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Roberto Crispulo Goizueta: 1931-1997: Businessman, Chemical Engineer - Became Coke's First Foreign-born Ceo

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On June 2, 1980, Goizueta won a political battle within Coke's management to become the company's next president, 26 years after he had responded to the newspaper add to work for the company in Cuba. On March 1, 1981, Goizueta was elected by the board to the company's number one position, chair and chief executive officer. Goizueta quickly set the company on a course of aggressive growth. While Coke had dominated the soft-drink market since its inception, Pepsi Cola had surpassed Coke in supermarket sales by 1979. Coke's management had historically been very conservative and there were concerns within the company and the larger financial world that Coke would soon loose its dominance in the soft drink industry.

Goizueta revamped the corporate culture of Coke to focus on generating wealth for the shareholders, or the "shareowners" as he liked to call them. "A publicly traded company exists for one purpose only: to increase shareowner value. If it does that, all the other good things will follow," Goizueta told John Huey of Fortune magazine. While his predecessors were too conservative to ever borrow money, Goizueta borrowed billions of dollars to buy out independent bottlers around the world, upgrade their distribution systems, and then spin them off as subsidiaries.

His strategy for success included diversifying Coke's domestic investments and expanding the company's market overseas. Goizueta believed that the entertainment industry could generate some of the capital necessary to fuel his company's growth, so he purchased Columbia Pictures in 1982 for $695 million. Under Coke's ownership the production company released hit films like Gandhi and Tootsie, and network television shows like Fantasy Island, and Hart to Hart. Before the end of the decade Coke sold Columbia Pictures to the Sony Corporation for $1.55 billion. Aside from this major investment, Goizueta generally advocated selling off some of Coke's smaller investments, such as shrimp farming and carpet shampoo, to keep the company focused on the food and soft drink industry.

Goizueta was also committed to promoting the Coke brand name in every household around the world. He invested in increasing international sales, particularly in Europe, Australia, and Asia. By 1988 Coke had infiltrated markets in 155 countries and 55 percent of its soft drink operating income came from overseas. Goizueta recognized that advertising was key to the company's success. In the 1970s, when Goizueta was a middle-level manager at Coke, the company introduced an ad in which children from around the world sang the words, "I'd like to buy the world a Coke." Goizueta, however, did not want to buy the world a Coke. He wanted the world to buy Coke. When Goizueta took over the company in 1981, he changed Coke's slogan from "Have a Coke and a Smile" to the more aggressive statement "Coke Is It!"

Goizueta recognized that new products were needed to fend off the competition from Pepsi Cola. In 1982 he launched Diet Coke to compete against Diet Pepsi. While the Coca-Cola company was already producing a diet soft drink called Tab, Goizueta wanted to capitalize on the Coke name. Diet Coke was a huge success. A year later Goizueta introduced the caffeine-free versions of both Coke and Diet Coke. Goizueta also made a bold move to reformulate the classic Coke recipe to make a sweeter soft drink more like Pepsi. He launched this New Coke initiative in 1985, but it was not well received by the public. Loyal Coke fans were outraged and demanded the return of the old Coke. Goizueta agreed and reintroduced the old drink as Classic Coke. The public was happy again and sales continued to rise. While some have called New Coke Goizueta's only mistake as Coke's CEO, others claimed that it was actually a wise marketing strategy that in the end boosted Coke's sales.

Roberto Crispulo Goizueta: 1931-1997: Businessman, Chemical Engineer - A Successful Career Came To An Abrupt End [next] [back] Roberto Crispulo Goizueta: 1931-1997: Businessman, Chemical Engineer - Climbed The Corporate Ladder

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