Change Management Failure - Strategy in Terms of New Coke - Management Assignment Help

Assignment Task :

NEW COKE: A CLASSIC BRAND FAILURE 

Think of a brand success story, and you may think of Coca-Cola. Indeed, with nearly one billion Coca- Cola drinks sold every day, it is the world’s most recognised brand. Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace it with a formula it would market as New Coke. To understand why this potentially disastrous decision was made, it is necessary to appreciate what was happening in the soft drinks marketplace. 

In particular, we must take a closer look at the growing competition between Coca-Cola and Pepsi Cola in the decades prior to the launch of New Coke. The relationship between the archrivals had not been a healthy one. Although marketing experts have believed for a long time that the competition between the two companies had made consumers cola conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola company had even fought Pepsi Cola in a legal battle over the use of the word ‘cola’ in its name and lost. Outside the courts though, Coca-Cola had always been ahead. 

Shortly after World War II, Time Magazine was already celebrating Coke’s ‘peaceful near conquest of the world.’ In the late 1950’s, Coke outsold Pepsi by a ratio of more than 5 to1. However, during the next decade Pepsi repositioned itself as a youth brand. This strategy was a risky one as it meant sacrificing its older customers to Coca-Cola, but ultimately it proved successful. By narrowing its focus, Pepsi was able to position it brand against the old and classic image of its competitor. As it became increasingly seen as ‘the drink of the youth’ Pepsi managed to narrow the gap. 

In the 1970’s, Coke’s chief rival raised the stakes even further by introducing the Pepsi Challenge – testing consumers blind on the difference between its own brand and ‘the real thing.’ To the horror of Coca-Cola’s long standing company president, Robert Woodruff, most of those who participated preferred Pepsi’s sweeter formula. In the 1980’s Pepsi continued its offensive, taking the Pepsi Challenge around the globe and heralding the arrival of the ‘Pepsi Generation.’ 

QUESTION 1 

1.1 Change within an organisation depends on three main dimensions. Discuss these dimensions, and identify and discuss which types of organisational changes were applicable to Coca-Cola in their efforts to introduce ‘New Coke’. Substantiate your choices. 

1.2 If you were the Change Manager at Coca-Cola, please identify and describe the change strategy(ies) you would implement to make New Coke a success. It is imperative that you do further reading on the strategy(ies) of your choice and that you provide practical application of your strategy in terms of New Coke. 

1.3 New Coke was a failure. With reference to the case study and New Coke in particular, discuss: 

1.3.1 The factors that could have made the change to New Coke a success (10) 

1.3.2 The factors that lead to change management failure (10) and 

1.3.3 The organisational resistance factors that might have impacted on the success of New Coke (10) and 

1.3.4 The individual resistance (10) to changing to New Coke.