Coca-Cola is one of the most iconic brands in the world, with a history spanning over a century. It has become synonymous with soft drinks, creating a massive global presence. This case study explores Coca-Cola’s success story, key crises, and scandals, as well as how the company has managed to remain a market leader for so long.

Source: Internet

The Success Story

Origins and Early Growth

• Coca-Cola was invented in 1886 by Dr. John Stith Pemberton in Atlanta, Georgia.
• The formula was later bought by Asa Candler, who aggressively marketed it and expanded distribution.
• By 1895, Coca-Cola was sold across the United States.

Market Domination

• Coca-Cola became a household name through branding, advertising, and distribution.
• By 1919, the company was sold to a group of investors for $25 million.
• The introduction of the iconic contour bottle in 1915 helped distinguish Coca-Cola from competitors.
• The company’s famous Santa Claus campaign in the 1930s reinforced its association with happiness and celebration.
• By the 1950s, Coca-Cola had expanded into more than 100 countries.

Silicon Valley Bank (SVB) was one of the largest banks catering to the startup and venture capital ecosystem in the United States. Its sudden collapse in March 2023 sent shockwaves through the financial sector, prompting government intervention and raising concerns about the stability of other regional banks. This case study explores the factors that led to SVB’s failure, its impact, and key lessons learned.

Source: Internet

Background of Silicon Valley Bank

Founded in 1983, SVB grew into the 16th largest bank in the U.S., with assets exceeding $209 billion by the end of 2022. It specialized in serving technology startups, venture capital (VC) firms, and innovation-driven companies. SVB’s business model relied heavily on deposit funding from these clients and investments in long-duration U.S. government bonds.

Credit Suisse, one of Switzerland’s most prestigious banks, fell from grace due to years of scandals, mismanagement, and financial instability. Once a symbol of Swiss banking excellence, the bank collapsed in 2023, forcing a historic takeover by UBS. This case study explores the major factors leading to Credit Suisse’s downfall, examining key financial data, regulatory failures, and market reactions.

Source: Internet

Background of Credit Suisse

• Founded: 1856
• Headquarters: Zurich, Switzerland
• Peak Market Capitalization: ~$96 billion (2007)
• Core Services: Investment banking, wealth management, asset management

Credit Suisse was once among the most respected global banks, competing with giants like JPMorgan Chase, Goldman Sachs, and Deutsche Bank. However, a series of financial missteps and scandals weakened its standing in the banking industry.

Prologue: The Illusion of Prosperity

In the early 2000s, the United States and much of the Western world were riding high on a wave of economic prosperity. The stock market was booming, home prices were soaring, and credit was available to almost anyone who wanted it. The American Dream had never seemed more attainable. But beneath the surface, cracks were forming in the foundations of this seemingly unstoppable growth.

Act 1: The Bubble Inflates (2000-2006)

The origins of the Great Recession can be traced back to a combination of financial deregulation, a booming housing market, and risky lending practices.

• The Role of Subprime Mortgages:
  • Banks and financial institutions, encouraged by deregulation, began issuing high-risk loans to borrowers with poor credit histories.
  • The subprime mortgage market grew from 8% of total mortgage originations in 2001 to over 20% by 2006.
  • Mortgage-backed securities (MBS) and collateralized debt obligations (CDOs) turned these risky loans into attractive investments.

• The Role of the Federal Reserve:
  • In response to the dot-com bubble burst in 2000, the Federal Reserve lowered interest rates from 6.5% in 2000 to 1% by 2003.
  • Cheap credit fueled an artificial boom in housing, encouraging speculative investments.

• Wall Street’s Greed and Financial Engineering:
  • Major banks and financial institutions, including Lehman Brothers, Bear Stearns, and AIG, aggressively pushed for the sale of MBS and CDOs.
  • Credit rating agencies, such as Moody’s and Standard & Poor’s, assigned AAA ratings to these risky securities, falsely signaling their safety to investors.

In the bustling streets of Glasgow, Scotland, in the 1870s, a young, ambitious entrepreneur named Sir Thomas Lipton had a vision—to make tea, once a luxury for the elite, accessible to everyone. Little did he know that his dream would evolve into a global tea empire that would redefine the industry for generations to come.

The Humble Beginnings

Thomas Lipton, born in 1848 to Irish immigrant parents, was no stranger to hard work. At the age of 15, he sailed to the United States, where he took up various jobs, including working in a grocery store. Observing the efficiency of American retail operations, he returned to Scotland with a dream of revolutionizing the food trade.

In 1871, at the age of 23, Lipton opened his first grocery store in Glasgow. He marketed his store as offering “the best goods at the cheapest prices,” a philosophy that won the hearts of working-class families. His business grew rapidly, and by the 1880s, he owned over 300 stores across Britain. But Lipton was always thinking bigger.