Purpose: Why is The Coca-Cola Company using zero-based budgeting?
In recent years, The Coca-Cola Company (KO) is facing decreased global demand for its soft drinks due to customer health concerns about the sugary drinks. It has responded to decreased demand with a variety of ways, including cost cutting measures.(Trivia: Coke sells Coca-Cola in every country in the world except for Cuba and North Korea.)
In January 2015, Mike Esterl of the Wall Street Journal reported that Coke is using zero-based budgeting throughout its organization. In addition, Coke is standardizing operations across its business units. It expects to complete the cost-cutting by 2019.
1. What is zero-based budgeting?
2. Why might Coca-Cola want to use zero-based budgeting?
3. Do you expect that managers at Coca-Cola would embrace zero-based budgeting? Why or why not?