Geneva Your story on Coca-Cola Co. (KO
) left me perplexed ("Coca-Cola: The real problem," Cover Story, Dec. 20). After reading and rereading it, I made up my mind that, too often, the financial community appraises companies based on emotional factors. Coke's business performance is measured by stock and growth figures, and the financial community blames Coke's sole emphasis on the carbonated drinks business.
In my opinion, the "real" business figures in your table "Coke vs. Pepsi" tell another story: Coke, with its $4.3 billion in earnings on $21 billion in sales, is still a better-performing company than PepsiCo Inc. (PEP
), which makes $3.6 billion on $27 billion in sales. And I bet Warren E. Buffett thinks so, too.
My time at Coca-Cola began during Roberto Goizueta's last years, outlived M. Douglas Ivester's stint, and ended with Douglas Daft's slice-and-dice job. I remember the early feeling of magic within the company, how wonderful it felt to produce and market a product adored worldwide.
Unfortunately, by putting long-timers out to pasture early, laying off thousands, and forcing others out, Coke eliminated those who knew how to make that magic sparkle, reducing the company to just another soft drink manufacturer fighting for share.
I once mentioned to a marketing executive how my friends wished Coke would air the nostalgic Mountain Top and Sprite Christmas ads -- strong connections with my friends' childhood memories of warm and fuzzy holidays. "Can't do that," came the response. "It's off target." It was obvious to me even then that the company had lost sight of how special it was in consumers' minds, acting on market research numbers rather than the longings of its constomers' hearts and souls.
Marietta, Ga. Re "China goes shopping," News: The United States, Dec. 20): Thousands of companies are trying to achieve the public recognition and brand loyalty that IBM has enjoyed from its desktop and laptop computer businesses.
After adding the value of its strategic advertising impact on customer and prospect awareness to its after-tax, bottom-line performance, the purchase of IBM's business appears to be a brilliant strategic move by Chinese-owned Lenovo and a blunder by IBM.
A decade from now, Lenovo will be a household word, and Big Blue may be a declining loser.
William A. Pauwels Sr.
Franklin Lakes, N.J.