The Coca-Cola Company: An Organizational Analysis

Symptoms

The Coca-Cola Company:

1. Ineffective marketing and management strategies

2. Lost profits

3. Difficulties forecasting due to global external environment

4. Operations in certain regions unsuccessful

An Organizational Analysis

TCCC'S Major Problems:

Causes

1. Issues Arising in International Markets

2. Employee Turnover Costs

3. Human and Workplace Rights

4. Health Issues

5. Land Rights and Sustainable Agriculture

By Stacey Dwyer, Kael Kernichan, Jenny Vo,

Keith White, and Kelly Willox

1. Differences in culture

2. Different economic and poltical systems

3. Varying target consumers

4. Language barriers

5. Centralization of decision-making

Issues Arising in International Markets

Best Alternative:

- Created in 1886

- Become a globally successful Company with products offered in over 200 countries

- Over 500 brands including: Coca-Cola, Fanta, Sprite, Nestea, Minute Maid, Dasani

- 2014 Statistics:

o Market share of 42.3% in soft drink segment

o Net operating revenue: 46 million US dollars

o Operating profit: 9,708 billion US dollars

o Approximately 92,400 employees

o 250 bottling partners

o 900+ plants

- Brand recognition, high and consistent quality, universal marketing, widespread product availability, product innovation

Alternative 1: Developing different market strategies for each region TCCC operates in

Alternative 1

Develop different marketing strategies for each region they operate in.

Advantages:

Disadvantages:

• Breaking down cultural barriers

• Allows more consumer awareness

• Capitalize profits

• Economies of Scale

• Brand loyalty

• Costly - time and money

• May not result in higher profits

• Varying external factors in each region

• Unstable political/economic systems

Alternative 3

Alternative 2

Restructure existing

marketing strategies

Develop different products to adapt to demographic markets and to societal/cultural trends

Advantages

Disadvantages

Advantages

• Cultural and societal variances make it difficult for standard strategies to be implemented

• Requires capital and time

• Previously unsuccessful strategies may still not be successful even after restructuring

• Strategies can be restructured to adapt to each region

• Saves time

• Less cash investment required

• Previously successful strategies can be implemented into new markets

• More resources neeed
• Factories, labour, resources

• costly: time and money

• Satisfy consumer demand with products consistent to each region's trends

• Can market a certain product in multiple regions

• Increase profits

• Expensive

• Environmental Scanning

• Product may not be succcessful

2-Year Timeline

Competitive Advantage

Definition: What sets an organization apart

• Ability to detect changes in external environment
• Allows TCCC to prepare contingency plans
• Protect their profits from unstable environments

12 Months

3 Months

6 Months

Begin

18 Months

24 Months

Geocentric Attitude

Environmental Scanning

Definition:

A world-oriented view that uses the best approaches from around the globe

Definition: Screening information to

detect emerging trends

• TCCC can detect changes in external environment
• Allows TCCC to prepare contingency plans
• Protect their profits from unstable environments

• TCCC has operations all over the world
• Adopt approaches from home and host countries
• Connect with consumers

Theories and Concepts

• Continue monitoring

• Comparison reports with previous year

• Weaknesses should be reviewed and adjusted accordingly

• Market segmentation to determine target market

• Environmental scanning to find cultural and societal trends

• Monitor and forecast external factors

• Implementation

• Hiring necessary personnel

• Capital

• Finding suppliers

• Distribution

• Evaluation

• Monitor sales volume, costs, consumer volume

• Determine changes to plan to make more effective

• Reports sent back to Coca-Cola headquarters

1) Environmental Scanning

2) Competitive Advantage

3) Geocentric Attitude

4) Project Management

5) Social Responsibility

• Evaluation

• If unsuccessful?
• 2 possible options:

1) Develop new strategy

2) May need to stop operations in that particular region if cost continues to be greater than revenue

• Delegate creative control to local management (decentralizaton)

• Local management more familiar with needs of region they are overseeing

• Create cross-functional teams in each region to brainstorm feasible strategies

• Board of directors must approve each region's strategy

Social Responsibility

Project Management

Definition: Managing activities to implement a project

Definition: A business' responsibility to act in ways that are good for society

• TCCC has multiple ongoing projects
• Must be completed on time, within budget, and according to specific instructions
• Help minimize costs and maximize revenue

• TCCC's Zero Tolerance Policy
• Ensures safety and comfort of their farmers
• TCCC has a responsibility to protect their third-party providers