Coca Cola

Implementation Program: 1986-1989

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Coca Cola (1981-1997 and 2004-2012)

Background: (1981-1997)

  • Roberto Goizueta was appointed CEO of the Coca-Cola company in 1981, following years of lagging shareholder returns
  • During Goizueta’s tenure, the Coca-Cola Company institutionalized a disciplined and systematic approach to managing the shareholder value growth of the company

Actions: (1981-1997)

  • Under Goizueta’s leadership, the company:
    1. Eliminated economically unprofitable businesses including: industrial water division, wine division, food division, plastic packaging division, entertainment division
    2. Strengthened the business model of the consumer beverage franchise through brand proliferation, global market expansion, systematic market development, all of which lead to significant improvements in profitable market share
    3. Infrastructure development, expanding the company’s global bottling and distribution network

Results: (1981-1997)

  • During Goizueta’s 16 year tenure as CEO, Coca-Cola delivered average compounded total shareholder returns of 27% per year

Background: (2004-2012)

  • Following Goizueta’s unfortunate death in 1997, the company’s new leadership lost focus on economic profit growth and began competing for volume, at almost any cost.  As a result, Coca-Cola’s share of global economic profits declined as did the company’s relative shareholder returns
  • In 2004, Neville Isdell was appointed CEO and began re-institutionalizing many of the disciplines original put in place by Goizueta – focus on economic profit growth, segment specific business strategies, focused allocation of capital
  • Those disciplines have been further embraced and implemented since 2008 by Muhtar Kent, Coca-Cola’s current Chief Executive

Results: (2004-2012)

  • As a result, the Coca-Cola Company is once again delivering top quartile shareholder returns