Coke Case Study

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Register to read the introduction… Pepsi focused on young customers who have not yet formed spending habits and rely on Coca-Cola. In 1985, Pepsi's market share has reached 17.8% and Coca-Cola’s is 22% (Schindler, 1992). The leading position of Coca-Cola Company in the beverage market suffered the most serious challenge. After conducting a series of market research, Coca-Cola was confident that it had sufficient information displaying the new cola would be more popular than the old Coke and Pepsi cola (Greising, 1998). On April 23, 1985, New Coke officially came onto the market. Coca-Cola held a most significant conference declaring New Coke would replace the old one in the market. Within four hours of the publishing of New Coke, Coca-Cola Company received 650 calls protesting changes to the tastes (Pierce, 1987). After three months since its launching, sales of New Coke were still lackluster and public protests have intensified. On July 11, 1985, Coca-Cola was forced to resume the old traditional formula of Coca-Cola and named as the classic Coca-Cola, sold with New Coke together (Pierce, 1987). To the end of 1985, sales of the classic Coke greatly exceeded the New Coke; New Coke occupied only 2% of the market share (Greising, 1998). New Coke never won market share in the true meaning. New York Times reviewed that the innovation of Coca-Cola, New Coke, was one of the most significant mistakes in American business …show more content…
However, public's reaction to this change was negative and the market did not welcome New Coke, which suggested that New Coke was a failure for the company (Imram, 1999). Innovation requires certain external and internal environmental conditions (Amit, Zott & Pearson, 2012). In Coca-Cola's New Coke innovation, there are two issues that significantly affect the results.

The first factor is the determination of entrepreneurs. As the head of Coca-Cola Company, Robert Goizueta was committed to reform and bravely face competitive challenges of Pepsi and opposition inside the company and launched the innovation. However, overconfidence of entrepreneurs might lead to blind investment and being lost in their own determination (Greising, 1998). When entrepreneurs are so deeply addicted to their own ambitions of innovation, they tend to ignore warnings and objections, which might lead to the inevitable failure of the innovation (Greising,

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