Case Study Analysis: Coca-Cola and Sainsbury

Bus 150 Fall 2011

Coca-Cola Look-Alike Creates a Problem in Britain

Coca Cola has been enjoying a 60% market share of the UK cola market. Sainsbury wanted a piece of that and has just introduced their own brand of cola to the market. The Sainsbury cola is packaged very similarly to the Coca Cola brand, and Coca Cola is concerned that there will be confusion in the marketplace.

Important Facts

Doug Daft Newish CEO (2000) 31 years with Coke Coke is a global business, operating in 200 countries 80% of companys profit from global profits (using 70% of its volume) Coke in Japan Coke competes in Japan where there are 7000 types of soft drinks in Japan, Coke has 25 brands and 60 flavours

More Important Facts

Coke in Britain the Sainsbury problem *Red & White cans * Cola written vertically on the can (Classic) *Shelf placement of Sainsbury product *Price of Sainsbury product (25% less) Legal Environment in Britain unfair competition not recognized under British law

Problem Statement

Sainsbury has produced a look alike product called Cola and has marketed the product alongside Coca Cola creating TWO problems:

1)

2)

Public confusion about which product is the real thing Potential erosion in market share for Coca Cola

SWOT
Strengths
*CEO 31 years with org and global business experience *Coca Cola is a successful product *80% of profits from global markets global industry leader

Weaknesses
*CEO still unproven in new job *Coke not ready with a response to Sainsbury action *Usual competitive strategies that are working around the world are not working at Sainsbury

SWOT (contd)
Opportunites
*Stop selling to Sainsbury and walk away *To continue to market Coke based on its strengths/successes and increase market share *To influence British Law unfair competition

Threats
*Market share erosion *Public perception of Coca Cola *Sainsbury product placement on shelf *Coke cannot sue no legislation *Sainsbury strategy could be adopted by other players if Coke doesnt do anything about situation

Objectives
1)

2)

To influence public perception by reducing the belief that Sainsburys Cola is the same drink as Coca Cola To create strategies that would protect Coca Colas global market share and position as the global soft drink leader, even in Britain

Potential Solutions/Alternatives

Do nothing Sue Sainsbury Design a new package Reduce price to compete Increase sales promotion Increase advertising Stop selling to Sainsbury

Conclusion/Recommendations

Arrive at a conclusion. Make your recommendation/s.