Question 1: Describe the “performance-expectations gap” evident in this case – what were the

stakeholders’ concerns and how did their expectations differ from the company’s performance?
(15 marks)

In this case the main issue faced by the Coca cola Company (TCCC) was damaging the
environment by disposal of harm water and causing water shortage around the globe. To
understand the concept of “Performance-expectation gap” that can be simply defined as there is
gap in organization performance and desires of stakeholders. In book it is defined as the
difference between company performance and stakeholder expectation. The stakeholder concerns
mainly of Kerala (state in India) states that TCCC was using contaminated water containing
pesticides and depleting ground water while production. The firm was more diverted towards
making large sum of money rather than taking care of environment. Another concern was that
use of excessive water by bottlers for operations that caused shortage of water for the inhabitants.

The stakeholders were expecting safe, quality and clean drink from the world most renowned
company conflicts with TCCC disposal of grounded water and using excessive water that
resulted in unsafe drinks. The use of abnormal resources which could have been used lower
raised the gap.

Question 2: If you applied the strategic radar screens model to this case, which of the eight
environments would be most significant? Support your position. (5 marks)
Among the eight components of external environment which indirectly impact the company’s
performance. The environment that would be used from strategic radar screen would be
geophysical. The stakeholders were getting affected by the use of excessive water and
contamination of natural resource. TCCC also faced challenges in legal environment from Indian
court and the involvement of government regulatory bodies and United Nations also involved
political environment. Lastly, the customers were also unsatisfied and concerned about the safety
issues.
Question 3: In your opinion, did TCCC respond appropriately to this public issue? Why or
why not.
In my opinion, Initially, TCCC response was negative to Indian governmwnt but later they
have realised the damages they have caused to the environment. With the help of global
comprehensive study and engagement of stakeholders the issue had been resolved. TCCC
made “Water neutrality” as goal of company and set objective to reduce, replenish and recycle
the water. Moreover, implied the operation to efficiently utilize the water and reduce wastage.
The company response to stake holder concerns were appropriate as it demonstrated corporate
social responsibility and followed issue management process. The reduced water ratio figures
of 2011 shows TCCC commitment to bring water neutrality and meeting the goal.
Part B:
The Tobacco Industry
Tobacco a plant was introduced by American Indians to Europeans since then it is deeply
connected with United States history. Tobacco is by-product of plant containing nicotine,
cellulose, ammonia and protein. Humans consume it in shape of leaf, snuff, chewing tobacco,
cigars and manufactured cigarettes. For human consumption the tobacco leaves are separated
from the stems and dried after plucking them from the plant. The tobacco industry is one of
the oldest industries of the United States. This industry flourished and became the source of
international trade between two continents. However, in the last half of twentieth century this
industry faced downfall due to legislations and health hazards. It became life threat to the
adults and youth in the United States. Americans have spent more than 75% of accounts to
fight the chronic diseases caused by consumption of tobacco. Instead of large number of
awareness campaigns and health problems the use of tobacco increased generation after
generation deadly. Among the world top tobacco producer China ace the list followed by
Brazil with 2.8 million metric tons and 761 thousand metric tons production in 2016.
Now the question arises that what factors contributed to increase consumption of tobacco
among children and young generation? The media played significant role in contributing the
increased consumption of use of tobacco. According to public health commission in USA
suggest that the reason for increase use of tobacco in young generation is cigarette
advertisements that attract the immature minds. Because children at this age go through certain
mental and physical changes and the advertisement positions themselves as way to get through
the stress. The basic issue of rise of tobacco industry since ages is not control on tobacco
advertising and corporate sponsorship. Since 1994 the USA government has implemented
certain tobacco control legislation that included promotion of tobacco through billboards and
TV advertisement will be banned. But instead of this Philip Morris (Tobacco Company) sales
roared twice to 900 billion sticks that year. Despite of the legislations and tobacco control
campaigns the industry strengthened with merger and acquisition in the past two decades. The
“Big four” of tobacco industry through consolidation challenged the tobacco control and
policy makers to sustain the WHO framework convention on tobacco control.
The increase in tobacco consumption is giving rise to several public and legislative issues
including efforts to control tobacco advertisement and corporate sponsorship. If this issue is
addressed and implied, there are great numbers of stakeholder that will be impacted by these
actions. In 2009, congress passed a law of family smoking prevention and tobacco control act
2009 to limit the promotion of tobacco to young people. These laws restrict the primary
stakeholder to invest in this context. Moreover, many employees lost their jobs and the
cultivators’ major losses. The advertising and promotion budget decreased 4.9 billion to
quadruplet. Due to which the unit price of the cigarette decreased and became affordable.
Companies have started spending on sponsorship and other public events entertainments
activities that increased the followers of the brands. Of all the major stakeholders the main
stakeholder was consumer who used to pay large sum of money to inhale poison for lungs.
According secret strategic report that the once a young get addicted to the brand that loyalty of
brand will transmit to generation after generation.
Being a stakeholder in tobacco industry, we have certain responsibilities to control the tobacco
consumption and promotion in society. As an individual we need to create health hazards
created by the use of cigarettes. We need to educate and our friends, parents and siblings about
the rate of death sue to lungs cancers, heart diseases and other pathological disorders. On other
hand apart from abstaining we need to create to find to the root cause of the disease that is
stress, being unacceptable in society and lack of tolerance. Smokers support group should be
formed where they can feel relax and share their feeling. Moreover, as a family member to
abstain this habit we need to be emotionally intelligent and make less stress that addicted
person to the cure the disease. In USA according to report more than 2500 people stop
smoking and 1200 people die due to smoking every day. To control the tobacco advertisement
and sponsorship the companies we will do campaign to abstain from signing contracts and
taking money from those companies which are using these companies to promote their
product. Movies and dramas that contain smoking scenes should be censored in cinemas and
homes. The vendors should check who they are selling cigarettes too if the individual is less
than 18 years he should be arrested. Smokers will hate me for these restrictions and may be
the media people also target for imposing restrictions but we will do everything under law to
protect ourselves and restrain the use of tobacco.
The legislative bodies should treat cigarettes as luxury item and impose extra taxes to burden
the consumer and make it less affordable. That step will decrease the consumption of
cigarettes among young people as they don’t have less resources of money. Moreover,
smoking in universities, schools and colleges should also be banned. Students who do this
should be evicted from the institution. Teachers should do counselling of the affected kids. To
impose these legislations we need to carryout campaigns to direct towards these impositions.
Then the stakeholders will take it as big investment and invest in other goods that in turn will
increase the job opportunities and better life opportunities. Being a stakeholder, we also need
to consider the air pollution and damage the emitting of smoke is causing to the environment
and family members. The research says a single smoker is affecting the lungs of 25 people in
his surrounding, those people are not smokers but the smoke is affecting their lungs. So, every
individual should step to cure our society from this hazard.
Well I were an executive in tobacco industry to be honest, I will be promoted to this rank due
to my performance at other ranks. Moreover, I would have my qualification and experience to
this designation. As we learn that every company aims to earn profits and once I interacted
with the tobacco farmer he said that “I know that this is poisonous for humans but I have to
earn bread for my family. Instead of facing the legal challenges and public issue my aim
would be to continue production. I need to attract more people to our company by sponsoring
events and involvement in social projects. But to be ethically responsible I will also aware the
consumer about inhaling the smoke. I will create more job opportunities to increase the
workforce by also hiring the black people to create sense of harmony. To respond the public
protest and taxes we will lower the unit cost by cutting out the expenses on advertisement and
promotion.
Companies like Phillip Morris have invested large sum of money for the welfare of the society
by building schools and educational institute. To sustain relationship with the suppliers
including the framers we will provide them extra health care and housing benefits for lifetime.
To increase social welfare we will go the African countries and hire workforce from there. To
attract the young graduate towards the tobacco industry we will create “Graduate training
program” worldwide. That will attract the young generation moreover large amount of wages
would be paid to the incumbents to retain them for long time. Entering in more consolidations
will be my long-terms strategy to strengthen the company against political forces. Mostly the
tobacco production is hazardous for health. So we will go and merge with the pharmaceutical
companies to be on safe side and will remain publically responsible. Additionally, we will work
with hospitals to provide donations for lung cancer treatment to create positive word of mouth
for the firm.
The main issue is increase in consumption of tobacco due to advertisement and sponsorship.
Every year millions of people fight with lung cancer and lose their life. Recently, the number of
lung cancer increased in young generation. To cope out with the issue restriction is not the only
the solution we need more precautions. One stick of cigarette contains 4000 kinds of chemicals
that affect the human lungs and continuous depletion of tar turns in to cancer. It is estimated that
more than 8.2 million died of cancer in 2012. The current figures estimates that more than 4
million die each year due to smoking diseases and it is predicted that by 2030 this will the most
preventable cause of premature of deaths. The increase in tobacco cause diseases is relentless the
regulatory bodies need to take action.
In this alarming state the Government bodies have the power to induce control on tobacco
consumption. Like Bhutan and Thailand government did after the 1994 legislative action and
WHO campaigns. Now Bhutan is the smallest consumer of tobacco due to their religious
restriction and government policies. There are many ways to control to tobacco production by
imposing taxes, restricting import, ban advertisements and sanctions. To control the tobacco
advertisement Norway and Finland were the first countries to ban the tobacco advertisement and
promotion. The World Bank report states that there is 6 to 7% decrease in use of tobacco
consumption due to ban on advertising. But now the companies are investing this promotional
budget in indirect advertising and stretching the brand names. The companies are finding the gap
in Government legislative and exploiting them to sponsor the events. For instance, in 2003 the
grand prix motor racing was sponsored by Tobacco Company. The band only restricts the
branding, logo, promoting through news paper and billboards. But the ban should be
comprehensive and include all the six tools of promotion to restrain the promotion. Moreover,
companies are nowadays virtual means to communicate effectively that should also be focused
by Government authorities.
The Government should make public areas smoke free to prevent the health of non smokers. The
sisha bars, vaping and smoking in public should be banned. There should be proper ban on
female smoking that smoke in restaurants and parties. The smoking bans in restaurants will be
beneficial for the tourist more people will love to come in smoke free environment. The passive
smoking controls should be encouraged by the Government for the welfare of people. Tobacco
smuggling and import should be banned by the Government. Government should monitor the
activities of smoking companies just like Thailand did. Thailand Government took the concerns
seriously and acted upon them resulted in banned tobacco advertising, controlled distribution and
selling of tobacco plants and imposed ban on tobacco import that listed them among the less
consumer of tobacco.
Media is the essential medium of communication that stimulate the psychology and behaviour
of the viewers. Media is the medium for direct communication for the firm that include TV,
newspaper, social media, radios and billboards. Instead of legislation media is playing vital
role for promoting tobacco through specific promoting brands, news coverage, and screening
of tobacco in movies and dramas, sponsorship, media campaigns to control use of tobacco.
According to reports from 1940 to 2005 the USA has spent over $250 billion on cigarettes
advertisement. Nowadays they are allocating certain discounts estimated to 75 % of the price
cut down and decreased unit cost. On the micro level media affect the thinking, behaviour and
actions of individual. On large scale media influence the social policies, government actions
and public volunteers. The Government restriction on advertisement resulted in introduction of
“Menthol cigarettes” that were promoted through media with message that it contains less
amount of nicotine. Till 2006, the sales of Marlboro menthol increased to 16% with the largest
market share, and they have hired young smokers to show the impact of cigarettes and
promote their usage. Magazines promotion was increased from 15 % to 50% that in result
decreased advertising for non menthol products and increased advertising for menthol
cigarettes. Moreover, certain movies character mainly promoted the use of cigars and
cigarettes. Recently, a movie fault in our stars protagonist used to hold cigarette between lips
that attracted more young generation. The way to position cigar as luxurious item by media is
also hazardous for society.
The article 13 of the WHO Framework Convention on Tobacco Control (FFTC) supported by
172 countries banned all kind of traditional promotional including all the direct and indirect
sources of promotion.
Then the industry did research and found virtual medium to communicate and reach out the
end customers. The rise of social media in the last decade give rise to effective medium for
communication with less cost and high frequency. A single post and share get millions of
views with in the blink of eye. The promotion and selling of E- cigarettes through face book,
twitter, YouTube and direct websites has again given rise to promotion of tobacco.
The most essential and flexible way to reach the end customer is website that each tobacco
companies has and the user can get information about the product and order it online. Again
the companies have found the gap in legalisation and found a new point of sale. There the user
can buy on less cost than the retail store and the company sales increasing in this way.
The companies such as British Tobacco Company has adopted interactive medium for
communication through social media. Recently, they have launched an interactive campaign to
design Camel Cigarette and the campaign was promoted throughout the world through Face
book. This campaign resulted in interactive, fun, creative image of the brand and customer
engagement with the brand and created potential customers. The App store of Iphone offer
“Ishisha’’ that offer customise shisha options to the gamer.

YouTube nowadays is one of the most popular and most viewed medium of social media. As
the research says that content on shown in videos or advertisement has direct impact on
increase in number of smokers. The recent survey in 2009 on YouTube concluded that more
than 70 % of tobacco related content was promoted through it. That contained customer’s
reviews, pictures of events sponsored by companies, vintage cigars promotion and videos of
young girls and boys to promote ways of smoking. The tobacco companies BAT and Phillips
Morris denied uploading such content but there should be proper government monitoring on
such kind of content.
To control this medium of communication the Australian Government has implied internet
filters under Broadcasting services Act 1992. The Government formed the commission to
monitor online content and control the material shared through this medium. Same as there
should be lawsuit by all Government to protect these promotional campaigns.
To quote the example of companies like how they are increasing their customer base and
brand loyalty a campaign started by Marlboro named as “Outwit the west” in the campaign
smokers based on four member were created and top 20 teams won the chance to visit
Marlboro ranch (place where you are provided with food and excessive cigarettes and all the
expenses were paid by the company) instead of ban the company attracted thousand teams
through indirect advertisement.
In short, Media either modern or traditional both played vital role in the promotion of
smoking. Despite of the anti smoking campaigns, media is still the catalyst to ignite the
cigarette in young as well as adults. The big five of the tobacco industry has made media as
their stakeholder by providing the benefits for the long run. The legislative and efforts of
WHO FTFC are becoming weak due to vital support media to these companies.