Coca-Cola’s Global Rethink

HARVARD BUSINESS ONLINE—Why do I think globaloney is potentially dangerous to your health rather than just a useful simplification or call to arms? Probably the best example I can think of was Coca-Cola, which a decade ago, in the waning days of CEO Roberto Goizueta’s reign, was acclaimed as the aggressively globalized corporation. Goizueta emphasized that the distinction between international and domestic no longer applied (which he embodied in organizational changes), set aggressively high growth targets, focused on a handful of megabrands to drive volume growth, and engaged in an unprecedented amount of centralization and standardization.

Ten years later, under CEO Neville Isdell, Coke has executed an about-face. Isdell has separated out the domestic and international organizations and cut growth targets by half, to the cheers of analysts who had come to regard the earlier ones as unrealistic. The emphasis now falls on variety, with particular push to learn from Japan, Coke’s most profitable major market and one in which it has a particularly broad array of products, ranging from best-selling Georgia Coffee to offerings such as Real Gold, a hangover cure, and Love Body, a tea that some believe increases bust sizes. And the emphasis on variety carries over from products to strategies: in China and India, in particular, Coke has lowered price points, reduced costs by indigenizing inputs and modernizing bottling operations, and upgraded logistics and distribution, especially in rural areas. Read article.