coca-cola vietnam case study

1. LLOYD Business School
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Case Study Assignment:CSR Initiative by Coca-Cola
Company Introduction-
The Coca-Cola Company is the world’s leading beverage company and perhaps the most recognized brand name
in the world. Operating in 200 counties with a diverse product range consisting of an astounding 500 brands and
3,300+ beverages, the company considers the “Coca-Cola” name itself worth billions of dollars. Protecting its
brand image and reputation, therefore, is a key priority for Coca-Cola management. Coca-Cola’s mission is stated
simply as “At the Coca-Cola Company, we strive to refresh the world, inspire moments of optimism and
happiness, create value and make a difference”. Coca-Cola’s vision: “serves as the framework for our Roadmap
and guides every aspect of our business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth:
 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's
desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring
value.
 Planet: Be a responsible citizen that makes a difference by helping build and support sustainable
communities.
 Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.”
Coca-Cola has been in business 124 years and has returned increasing dividends to its stock holders for the past
48 years, clearly demonstrating its longevity and its effectiveness as a profit-making company. Coca-Cola, which
left Vietnam in the final phase of the war in Vietnam, returned in 1994 and has invested over US $200 million
with bottling plants in Ha Tay (near Hanoi), Da Nang and Ho Chi Minh City. It has also committed to investing
an additional US $200 million by 2012. It conducts business in Vietnam under the Coca-Cola brand name and a
joint venture with its bottlers through Coca-Cola Beverages Vietnam Ltd. Coca-Cola products in Vietnam include
as Coca-Cola, Sprite, Fanta, Diet Coke, Schweppes, Minute Maid Splash juice, Joy bottled drinking water and
Samurai energy drink.
Case Description-
In 2007, The Coca-Cola Company became the first multinational corporation to set a goal to return to communities
and to nature an amount of water equivalent to that which is used in all of Coca-Cola’s products and
their production. This means reducing the amount of water used to produce their beverages, recycling water used
for manufacturing processes so it can be returned safely to the environment, and replenishing water in
communities and nature through locally relevant projects. Coca-Cola’s dozens of bottling plants across the South
and Southeast Asian regions are part of these efforts, which include improving water efficiency in the plants by
20 percent by 2012. Two major factors motivated Coca-Cola’s ambitious conservation aim.

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First, water is the lifeblood of Coca-Cola’s business and the foundation of sustainable communities and
ecosystems. Coca-Cola recognized that it cannot have a healthy and growing business unless the communities it
serves are sustainable themselves. Coca-Cola’s water stewardship strategy incorporates four core focus areas:
Plant Performance; Watershed Protection; Community
Water Initiatives; and Global Awareness and Action.
Over the past decade, Coca-Cola has greatly increased its understanding of the many water issues the world faces
and the link to the markets and business. Water stewardship is currently and for the foreseeable future the main
sustainability focus of Coca-Cola.
The second motivation for the water goal was the outcome of a 2005 global risk assessment that Coca-Cola
undertook. The assessment showed that climate change would increase water scarcity, social problems, and
economic setbacks for the company. Coca-Cola concluded that water scarcity presents one of the biggest
challenges to their operations and decided to embark on a process of internal improvements and engagement with
local communities to help conserve water resources for all uses.
Reason to choose Coca-Cola Vietnam to work on water project-
Coca Cola is a beverage company, a major consumer of water resources, it uses 2.43 liters of water to produce
just 1 liter of beverage which makes it prone to criticism and consumer boycotts so to protects its brand image
and defend its vision statement, which said be a responsible citizen, and run its business smoothly it decided to
start water program to maintain its operations in Vietnam and build a CSR reputation.
Risk to Coca-Cola’s reputation in using too much water and producing waste water-
As Coca Cola uses too much water, it uses 2.43 liters of water to produce just 1 liter of beverage, and produces
waste water in the manufacturing process that is condemn by environment and community activist for lessen the
water supplies and destroying the environment through waste water it is a risk to Coca Cola reputation as it work
globally as a CSR company and its strong brand imagining.
Coca-Cola’s community based projects help them promote their business interest-
Coca Cola demonstrate itself as a profit-making company and a global company with a highly institutionalized
CSR program and has a positive brand image because of its community based projects and it helps it to run its
business. As according to the company publication Relish Report, the motives for replenish the water is for
sustainable and suitable communities because it is the foundation of the business and it support to enhance
business interests. Further its water stewardship strategy involves plant performance, watershed protection,
sustainable communities and helping to raise awareness all things work as a catalyst in promoting business
interests.
Coca-Cola’s stakeholders in Vietnam-
Coca-Cola’s stakeholders in Vietnam are local rural Communities, environmental activists, international NGOs
like World Wildlife Fund, CEFACOM and different local NGOs. In addition, Duyen Thai People’s Committee
and local Government health officials are other key stake holders. However, Coca-Cola in Vietnam lacks an
employee volunteer component a key stakeholder which should be involve in Vietnam community projects which
is the major part of strategy in the other part of the world.

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Risk for Coca-Cola in using its NGO partners as a key means to reach out to local communities-
The NGOs running the program on behalf of Coca-Cola do most of the interaction with the local communities
and it utilized its NGOs to learn about their specific needs and target assistance where it was most needed. It does
not reach out the local communities it-self and primarily focused on the outputs of the programming, such as the
number of communities students served and it measures whether the NGO partner meets the timeline, budget
targets and amount spent per beneficiary reached. The risk is there that Coca Cola might not be having the true
information as it is using NGOs as middle man. The true needs might be ignored and not properly addressed by
the NGOs.
Measures taken by Coca-Cola to improve its community programming-
Coca has developed a comprehensive CSR community programming which covers education, health care and the
environment projects. However, in Vietnam a key stakeholder, employee volunteer component, is missing which
is important for the improvement of community programming. Further, Coca Cola is using NGOs to interact with
the communities but it has a risk that coca cola might not be able to have true information and the some needs of
community might not be properly addressed. Hence, Coca Cola should try to build direct relation with community
that to improve the quality of the community programming. In addition, if the quality and standard of community
programs would be same all over the world it will improve their functioning
Success of Sustainability through CSR Programming-
Coca-Cola focuses on sustainability in its CSR programming that how will the families and schools continue to
use the equipment after the project, including funds for repairs and maintenance. To address this issue Coca-Cola
has formed partnerships with local health officials to teach about protection and measurement of water system
safety. It has trained community and school officials on water systems maintenance and educated them about
water health. so, the communities will continue to receive the benefits of clean water after Coca-Cola support
comes to an end so that it move on to assist other communities in need.
Coca-Cola make its monitoring and evaluation provide information through various measure-
Coca Cola strategy is to use its CSR programming to make positive brand image and run its business successfully
as it believes that successful communities translate to successful businesses. In a letter to stakeholders in 2008,
Muhtar Kent, president and chief executive officer of Coca-Cola claim that the partnerships helps it to improve
its way of running business. Hence, Coca-Cola has invested heavily in monitoring and evaluating its projects and
results have been a more positive brand image, with positive press coverage. In September 2010 alone, one press
event on the launch of the clean water project in Lien Chieu District generated 13 positive press articles in local
papers.
Submitted by-
Navan Sodhi
PGDM HR