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Coca-Cola’s Groupthink Blunder in the 80’s
We learned about the phenomenon of Groupthink, which is a group usually makes decisions that are proven disastrous and in hindsight people agree that it is flawed from the onset. Groupthink as we have learned can happen anywhere from being with friends which we call peer pressure, to companies, corporations and especially government institutions. For our learning journal assignment, we have to find and read or own examples of groupthink disasters and the one that came to mind to me was Coca-Cola’s changing of the Coca-Cola’s recipe in the 80’s. The question that popped in my mind is, is that an example of groupthink decision making?
Coca-Cola’s New Coke
Coca-Cola was still the market leader in the
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The first sign that Coca-Cola’s executives had of groupthink symptom is they bought into the believe that people not picking their product over Pepsi’s is that there is something wrong with Coca-Cola and therefore need to be change somehow, so in the beginning they already made a collective rationalization that they need to change their product. The second symptom they have was they had the illusion of invulnerability, because they spend so much money on research to find a new formula of Coke that beat Pepsi in blind taste tests. The third symptoms of course is that they stereotyped their own loyal customers and that they will accept anything just because it has Coca-Cola written on it. The other symptoms of groupthink could possibly be in play also like self-censorship, direct pressure on dissenters, illusion of unanimity and self-appointed mindguards, I’m sure at least one person somewhere thought or even said changing our product was a bad idea but self-censored or shut up because of pressure and or how pressure from the top to find a new formula caused the researcher to find something new and ignore the people that said they find the old coke just fine thereby being mindguard. In …show more content…
By the leader and or leaders not stating that they need a new formula, members would have probably come up with ideas such as introducing a new product instead tailored to Pepsi drinkers taste and not tinker with a winning product already. They definitely should have used a devil’s advocate to argue why their changing the formula was a bad idea, I’m sure the point of what about the current Coca-Cola’s consumers that already like and drink Coke would have come up. The most important thing was of course that they should have considered their already loyal consumers views, and not have focused so much on winning such a narrow group of Pepsi consumers, better research through surveys of their loyal customers should have revealed their feelings about a change in their beloved product and that the customer is king and not the executives when it comes to success or failure of a
Pepsi needed a strong regional partner. Pepsi had been falling behind to Coke in Mexican market. However, changes in the regulatory environment had cut Coke’...
The topic of this paper is Irving Janis’s concept of groupthink. There has been an increase in the utilization of groups or teams of people who come together in the decision-making process. There are many benefits to group decision-making with each member brings their own perspectives, beliefs, and ideas to the table. However, there are also negative dynamics such as groupthink that can hinder this process. Groupthink can lead to members believing that their opinions don’t hold as much weight as their peers, a group becoming overconfident in their knowledge of what is right, and the minimization of threats. Lack of thorough analysis of all available options or opportunities can have costly and long reaching negative consequences. Proactive
There are eight symptoms of groupthink. The first symptom is when all or most of the group view themselves as invincible which causes them to make decisions that may be risky. The group has an enormous amount of confidence and authority in their decisions as well as in themselves. They see themselves collectively better in all ways than any other group and they believe the event will go well not because of what it is, but because they are involved. The second symptom is the belief of the group that they are moral and upstanding, which leads the group to ignore the ethical or moral consequences of the decisions. The group engages in a total overestimation of its morality. There is never any question that the group is not doing the right thing, they just act. The disregarding of information or warnings that may lead to changes in past policy is the third symptom. Even if there is considerable evidence against their standpoint, they see no problems with their plan. Stereotyping of enemy leaders or others as weak or stupid is the fourth symptom. This symptom leads to close-mindedness to other individuals and their opinions. The fifth symptom is the self-censorship of an individual causing him to overlook his doubts. A group member basically keeps his mouth shut so the group can continue in harmony. Symptom number six refers to the illusion of unanimity; going along with the majority, and the assumption that silence signifies consent. Sometimes a group member who questions the rightness of the goals is pressured by others into concurring or agreeing, this is symptom number seven. The last symptom is the members that set themselves up as a buffer to protect the group from adverse information that may destroy their shared contentment regarding the group’s ...
One legal factor that I see is the Soft-drink Company guilty of false advertising. The company advertisement made an offer of Jet valued at 23 million dollars as a prize. Should Companies be able to use a misleading advertisement to increase financial interest in their Company. Another Legal factor to be considered was the advertisement considered to be an Express Contract. I have researched and use the school library and the internet I have developed and understanding of what is an Express contract. The one thing that I noticed is that an Express contract can be oral. Did the Company intentionally or unintentionally engage in an Express contract with his viewers with the offer of achieving a
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
Useem, M. (2008). New Ideas for This Pepsi Generation. (cover story). U.S. News & World Report, 145(12), 49.
Coca-Cola’s goal was to propel Coke to be the number one beverage in the market. In addition, the company looked towards diversifying their portfolio of offerings by introducing other lines of soft drinks. As competitors such as Pepsi infiltrated the market, Coca- Cola lost sight of their company’s objectives. Executives became immersed in other issues such as government allegations, syrup prices, ownership of company franchises and ignored the principle issues such as the marketing and sale of their product.
There are many different alternative ideas available to help Pepsi through this process. They should use input from their sales team, customers, and suppliers to help with new product ideas.
Since neither of the products created the measurable sales and market share increase Pepsi needed, PepsiCo International (PCI) executives conceived of a plan to create a new tagline and re-brand all existing Pepsi products, signage, advertising materials and in-store display units. The executives envisioned a simultaneous, global campaign that would create stronger brand equity and resonance in the consumer consciousness.
...e and Pepsi’s already established image as producers of premium product is key to discouraging other companies from entering the soft drink industry. However, as the market in the U.S has leveled off, they should continue to invest globally in marketing and advertising for further profit growth, which will in turn positively influence their well established brands to further increase soft drink sales and profits.
Weaknesses – Coca-Cola is a very successful company with an impeccable social media following. Word of mouth is probably a strength, but only when feedback from consumers is positive, but there are people who are against Coca-Cola and their products. Even though Coca-Cola produces over 200 brand products, Coca-Cola lacks the social media popularity of other brands that they produce (Moth, 2013). Many drinks that they produce are extremely popular such as Coke or Sprite, but there are a lot of Coca-Cola products that are unknown, unseen, and unavailable for
Coca-cola is the world’s biggest beverage company that manufacturers, retails, and markets nonalcoholic beverages. The company is headquartered at Atlanta, Georgia. The company was famed for its beverage Coca-cola which was invented in 1986. Coca-cola Company operates a franchise that distributes its products throughout the world. Its distribution chains and established territories have seen the company remain the most competitive beverage company in the world. At one point, Coca-cola was a monopoly in the world beverage market. However, there are various challenges that the company faces as it strives to maintain its exploits in the beverage industry. One of the challenges that are OD related is the accusations of worker intimidation throughout the world. The company has also been accused of seeking to stifle the operations of trade unions in the world. These issues are grave and have far reaching effects on Coca-Cola’s Organization Development. This essay examines this OD related problem and provides recommendations to this issue using the models and diagnostic instruments developed in previous O.D sessions.
Coca - Cola : Claims, Values and Polices Coca-Cola is a well-known and cherished brand name. When people think of this name, memories tend to overflow in their heads. Why do you need to be a member? Because, not only does Coke taste great and refresh your own personal memories, it also fills you with memories of the Coca-Cola like "Always Coca-Cola", the antics of the Coke polar bears, and all of the different ads that have represented Coke over the years. Just about every ad you see, as a consumer, has tons of hidden meanings.
Learning from experience Coca-Cola has had some fierce competition over the years but nothing in the form of an entire health market shift like now. As well as mounting political persecution of its products like they are facing today. They must rely on past experiences to get through but likely will need to start studying the new trends to stay relevant.
In 2011 PepsiCo announced the launch of their Social Vending System. This system featured a full touch interactive screen. A consumer can select a beverage and enter the reciepent's name, mobile number, and personalized message and gift it with a video. PepsiCo uses technology to their advantage for global implementation.The company uses media sites in multiple was as advertisement and marketing tools.