The Coca-Cola Company
Introduction
The Coca-Cola is the third most valuable brand in the
world just behind Apple, Google, Microsoft and facebook according to research
done by forbes (Forbes). The same
research also shows that it is the third most recognizable brand in the world. Today,
world wide more than 1.8 billion drinks belonging to the company are consumed
on a daily basis.This happens in more than 200 countries all over the world. In
the global market which is estimated to be over 341.6 billion U.S. dollars, the
Cocacola company has the lions share of 48.6%. World wide more than 1,000,300
people are estimated to be employees of the Coca-Cola company and its franchise
affiliates. The global head quarters still remain Atlanta ,Georgia ,in the
United States of America.
History Of The Coca-Cola Company
The history of the Coca-Cola company can be traced back
to the year 1886. In 1886 Dr John S. Pemberton a pharmacist living in Atalanta
created a Syrup which was the mixed with
carbonated water and described as “excellent” by those who tasted it.
Dr.Pemberton partner who was his book keeper is the one who is credited with
naming the drink ‘Coca-cola’ as well as designing the trademark that is still
used today (Coca-Cola).
In the first year alone the new drink averaged a modest 5 drinks per day
in Atalanta which at that times was going for a mere 5 cents per glass. In
1889, the Coca-cola formulae and Brand was bought by Asa Griggs Candler who
incorporated the Coca-Cola company in 1892 in Delaware from where a franchise
distribution system that is currently in use emerged.
The Coca-Cola company does not do the distribution on its own but it does
it through franchising. Through this model , the company produces concentrate
Syruo which is the sold to bottlers all around the world. Each bottler owns
specific and exclusive right to a territory. The company itself only owns its
anchor bottler in Atalanta where it was founded.
Global Management Enivironment/ Macro Business Environment
The global management environment refers to the international interactions which are beyond the company’s
control but which the company has to operate in. In other terms this is the
external environment which come as a result of the company operating outside
its boarders. They include political, legal, environmental factors among many
others. This factors might affect the business either positively or negatively
and are very vital to the survival of any multinational business especially in
regards to expansion plans. Below are some of the global environment that
affect the Coca-Cola company and their effects.
- Task environment: This refers to the the
environment which aids or hinders athe coca-cola company in in it’s aim to
complete specific tasks. They include the Franchised firms, suppliers,
distributors, and the customers. The Franchised firms, the distributors,
retailers and suppliers carry the logo and brand of the Coca-Cola company.
This means that whatever they do in the eyes of the public it is the
coca-cola compant that is doing it. If they portray a positive image then
the Company’s image as a whole benefits from this. This can clearly be
seen through the advertising and Socio-corporate activities done by this
fam. They also aid in marketing the products of the company and as a
source of information and disseminating the same especially in regard to
new product.Foer example when the Coca-Cola company introduced Dasani bottled water as a new product it
is the task environment that helped in informing the market about it.
- Political environment: A conducive political
environment is critical for economic growth. During times of war, coups
and political tensions the total sale of Coca-Cola products go down. This
greatly affects the revenue collection especially since Coca-Cola is a global
company with routes in more tha 200 countries. For
example during the Iraq war
of 2003, Cocacola sales in Iraq dropped by more than 60% as the
bottlers shut down and the suppliers were not willing to risk their trucks
and lives to transport the products. Also the consumers concentrated more
on buying the basics.
- Fluctuating Exchange rates: By virtue of
being in more than 200 countries, the Coca-Cola company has to trade with
the currencies of all thus countries. However all the countries are not constant
and will fluctuate from time to time due to political and economic
factors. This affects the company in terms of franchise licensing fee
collected and also in setting up prices for the products.
- The Sociocultural environment: In the 200
contries that the Coca-cola company operates, the people have different
cultures, religions and norms in general. This is especially the case with advertisements as some of
the advertisements done by the company has been termed as inappropriate in
some areas.
- Technological environment: With the changing
technology the coca-cola company has been forced to adopt. For examples
with the rise in the use of social media sites, the company has hired full
time social media operators to help in answering questions and advertising
its products.
- Ecological environment: Issues to do with
the environment have become a big issue to the global environment
especially due to global warming. CocaCola as a company has adapted to
this by ensuring it is using environment friendly containers at it is also
recycling them after use.
This is the act of
coming up with goals that need to be achieved, the strategies to achieve
them and what need to be done so as to achieve the same. Planning is important
as it acts as a road map to future ventures, it supports growth and future
funding, it helps in communicating a course of action amd also helps in the
control of cashflows. Coca-cola as a company has realized this and this can be
seen through their 2016 Strategic actions (The
Coca-Cola Company). In plan the mapped out the following five areas as
the way forward.
- Focus on driving revenue and profit growth:
Under this, the Coca-Cola company has a plan to increase the volumes of
sales and production in the emerging markets. This is to be done by
keeping the beverages affordable. In the developed countries, the company
has a plan to rely on the product price/mix which will improve
profitability by offering small and more premium packages such as glass
and aluminium bottles. Also segmenting the market was a map to achieving
this.
- Investing in Brand and Business: The
Coca-Cola company made a choice to invest in more and better marketing for
the products so as to improve in both the quantity and quality of the
advertisements. The plan was to increase the cost of advertising by more
than $250 million. The plan also included acquiring other beverage firms
such as the Green Culiangwang based in china.
- Becoming more efficient: This plan involves
improving efficiency and productivity while at the same time reducing the
costs. One of the solution was through the “zero-based work’ frame work
which assumes that the Company’s
budget start at zero and thus must be justified annually.The other
strategy is to cut the cost in non media advertising such as in-store
promotions.
- Simplifying the company: To simplify the
Coca-cola company, a lot of re shaping is in the chain. The plan is to do
a self assessement and and identify
areas where the company can be more efficient, quicker and smarter in
general. The layer of functional management is to be scrapped completely
and regional business units be connected directly to the headquarters. The
company is also planning and to some extend already trying to further
enhance the employee experiences at the work places.
- Refocusing on the core business: The business of any business is to do business and the Coca-Cola company is not an exception in this sense. The company has always been a world leader in the creation of beverage brands. The company in total has over 500 brands of which more than 20 generate more than a billion dollars in revenue each year. The other plan is to lead the diverse system of bottlers right across the globe and acquiring many more in the industry.The significant plan is to totally franchise the North America bottling system by the end of this year, 2017. In addition to that plans are under way to improve the bottling system in the East Africa region, China and Indonesia. Infact by the end of the year the Coca-cola company expects Coca-cola owned bottlers to produce just 3% of the global down which will go down from the 18% that is currently being produced.
Organizing can be termed as arranging and assembly
several factors and resources so as to attaint the objectives of an
organization. The Coca-Cola company practices organization in three key areas
i.e in delegating work, managing team work and human resource management.
- Organizing and delegating work:Delegation in
simple terms refer to choosin people to do a specific task or just the act
of giving control authority, a job, duty etc to a specific person. The
Coca-Cola engages in delegation at different levels. The best example is
at the international levels where specific franchises are given a specific
and exclusive area and are expected to carry out the objectives of the
company in that area. Also at the headquarters, different individuals are
tasked with doing specific tasks such as the chief financial officer who
only deal with financial matters.
- Team Work: Team work involves bringing people
with different skills and backgrounds to cooperate in achieving the
organization goals and objectives despite their differences. With a work
force of over 100,300 employees, the Coca-Cola company seems to do this
with ease.This is because the company has a policies and work ethic that
encourages this. To add to that, the company carrys out team building
exercises at the international level and also at each franchise so as to
encourage team building as its culture. Also its involvement in sports
activities such as sponsoring tournaments is meant to encourage this.
- Human Resource Management: Human resource
management is a managerial function which involves recruiting new
employees, training the new and also current employees and at the same
time providing them with direction
so as to work in the organization with an aim of achieving the
organization’s goal and objectives. The Coca-Cola company does this by
first creating an environment of
learning and development through training and internships.Secondly the
Coca-Cola company engages the employees, for example it has a system in
place where by the employees can engage the top management on matters
concerning them without fear of backlash. Perfomance appraisal is also the
other part of the company’s human resource management where by the
employees are rated according to the achievements and the top employees
are rewarded through promotions and financial incentives. Diversity and
inclusion is another way in which there is no discrimination based on
religion, culture e.t.c.
Leading in general refers to the act of excercising
leadership or a sense of direction/guardiance.It involves setting goals,taking
decisive actions in relations to the goals and challenges that might arise, out
performing the competitors and also inspiring others to perform well. The
Coca-Cola company has proved to be a pace setter when it comes to this
including creating the post of Chief customer and commercial leadership
officer. A further breakdown of the Coca-Cola leadership structure and culture
reveals the following key areas of leadership.
- Power, politics, conflicts and stress: The
most visible power shown by the Coca-Cola company is what can be termed as
power through presence.World wide, more than 94% of the population can identify
the coca-cola trademark. This is not a coincidence as any where you go you
are likely to see a Coca-Cola advertisement. This is a form of the company
exerting power on the consumers and also the competitors but making itself
not just big but also appear big.Power and politics in the Coca-Cola
company is a mix of democratic and dictatorial. This is exercised through
the appointment and influence of the individual franchises. The franchises
are also given exclusive rights over a territory in a bid to avoid
conflicts.
- Motivation: Motivation is the internal or
external factor that might stimulate in an individual or group of
individuals the desire,willingness and energy to continually be interested and commited
to a job. Internally people are motivated to work for the Coca-Cola
company as it respectable and well known brand in the world. The
franchises are also motivated by being given exclusive territories from
where they work which gurantees them a particular market. The employees of
the company are also motivated through promotions and financial incentives
which not only motivates the direct beneficiaries but also their work
mates who also want to achieve the same.
- Leading with influence: Under governance and ethics in the Coca-Cola
company website, the company states that it sets high standards at all
levels and always strive to achieve the set standards. It also has a board
of directors which are elected by the share holders to help in over sight
and influence the company in a positive way. In addition to the board of
directors, the Coca-Cola company also has a Public Policies and Corporate
Reputation which as the name suggests aims to ensure that the reputation
of the company remains as it is or
is improved. This does not just apply to the parent company and its head
quarters but also has an influence on the different franchises and
bottlers all across the globe.
- Communication and information technology:
Communicaation is more than just simply sending and receiving information.
Whatever information that a business gets is useless if the business does
not act on it and at the right time. Also the means of communicating has
changed over the years from letters, to telephones to social media right
now. Right now the most widely used means of communication by the
coca-cola company is through the use of mass media such as televisions and
radios and also the use of social media especially Facebook, Twitter,
Snapchat and Instagram. The use of social media has proved useful as
majority of the target markets are the youths who are constantly on social
media sites. To add to that, Coca-Cola has directly linked its out shore
companies directly to the main company. This has helped in easier and
faster decision making and transfer of data and information.
Controlling is setting up benchmarks or standards, then
seeing if the actual performance meet the set standards and after evaluating taking corrective action
where necessary. Controlling at the Coca-Cola is not only done at the
headquarters but also at the different franchises in the over 200 countries.
At the international levels the Coca-Cola company has a
a code of conduct that it requires each franchise to follow. To add to this,
the top management working in harmony with the board of directors comes up with
a set of particular goals that it aims to achieve in a near distant future and
starts working on it.An example of search a plan is the goal to totally
franchise the North America bottling unit by the end of 2017. If this will not
have happened by the year end, the company’s head will have sit down and
evaluate what happened and see where they went wrong and then come up with
measures to achieve it.
Each franchise is also a business on its own with goals and ambitions. It
is upto the individual franchise to come up with plans to achieve the overall
goals of Coca-Cola company and at the same time achieve the goals of the
individual business. Most of the franchises have written plans which mostly
include expansion/gowth plans and more profitability.
Control systems are generally meant to manage and direct the behavior of
other devices and people. The Coca-Cola company has invested widely in this
including have in place a managerial
information system, an accounting system, an auditing system, a database
management system among many others The people are not only controlled by this
but also by the work contracts that they sign when getting employed and also
the code of ethics and governance that guides the overral running of the
cocacola company.
Operations, Quality And
Productivity: Coordinating
Operations refer to
the action or actions of transforming resources or data inputs to
finished goods so as to deliver value to the customers.For the Coca-Cola
company this is a fairly simple plan where by the the headquarters is where the
coke syrup is manufactured, from their the syrup is transported to all
franchises across the world which then mixed it up and bottle the now coca-cola
that we know, from their it is transported to distributors who ensure it
reaches all the areas that they are allocated.
Productivity can be defined as the measure of efficiency by a person,
system, machine e.t.c. The best definition of quality in business terms is that
it is the measure of excellence or how good a product is compared to its previous
versions or other competing products. As the definitions show, productivity and
quality go hand in hand. Coca-cola has
in place a strong product manufacturing policies, requirements and
specifications which are managed the integrated quality management program
called the Coca-Cola Operating Requirements (KORE). This systems integrates the
business and quality system, intergrates preventive system, incorporates Hazard
Analysis and Critical Control Points and manages the risk in the coca-cola
company and its franchises.
Conclusion
The Coca-cola company is a true definition of a modern
multi national company. Over the years it has managed to dominate the soft
drink market and its showing no signs of slowing down. One of the factors that
can be attributed to this success is the way in which it has been able to adopt
to the changing trends in the market today for example by coming up with diet
coke and the Dasani and minute maid products. The other key to its success has
to be attributed to its ability to carry out its managerial functions
effectively. Through managerial functions such as planning,controlling,
organizing, staffing e.t.c. Coca-Cola
has proved to be a world leader and will continue to do so.
Works Cited
Coca-Cola. World of Coca-Cola. 2017. <www.worldofcoca-cola.com/about-us/coca-cola-history>.
Forbes. Forbes. 2017. article. 18 December
2017. <www.forbes.com/powerful-brands/lists>.
The Coca-Cola Company. 27 April 2016. 19 December
2017. <www.coca-colacompany,com/stories/five-strategic-actions>.
Lussier, Robert N. management
Fundamentals: Concepts, Applications, Skill Development. Cincinnati,Ohio:
South Western Colege, 2000.print.
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