The pressures are extraordinary. Coke is still more profitable than Pepsi, but Pepsi has pulled even with Coke in market value (at $103 billion). Ten years ago, Coke was three times bigger. The value of the Coke brand has declined 20% since 1999.
Superficially, the problem for the Coca-Cola Company looks like a long tail one. In the beginning, there was a one cola, and it’s name was Coca-Cola. Now the CSD (carbonated soft drink) category has differentiated within and exploded without.
Consumers are flocking to a new breed of coffees, juices, and teas — all categories where Coke has historically been weak. For the longest time, Coke seemed in denial, more fixated on reversing the stagnation in soda than investing in the alternative beverages that consumers were clamoring for.
Clearly, the Coca-Cola Company (TCCC) needs to be more things to more people, but not many more things. The trick is to be each of these things with ferocious intensity. So when they did Fruitopia, it would have been better not to do it in that half hearted "if only this were a soda" way. Fruitopia needed to be sold as if it were a tiny start up not an obligation.
Fragmenting markets do not, in this case, demand the product and management of long tail diversity. It just looks that way. (And it must look that way to corporations that spend a lot of time selling one or two brands millions of times a day.) The real problem is not extensity, it’s intensity. The problem is not the new diversity of the marketplace. It’s the old single mindedness of the producer.
Yes, a new culture is upon us. But the real challenge is the old cultures that still prevail within the corporation. It may be possible to cultivate lots of diversity within the corporation but I suspect that "skunk works" strategies will be called for. The corporation will have to multiply itself. The most deeply rooted "we are one organization" models will have to be denied. In order to muster that ferocity of committment from which great brands spring, it will be necessary to engage in new acts of disorganization. Yes, the marketplace is more various. But this does not require long tail strategies. It only means that the corporation becomes more various, too.
Anonymous. 2006. Queen of Pop: Meet Mary Minnick. BusinessWeek. August 7, 2006. here.