The Research Paper of New Cokein Project Planning
Process
by Xu Qianling
Matriculation number: 150006243 Programme: Project Management Process Tutor: Brian Howieson Date: 28thApril 2016 Word count: 2279
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The Research Paper of New Coke in Project
Planning Process
Introduction
It is widely accepted that project planning is one of the three specific project management responsibilities in the organizations. (Andersen, 2008)Project planning is one thing that can forecast the results in the future, increase the rate of success in the end. To predict the problems that will face in the whole project. The final aim of the organizations is to achieve success.(Lent, 2013)Therefore, it can make good efforts for the decision makers to prepare for the crisis and can achieve their goals effectively.Many project managers devote all of their energy to making products be launched successfully at the beginning.(Appelbaum, 2005)As a consequence, at the beginning of the project, it is important to construct a reasonable plan at the start of the project. All plans may not always be made at the start of the project but it should be considered continuously throughout the whole project. It is particularly necessary for decision makers to make certain ofthe cost limitation.(Heravi, 2015) For instance, the cost, the time and the quality of the project.The purpose of this research paper is to discuss the importance of project planning by illustrating through a failure case which named the New Coke. Two main aspects will be covered in this paper. The first part will cover a brief description of the failure case. This will be followed by the analysis of three main reasons of failure about the New Coke, they are wrong start-up
steps, no awareness of uncertainty factor, Lack of continuous plans in project planning process.
Analysis of the failure of the New Coke in project planning process
Coca-Cola was established in 1886 in New York. In the 1940s, it became the most popular soda drink industry company all over the world. At that time, the market share of Coca-Cola was up to 60%. In 1983: the market share ratio of Coca-Cola had fallen to under 24% because of competition from Pepsi. On April 23, 1985, the company announced they would launch New Coke to replace the old classic coke. And after 79 days, the Company announced that Coca-Cola would be returned as Classic Coke. (Schindler, 1992) This project was considered as a failure project result of many reasons. The reasons led to the failure of New Coke can be found in project planning process.As can be seen in my report, I had given the consequences about the New Coke was launched. In the first week of the taste change be announced,
customers’ original acceptance to the product was well and the ratio of sales rose by 8% compared to previous year. (Gorman, 2015) However, some public was angry, and what they detest was that they felt their favorite soft drink was lost. They gathered as protest groups, they bought a large amount of old classic cola, and also wrote songs in memory of the old taste. Their Calls flooded not only to the consumer hotline but to Coca-Cola offices across the USA. The company received 400,000 telephone calls on the hotline and also the letters to demonstrate their angry. (Benjamin, 2015)After 79
days of the New Coke launched, in July of that year, the Company announced that Coca-Cola would be returned as Classic Coke. It was obviously that Coca-Cola was not only just a soft drink, but also, it became the company’s main product,the country’s leading soft drink and people’s vital habit in their lifestyle.
Wrong start-up steps in project planning process
In 1934, another coke industry which named Pepsi launched a 12-ounce bottle of coke for just 5 cents. Coca-Cola in that time was the same price as Pepsi’s, however, it was 6.5-ounce. As a consequence, Pepsi used radio advertisements to promote: the same price, double enjoy. As a result, it received success, particularly in the young customers. In 1954, Coca-Cola’s sale decreased by 3% compared to Pepsi’s sale increased by 12%. In 1955, Coca-Cola had launched different ounce products, however, it was late. Faced that tough situation, the company put focus on the only Coca-Cola was the real one to remind consumers to compete with Pepsi. And also did flavor test between these two products, the result was the taste of Pepsi was better than Coca-Cola’s. In that case, Coca-Cola made a decision to change the traditional tastes in emergency aimed to compete with Pepsi. (Fournier, 1999) The New Coke was launched in the market.Essentially, at beginning, they pretended to replace Coca-Cola with New Coke over one night in America to increase market share with a new flavor which can win Pepsi in competition. The results of the project were to be felt by the owners of this company. The CEO was quoted saying that “we really were ready to do whatever was necessary to build value for the owners of our business.”
However, it can be realized that the project itself is not for launching the new product, it was more inclined to a competition with Pepsi.
Because only wanted to rise the product’s market share, Coca-Cola company made the impulsive decision to change the taste, and launched the New Coke. From the perspective of strategic analysis, Pepsi led Coca-Cola under Pepsi’s competition rules. At first, Coca-Cola was defeated because of the optional change of its 99 years’ taste. It damaged its own vital brand without consideration.It almost had no planning process. A good and correctproject start-up should have three steps: the first is the discussion between project owner and project manager; the second is initial planning and organization; the third is make agreements of confirmation. (Andersen,2008) For example, the company should prepare a single project, they should first discuss that with the manager and the owner, they should have the original planning, after that, this project also need the confirmation of the agreements. Coca-Cola did not do comprehensive planning, and they did not know the reason why they should change the taste, after changing the taste, what will the company gain, and when can the taste be changed at an adaptive situation. During the change period, the detailed plans should be changed continuously throughout the whole project.
No awareness of uncertainty factor in project planning process
The most important factor for the failure of the New Coke was because of the lack of former marketing research. Based on the results of marketing research, the New Coke should be successful in theory, however, the result was opposite. It can be seen that in
The Analysis of New Coke
