Business Function and Processes. (Coca Cola Company) - Research Paper Example

Business Function and Processes Creativity and risk appear inexorably linked, as both are infinite in their diversity with the outcome that their permutation usually defies accurate description. The surroundings in which new the conception together with development of a new product or service occurs is complex and associated with creativity and risk at several heights in a wide range of situations or circumstances. Because of the multidisciplinary nature of developing a design for a new product or service, most managers in this company considered risk calculations inappropriate within such a broadly creative and developed environment. This paralleled most scholars’ view that design is something that reflects both inner and outer environments of a firm with the interface between the two becoming that that meets the preferred objectives (Chiu, 2005: 6-7). This paper will seek to evaluate critically the implications of developing a decision to design and deliver a new product or service with which to enter either a domestic or an international market. Indeed, it is a heard task. The largest number of companies enters different geographical or international markets as a stratagem of finding and getting new customers. A product may be in maturity stage in one market while it might be in the introductory level in another. Making some product modifications like changing its size or packaging design can also prolong the maturity stage of the product. However, introducing a new product is a completely new story (Brooke and Mills, 2002:72). Every product must move through the four stages of a product life cycle, which include introduction, market growth, market maturity, and sales decline (Mohr, Sengupta, and Slater, 2009: 56-57). Therefore, when deciding to introduce a new product or service into the market, company decision makers must resolve to look into the kind of implications the new product will pose to pervasive issues affecting the company. Sustainability When Coca Cola is introducing a new product into the market, it means challenges and opportunities. A new drink going into the market must pass through the introductory stage of a product life cycle whereby, customers are not aware of the product and are certainly not looking for it. Coca Cola Company will likely operate at a loss because it is investing the new drink that is bringing in minimal sales. This new drink can pass through this life cycle stage commonly referred to as “kick them back” with much ease since Coca Cola is a large, well-known company and has many means of advertising a new product. This means that, when deciding to introduce a new drink, Coca Cola has the advantage of sustainability. This is because, when the drink enters the second stage of a product life cycle, market growth, its sales will increase at a quick pace (Daft, 2009: 280-82). At this stage, Coca Cola should make sure that the product moves through this stage at a slow pace since currently, customers are deriving satisfaction from the drink and continue to purchase it. As competitors start entering the market, they will try to imitate the product or make it better and at the process, the profits realized from its sales will start declining. At this stage, the drink maturity takes place when the industry sale level off and competition starts to grow stiffer. In some cases, some companies drops out of the market probably because that are inefficient and cannot withstand stiff competition. Decision basing introduction of a new drink must stage strategies on how overcome kick them back stage and withstand competition by engineering ways of establishing survival tools (Brooke and Mills, 2002:119). In order to achieve introduction of a vital new drink decision, Coca Cola’s design must cover the drink design, process selection, capacity planning, design of work systems, facility layouts, location planning, as well as decision analysis. The decision must bear in mind that satisfying customers begins with the new drink design (Rainey, 2005: 288). Additionally, decisions initiated in this area have implications on operations and the success of the overall organization. Similarly, the process of selection and planning of capacity influences the ability and capability of Coca Cola’s production system to perform and attain customer satisfaction. The process of deciding to introduce a new product implicates the Company’s flexibility, time of production, and cost. This is because, process selection and layout are close to one another, and layout decisions incorporate work place arrangements, which influence the flow of work via its system, affects cost, productivity, and flexibility. Decisions made in introducing a new product influences layout design. This shows that, for Coca Cola to introduce a new drink, the decision will have many implications on other departments within the Company’s spectrum. Capacity and decisions regarding the target market influence the cost of operations and the ability to respond to market demand. Decisions concerning the targeted market implicate transport costs, availability of labor, the cost of material, and access to market (MacDonald, 2006: 61-77). Decision to introduce a new drink will also touch the human resource department as designing work focuses on human as the element responsible for the systems of production. Increasingly, in this era of advanced technology, managers are realizing that workers are valuable assets and can contribute greatly to the success of an organization. As such, strategic planning is not leaving behind employees as they used traditionally used to, but is beginning to involve them to help foster the systems of production. When deciding to pioneer a new product, this Company must understand that design decisions have strategic significance for business organizations. It is agreeable that the operations manager does not make most of these decisions (Annacchino, 2003:41). Nevertheless, due to the vital linkage between operations and each strategic area, it is healthy to the success of an organization to incorporate the entire functional areas of the organization in decision-making. Obviously, the essence of every business venturing into the market is to make profits from the products or services it offers (Petricka and Echolsb, 2004: 81-100). Therefore, the organization’s policy-makers structure every aspect of the organization in conjunction with its chain of supply around those products and services it offers. It is worth noting that, those organizations that design their products well have are more likely to realize their objectives compared to those with poorly designed ones. Thus, Coca Cola must have strategic interests in introducing their new drink, which will require strategic designing. Consumer understanding, recognition, and concern about sustainability are on the rise. Irrespective of regulatory requirements, firms across diverse industrial sectors are responding by expressing intense pro-action on sustainability matters. Corporate sustainability is occurring through creation of long-term value of shareholders by embracing opportunities and managing risks allied to social, economic, and environmental developments. This is resulting to two main levels of impacts namely the product or service level and the operations level. Knowingly, at the product or service level, several instruments enhance theoretically, the sustainability of developing a new product (Pride, et.al. 2011:223). Nevertheless, managers also know that these are not often fit for decision-making. The most recent findings reveal that, Coca Cola Company adopts sustainability as a broad and non-conceptual concept across all its outlets at the corporate level and incorporate it into new product development by use of triple bottom line criteria which the Company measures as far as possible quantitatively thus informing decision making at the stage gate. Coca Cola Company still relies heavily on expert knowledge in both formulation and weighing of criterion since there is evidence that the Company involves actors from all sides of the organization. This finding has paralleled with the shift a more open innovative procedure whereby decisions to introduce new products incorporate the entire panel of decision makers as well as the employees within the organization. Documented evidence reveals that, companies are deciding on new products in terms of sustainable production and consumption suggesting that they are shifting in a social technical regime from a triple bottom line where sustainability appears firstly as exorbitant towards an integrated bottom line where sustainability is a foremost way of generating profits. A decision regarding introduction of a new drink will require facilitating diffusion of new product development stratagem from all departments within Coca Cola Company to all its outlets and across other support industries such as raw material providers. Cognitively, all this will require policy guidance and further changes in the social technical environment in which this company operates. Globalization A stem review on the Economics of Climate Change and the Intergovernmental Panel on Climate Change guide for policy makers listed the issue concerning climate change at the forefront of the corporate and environmental responsibility agenda of leading firms globally. These reports highlight the hazards of climate change, the noteworthy role of anthropogenic impact and potentially enormous costs of taking early and strong actions. Surprisingly, both the reports present sustainability as the only response to the potentially catastrophic threat of climate change. This means that, when Cola is initiating a new product decision, it must consider sustainability as the key to globalization. The decision must bear in its roots that sustainability is the capacity for continuance into the long-term future and sustainability development entails of people’s process by which they move towards sustainability. The triple bottom line of this decision will implicate on the rest of Cola’s departments within its social, economic, and environmental dimensions where the Company must conceptualize its approach towards sustainable development and sustainability (Archibugi and Pietrobelli, 2003:4-7). It is worthwhile noting, integrating the triple bottom line into deciding on delivering a new product is one method by which Cola can respond in a proactive manner to challenges associated with sustainability. When making a decision regarding introducing a new product, the framework of the decision formulation empirically bases on selecting the product launch strategy. When Cola is introducing a new product into the market, managers will usually encounter fuzzy decision-making scenarios whereby traditional decision making methods fail to meet the desires of managers in this regard. Surely, launching a new drink to the market quickly is a prerequisite for acquiring a competitive advantage (Doole and Lowe, 2005: 62-65). This is where the challenge lies when international market is the subject. Nowadays, even the excellent policy makers undergo intensive pressure to bring excellent products to markets in record time. Many factors that include more intense competition due to the market maturity, globalization, accelerating rate of technological advancements, marketplace fragmentation due to transforming demographics, improved mass communication, and shorter product life cycles contribute to this pressure. The Coca Cola’s accelerated rate of product obsolescence increases the need for the Company to develop and introduce new products quickly enough in order to ensure timely entry at the time of product life cycle (Lopez, 2012:97). To be successful globally, perhaps even to survive, Cola must master strategy of the product and navigate skillfully through the appropriate application, development, and management of the product strategy that separates enduring success from failure. In this case, such a decision will influence different departments ranging from management to manufacturing to distribution (Carey, 2002:47). The challenge is conventional new product strategies do not provide a sufficiently flexible perspective for analyzing the success determinants in a highly competitive environment (Kelly and McGowen, 2010: 158-59). Even if the decision might show in the empirical work that the vitality of the success strategy lies within the management, policy makers sometimes depict their own results as limited by certain environmental forces in subsequent decisions. One of the identical factors is the impact of the strategy of launching a new product and its success. At this level, when managers are resolving to deliver a new product, they must examine the relationships among environment, structure, strategy, and performance of the new drink in the context of new product development in the global arena. Nevertheless, this might inflict terror on other departments concerned with statistical stratagem delivery of this drink must introduce a platform strategy in product development. This means, all the Company efforts will shift their attention towards making the strategy in use a success by investigating the relative impact of the drink innovation and entry strategy on cycle time and the initial market performance for the whole company. This entails massive expenditure, as it requires expensive market mechanisms such as promotion, advertisement, research, marketing, and the likes. Corporate Social Responsibility When Cola is about to introduce a new product, they must have the best interests of social corporate at heart. Currently there are non-profitable organizations formed to promote a cause perceived as being in the best interest of the public. There are many and different kinds of these ideological or promotional pressure groups and stand for a wide spectrum of issues. These groups are distinctive as the common ones campaign for social and economically related interests of people. Generally, the legislature, executive, and the public opinion are identifiable as the primary avenues of pressure for both types of groups. Public interest groups have become influential because of the fact that they are now involving political will in putting across the outcomes of the public policies. Some of them have insider status, which makes be in a position to influence the government as well as the elected officials (Hohnen, 2007: 56-58). With this sense, if Coca Cola Company would not like to squander billions of dollars on settling lawsuits, policy makers must exhibit the highest degree of competence when choosing the kind and content of the drink to venture into the market with. This brings into light that, decision of delivering a new product has implications on all company aspects of operations. As such, changes must occur and pressure must run in every corner of the whole Coca Cola Company (Brown, et.al. 2004:13). This might happen because, noting the prominence and power of business in the society, research findings suggest that the corporation should be seen as the fourth avenue of pressure since it also may be the ultimate target of pressure group activity with the view of transforming the corporate social behavior of the company. As a result, while deciding on delivering a new product into the market, Cola must understand that this decision will end up touching every department within the organization including the public relations department. Corporate social responsibility of Cola Company must roof the three categories of tactics used by public interest groups. So that their decision dos not land the whole Company in trouble, policy makers must be aware of these group’s tactics (Weidema, 2006: 89-96). To begin with, they must tackle direct lobbying tactic characterized by direct communication between the lobbyist and the government officials. The corporate social responsibility of this Company has obligations of the firm towards its stakeholders and people that its policies and practices can affect. These obligations go beyond legal requirements and the duties of the firm to its stakeholders. Hence, while making decision on delivering a new product, the decision will have alter the normal functions of the corporate social responsibility department since the company will be working on a new item. Affecting the Company’s corporate social responsibility can either reciprocate negative consequences or have immense positive results (Black, 2009:89). This is because, this department has obligations whereby their fulfillment intends to minimize any harm that may result from any decision and maximize the long run beneficial impact of the firm on the surrounding society. Nonetheless, it should be borne in mind that, the fundamental idea embedded in corporate social responsibility is that business corporations have obligations whose aim is to work for betterment. Hence, making a decision that may implicate negative results or work against this philosophy is as hazardous as initiating a decision that may endanger the well being of the Coca Cola’s corporate social responsibility department. When deciding on undertaking to come up with a new product with which to enter the market, Cola Company must be aware of what the decision may have on its corporate social responsibility. Today, one of the greatest challenges facing humankind is the ability to ensure sustainable, balance, and just development. It is not possible to meet the needs of the current and future generations unless there is respect for natural systems and the international standards protecting core environmental and social values. With this context, decision regarding a new product must recognize the importance of business presence in the current society. Strategically speaking, it is in the Cola’s and every other company best interest to contribute to addressing common societal problems as business can only flourish when the ecosystems and communities in which they operate are healthy. This broad strategic context helps explain the growing appetite by many companies worldwide for authoritative information, examples, as well as advice regarding corporate social responsibility. Diversity The top executives are the ones responsible for diversity in decision-making. Executives in an organization set the tone for how employees and other managers will make decisions. In this case, executives can end up structuring and building up culture of a company around different values that include diversity and at the same time influence how all people within the organization make decisions (Nelson and Karol, 2007:101). However, ethical issues are likely to arise when managers deviate from values of the organization and go ahead to make decisions that do not respect or reflect on the company’s diversity. Coca Cola Company is a big company that involves broad level of decision-making (Kochan, 2003: 13). Decisions made by the executives affect the livelihoods of all the employees within the boundaries of this company as well as their families and close friends. This does not leave behind the biggest spectrum of the company, which is the stakeholders and prospective clientele. This entails that; a decision regarding delivering a new product will implicate not only the Coca Cola Company, but also the rest of the people along the chain of distribution to consumption. Therefore, it is of great importance for executives to consider the far-reaching decisions impacts and how their effects within the entire system and how the decisions will perceive to represent the diversity of the organization and its prospective customers. Diversity influences company culture. Even though top executives are the ones responsible for making decisions, it is also agreeable that every employee has a role to play or contributes to the accepted norms for making. Worthwhile, when making a decision, diversity should be a necessary value for all individuals who make non-routine decisions. This will range form the top managers to the technical experts since organization culture influences these people during their decision-making period (Sommers, 2006: 8-9). Not allowing employees or stakeholders of dominant culture to make most of the company’s decisions without considering their minority perspectives only adds on to the organization’s incompetence (Ferrell and Fraedrich, 2012:43). Making a decision in order to deliver a new product for venturing into the market affects the daily well-being of the company diversity despite the fact that it comes with opportunities. In order to increase diversity in the process of decision-making, a company may choose to revise the decision-making processes and the existing responsible groups. For Coca Cola, to make a decision regarding introduction of a new drink, it can mandate the task force, executive board, and teams to make strategic decisions for the whole company only when they have a diverse composition. This means that, they will include people from different backgrounds, diverse areas of the organization, and people with different job titles. This jargon involves many brains hence delivering a new product might have a standard entry into the market (Hardina, 2007:73). Business Innovation and creativity Developing a new product is very vital for every business. It does not matter whether the product concerns consumers or other business. With this respect, if Cola Company is in the verge of introducing a new product, innovation plays the greatest part of whole procedure. The constant change in market variation and technology require big companies like Coca Cola to take congruent steps in making and meeting challenges that come along with new products. Initiating ideas whose aim is to develop a new product or improving the existing market for the existing products is a vital step in meeting this challenge. As it sounds, introduction of a new product means entry of completely fresh item into the market where potential features that influence familiarity exist (Aberdeen Group, 2005: 11-12). Consequently, designing or changing the current nature of a product maybe inevitably a result of market tweaking. It is fortunate to understand that innovating a product is not a complete a hit or miss propositions. A company has several stages that it undertake in order to improve the likelihood of successful development process. Unfortunately, there is no one best way for developing products and what works for a particular segment of an industry may not be applicable in another within the same industry. Achieving introduction of new product consistently, a company requires defining clearly and documenting the procedures needed to develop a new product and then proceed to make any appropriate improvements every time the processes are at use. This is helpful because introduction of every new product cycle in every business has different characteristics hence results to its own lessons (Hesselbach, and Herrmann, 2011: 22-25). For example, project aimed at introducing a new product in an existing or new market involves more considerable expenditure and risk than that aimed at introducing an existing design for a new application. As a result, different work packages are essential in order to complete various stages in the process of developing the program, cost, and risk to the business. Upon initiating a fresh idea whose aim is to deliver a new drink, Coca Cola will inevitably implicate the rest of the departments within the overall organization. This is because of the fact that designing the process to suit the company and new product development program involves consideration of details of introducing a new product. Designing a new product will touch the manufacturing department of Coca Cola Company. Manufacturing department is another input area of best practice incorporating the designing of a product and its relation to manufacturing processes undertaken concurrently by employees working for the same team leader. This interconnectedness ensures evaluation of the complexity and cost of manufacturing the new product at a stage when these issues can be effective and influential. In addition, it is possible to modify and take advantage of the appropriate cost of effective manufacturing methods. The name given to this technique is concurrent engineering. Risk Management In the world of risk, managers use this term to describe a culture oriented the future and dealing with uncertainty and insecurity. Risk is integral to innovation and to advanced and complex societies. Major advances are experimentation through a process that involves trying out and mixing new ideas, methods, and techniques. Taking risk can be demanding on resources and effort, but the rewards can be of great vitality when it leads to success. Over the past few years, there have been tones of innovations, particularly in the area of information and communication technology (Jerrard, Barnes, and Reid, 2008: 4-5). The urge to find solutions to nationally and globally related problems like poverty, energy depletion, pollution, is more pressing now than ever. Young people who will enter the job industry in the next decade and beyond will be facing serious social, political, and economic challenges because they will need to equip themselves with ways of addressing these challenges with view of developing new and effective ideas and approaches. However, Coca Company needs risk taking not just for addressing big challenges but also for projecting the future of the new product. Managers and policy makers need these skills and abilities in all areas of the Company life and across its subsidiary industries and occupations. Young people will need to have these skills in order to fit in the future market. As such, any decision to develop a new drink will mean that Coca Cola must put into consideration the flavors of future, which is impossible to predict unless they risk. Risk taking plays an important role in innovation process. The main objective of risk taking is to maximize rewards and cognitively avoid failure. When developing something new, policy makers take many risks. They are not sure whether their idea will not work, that someone might surpass them or that their idea will not appeal to their target market. When Coca Cola Company is introducing a new product undergoes all these speculations that end up touching every pervasive issue facing the whole firm. It is important for this Company’s policy makers to learn the elements of risk taking whereby they would be seeing opportunities rather than risk and taking a measured approach by balancing risk and reward. Enterprise development Armed with enterprise development metrics, Coca Cola policy makers can reveal the possible ways in which introduction of a new drink will implicate on the rest of the departments within the organization. This is because, with enterprise development metrics, companies are able to integrate new ideas into the stage gate of a new product development process by adhering to a strict checklist or questionnaires. It is possible to evaluate some criterion at the beginning or at the early stages of the new product development process since some metrics appear more suitable at the middle stages of the process when more information is available and the technical and economic feasibility has been satisfied (Eldred, 2008:87). When developing a new product, an organization has to exercise all its expertise in designing how the product will present itself to the market. Sometimes, the environmental and economic considerations come after the assessment of technical and environmental feasibility. This enables the company to exercise all its skills and experts get the chance to deliver the product in a completely new and different way. In this case, experts are able to use their scores to rate, rank the producer, and evaluate with reference to the Coca Cola’s rubric. Coca Cola Company rubric entails that, when an expert gets low quality design, he or she can forget about the project or improve its sustainability. In addition, enterprise development helps the other overall activities of the company work out clearly since when policy makers find themselves in the middle of the product development project; they keep going and improve sustainability of the company. Within this juggle, it is understandable that there is green light within the company development is inevitable (Monczka, 2000:61). In summary, this empirical analysis has reported that, Coca Cola Company must consider actively sustainability and creativity in their decision to deliver into the market a new product as this decision will implicate on pervasive issues like enterprise development, business innovation, globalization, diversity, corporate social responsibility and others as shown in this paper. The decision will determine the future of the product and the Company itself due to its core capabilities, societal, and customer expectations. This paper has shown that, any decision has to incorporate or integrate economic and environmental criterion more and often and thoroughly in the new product development process. Bibliography Aberdeen Group, 2005. New product development: Profiting from innovation. 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