The term ‘crisis’ has been conceptualized as a major catastrophe that may occur either naturally or as a result of human error, intervention, or even malicious intent (Coombs & Holladay, 2012). Aside from an individual, a wide array of companies and organization are vulnerable to crises. An organization is more so likely to face huge financial losses in cases where it fails to manage some of its crises. In addition, the reputation of the organization is always at stake as the general public pays keen concentration on ways through which the organization may tackle the challenges resulting from the specific different crises. Coca-Cola is one of the most renowned companies that have faced its own share of controversies. As a well-recognized multinational company, Coca-Cola suffered a devastating blow in the year 2003, after India’s Center for Science and Environment revealed of some of the Coca-Cola brands having toxic pesticide compounds (Coombs & Holladay, 2012). This crisis threatened the mere existence of Coca-Cola Company in India, as the company’s brand and reputation were at stake.
- What are the key problems that Gupta should focus on in the short-term and in the long-term?
Gupta ought to focus on investigating the said allegations whilst also addressing the public’s concern towards its products. Certainly, the general public is the backbone of the company as a vast majority of them are also the customers. For Coca-Cola to maintain the trust and loyalty of their customers, Gupta should reassure the public that the company seeks to steadily handle the crisis and that their concerns are not taken for granted. In addition, the company should inform its shareholders and explain to them the company’s resolution plan. In the long-run, the company should strategize on creating a robust crisis department constituting of erudite and skillful personnel whose responsibility will be to amicably provide stellar solutions to any crisis befalling the company.
- How would you evaluate the crisis?
The crisis negatively affected the company after Gupta refuted all the claims. Most of the customers reacted impulsively after the publicized allegations of Coca-Cola products containing poisonous pesticide contents (Coombs & Holladay, 2012). The Company recorded a huge loss as the sales dropped by approximately 10% within a period of 2 weeks (Coombs & Holladay, 2012). In addition, Parliament banned the sale of Coca-Cola’s products as schools, restaurants and shops stopped selling the Coca-Cola’s soft drinks. This all happened as the Company failed to maintain open communication with its major stakeholders such as the media and the general public.
- How well prepared was Coke India to deal with CSE’s allegations?
Certainly, Coca-Cola was not fully prepared to manage this crisis as it had been caught by surprise. This was depicted by how it defended itself from the said allegations. This was not the first time it had faced such allegations as it had been formerly attacked for selling contaminated bottled water. Furthermore, Coca-Cola refuted the toxins allegations as it even questioned CSE’s credibility. Its fast-paced reaction was clearly not well planned as the public eventually lost confidence and trust on the Company’s products.
- What is your recommendation for Coke’s communication strategy? Who are the key constituents?
The company should openly communicate the truth to prevent any negative consequences that would eventually affect its customers. In doing so, the company would be showing care and concern to its customers. In addition, the company should strategize on how they would regain the trust and loyalty from the media, government and its customers. This can only be done by reassuring the stakeholders of a solution to resolve the crisis.
- Would Coke India have avoided this crisis?
I believe that Coke India would have avoided this crisis as this was its second time to face such allegations. It first crisis was with regards to its contaminated bottled water that had already been distributed within India (Coombs & Holladay, 2012). Coke should have therefore come up with a solid and most effective solution that would have helped in avoiding any future contamination problems. However, it was just a matter of time for the same contamination problem to reoccur as Coke failed to issue a lasting resolution to its first crisis on contaminated bottled water. To add to this, Coke should have investigated on CSE’s allegations instead of speedily refuting the claims.
- What should Gupta do now?
Since both CSE and Coke have the best interest of the general public, they should have worked together to investigate if indeed the Coke products were contaminated and the toxin content levels. This would have helped Coke to prudently address the issue whilst also coming up with a positive and effective resolution to the crisis. Coke should also learn to respond to such expected crisis with the objective of retaining and maintaining the trust of its stakeholders.
Coombs, W. T., & Holladay, S. J. (2012). The handbook of crisis communication. Chichester, U.K: Wiley-Blackwell.