For many years the Coca-Cola company was very focused on making Coke the largest selling cola, first in America and then around the world. At a certain point, Coke widened its interests to include other carbonated soft drinks - Sprite, for example, went from being an afterthought brand to being a critical part of the business. Eventually, Coke widened its range of interests beyond carbonated soft drinks to include water, juices, cold coffee and tea and other "alternative" beverages. The Coke portfolio now includes brands including Minute Maid juices, Dasani water, Honest Tea, Georgia Coffee (the largest selling iced coffee in Japan), Vitamin Water enhanced water, Power Ade energy drinks and Fuze tea.
Over the past few years, the company has become very frustrated with its internal product development efforts and the market research which helps drive these efforts. With the exception of Dasani (which is just plain water) all of the growth Coke has created has come from acquisitions - Honest Tea and Vitamin Water, among others - and these acquisitions have been very costly, because Coke ends up paying not what the company is inherently worth but what they had to pay in order to top Pepsi, which always seemed to be interested.
Coke's CEO has reached a breaking point. He feels like they are spending hundreds of millions of dollars a year on new product development and getting nothing for it. Then he needs to rely on acquisitions to meet his growth targets, but those acquisitions are costing the company billions of dollars, and his board is getting impatient. He is on the verge of just shuttering the new products effort and focusing on acquisitions.
But he is having second thoughts and has asked you to try to talk him out of it. How would you structure the new product development efforts at Coke? What would you focus on, how would you structure the department? Where would you want to spend time and money against these efforts?