors by
reducing the production cost largely (Weske 2012). The operating expenses are administered
properly and even the flow of cash that has increased the production level and benefited the
customers by keeping cost of operations lower and fulfilling the demands and preferences of
customers.
Coca Cola Amatil has partnered with McDonalds to cater the needs of people, because
the soft drinks go well with the snacks and other food items that are mainly offered by
companies like McDonalds. The company serves public causes and has partnered with NGOs

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and many other water recycling companies to advance water stewardship and maintain water
sustainability.
One of the emergent strategies could be the use of segmented revenue growth strategies
to serve different market segments and focus on the increase in volume and sales. To maintain
sustainability and healthy business, continuous investments have been done for marketing
efficiently and share string bonds with the partners to attract more customers and create a
positive global presence, furthermore gain a positive brand image (Aithal 2016). This would
allow the company to increase its sale, generate more revenue and gain competitive advantage in
business.
Task 2: Two business practices
Though Coca Cola Amatil is one of the most established non-alcoholic soft drinks and
beverages brand , still it has been involved in various controversies. One such controversy
resulted during a trial where the Government of Australia seized multiple barrels of the soft
drinks because of the presence of the high amounts of caffeine that could create harmful effects
on body. This showed signs that the company had been misbranded. Coca Cola owns other
brands too such as Minute Maid, which was also part of the controversy. The Minute Maid
division of Coca Cola Amatil provided inappropriate labels for the product, i.e., a pomegranate
and blueberry juice, though it was made with most of apple and grape juices. This kind of wrong
labeling information was a mistake committed by the bottler company, which resulted in decline
of sales and profit generation (Al-Najem, Dhakal and Bennett 2012). It is a normal thing that the
packaging and bottling used for the products can create environmental impact to a certain extent.
The organization has opposed to this and did not make any further attempts to develop container

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deposit legislation. This further led to criticism in Australia in the year 2013 because of the
litigation undertaken by the company to create inappropriate ways of managing bottle recycling
deposit. The outcomes were quite negative because this created bad reputation of the company
among the customers’ minds and even resulted in reduction of sales and less profit in business.
The company also found it difficult to compete with the rival companies such as PepsiCo,
Nestle, etc (Stensaker and Vabø 2013).
The media journalists also left no stones unturned to make it a big issues and try out
anything to deteriorate the brand image and name. The employees were also paid less wages due
to the decline in sale and profit generation. The industry experts and academic professionals also
provided their opinions and responses regarding these controversies, which grabbed the attention
of many people and it spread among people all over the place.
Task 3: Environmental analysis
The environmental analysis of Coca Cola Amatil has been done with the use of SWOT
analysis, PESTEL analysis and even understands the market forces with the help of Porter’s five
forces analysis technique (Weske 2012).
SWOT analysis
Strengths
Coca Cola Amatil is one of the largest bottler of soft drinks in Australia which serves in
more than 6 countries worldwide. It has the largest shares in the beverage and soft drinks
industry and has managed its marketing techniques trough advertisements where well known
celebrities promoted the brand along with sponsoring of World cup and English premier league
games too. This has created loyal customers.

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Weaknesses
The production of carbonated soft drinks is often considered as creating negative health
impact. The products are not diversified properly and thus focus is more on only the beverage
products (Aithal 2016).
Opportunities
The demands of beverages are huge and it has been increasing consistently, thereby
giving enough scopes for Coca Cola to manage the bottling of products.
Threats
Scarcity of drinking water in the future along with high competition from other beverage
companies like PepsiCo and Nestle are major threats faced by Coca Cola.
PESTEL analysis
Political factors
The Government has implemented laws, rules and regulations that have been maintained
by the organization to manage the products properly. The changes in labor laws can also affect
the functioning of the business (Stensaker and Vabø 2013).
Economic
The products of Coca Cola are provided to various countries with different customs,
cultures, preferences of consumers. The company has accommodated to these customers by
changing according to their needs and preferences.
Social

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Customers nowadays have become aware of health issues like diabetes and obesity,
which can be caused by drinking carbonated beverages. Then organization has experienced
reduction in sales due to decreased demands for carbonated beverages. To cope up with the
social demands and consumer behavior changes, Coca Cola Amatil has introduced products like
Minute maid juices and energy sports drinks like Powerade that contain less amount of caffeine
(Weske 2012).
Technological
The technological advancements have allowed Coca Cola to enhance the efficiency of
marketing and production and even involved social media for advertising and grab attention of
many customers,
Environmental
Due to scarcity of water and environmental condition changes, there might be lesser
production of soft drinks. The company needs to follow the environmental laws for sustaining in
the marketplace.
Legal
All the rights and responsibilities are retained by Coca Cola Amatil and these have been
managed with proper patented process. The legal rules are followed to ensure that the company
meets up to the standards of quality of the organization (Aithal 2016).

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Task 4: organisational culture or leadership style
The company manages an inclusive culture that has been defined by the major values
such as leadership, passion, integrity, collaboration, diversity, quality and accountability. This
has helped in creating a diversified culture where every people can work as an unit and deliver
the best outcomes, furthermore create a healthy workplace culture where people can
communicate and work as an unit to enhance the production level. The leadership style
maintained within the organization is democratic leadership style and every responses and
opinions of the employees are considered by the leader before making any business decision (Al-
Najem, Dhakal and Bennett 2012). This has made the employees feel valuable as well as allowed
them to perform to their potential as well.
Conclusion
The topic illustrated about the management of business operations and processes within
the organization Coca Cola Amatil. The external and internal environment have been analyzed
with the help of SWOT, PEST analysis for understanding the strengths, areas of weaknesses and
find opportunities to sustain within the business environment. The application of growth
strategies had been done along with defining the best two management approaches. The
diversified inclusive culture was maintained along with the democratic leadership style to
maintain a healthy workforce and enhance the potential of the organizational workforce too.

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References
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. Browser Download This Paper.
Al-Najem, M., Dhakal, H. and Bennett, N., 2012. The role of culture and leadership in lean
transformation: a review and assessment model. International Journal of Lean Thinking, 3(1),
pp.119-138.
Stensaker, B. and Vabø, A., 2013. Re‐inventing shared governance: Implications for
organisational culture and institutional leadership. Higher Education Quarterly, 67(3), pp.256-
274.
Weske, M., 2012. Business process management architectures. In Business Process
Management (pp. 333-371). Springer Berlin Heidelberg.