Challenges in Global Business Coca Cola - Essay Example

Challenges in Global Business Coca Cola Coca cola is one of the world most known brands. This organization has continued to gain growth and momentum, majoring on the rapidly expanding beverage industry. It has ranked as the globes largest beverage company. The company is operating in over 200 states and countries all over the world (Starbard 2008 pg90). However, the journey to success has not been easy many countries have banned the organizations’ products on grounds that they pose threat to the public’s health. Claiming that beverage produced by the organization cause obesity. The organization has false links with labor malpractices such as child labor, discrimination in providing health care to its staff, sweatshops and in addition, it is facing stiff competition from other organizations such as Pepsi (Starbard 2008 pg78). Competitors like Pepsi are introducing alternative beverages such as energy drinks, mineral water, fruit juice, and Gatorade. This has challenged coca-cola to diversify its products by introducing brands such as minute maid, mineral water, sprite among others. The coca cola business is truly global and consumers recognize its main brands globally. The organization has structured itself in such a way that reflects a global view. This is achieved by decentralization of operation and setting up of production plants in over 200 countries in the world. In 2001, Coca Cola Company restructured its business geographically in different operating stations all over the world. In this process, the organization renamed these centers and rebranded them. North America station changed to include; Puerto Rico, which was initially stationed in Latin America. Eurasia was changed to reflect Eurasia, Middle East, and Europe. Africa and Middle East also changed their name to coca cola Africa. The company essentially produces concentrate and syrup and sells them to bottling companies all over the world. The bottling and canning companies have the role of packaging and distributing final products. There is an agreement between the Coke Company and separate bottling companies on how to produce and sell coke products. The agreement authorizes the bottlers to produce and sell beverages bearing the trademark of Coke in identified countries and territories. Coke engage in business with three types of bottlers or contractors; bottling companies where the organization has invested in and has no controlling or management interest, bottling contractors where the organization has invested and has controlling intentions and finally bottling companies where Coca Cola has no ownership interest. The organization make investments in few selected bottling companies with an aim of to control, production, marketing, and distribution this makes them ensure smooth running of operations within Coca Cola Company. This does not imply that coca cola is not involved in the bottling operation, the agreement signed between Coke and Bottling contractors allows them to exert considerable amount of pressure on the bottlers to serve their own interest. The ethical conduct of coke enables them to carry out business around the world in a harmonic manner. Integrity is very crucial for the company combined with its values of management, accountability, passion, collaboration, quality and diversity is part of their vision in being giants in the beverage industry. Integrity in the Coke perspective is doing what is right, by embracing integrity they influence positively on their values and public image in over 200 countries and states where they do business. The code of ethics designed by coca cola will help in doing business by defining what employees should do when representing the company to its publics. It also sheds light on employees’ responsibility to the organization, customers, governments, and suppliers. The code indicates that they all should follow the law, give integrity and honesty first priority in all matters, and take accountability for all actions. Three main ethical and integrity issues that stand out in the code of ethic of Coca Cola Company include dealing with business and financial records, company assets and dealing with information. The code dealing with business and financial records states that keeping of accurate financial and business records is an essential duty for all management employees not a role to be played by the accounting and financial manger (Olson & Lopez 2009 pg56). Accurate record keeping and reporting is very important for building and maintaining the reputation of the company. When these records are well kept they also earn the company credibility and customer loyalty, it also ensures it meets regulatory and legal obligations. Transactions are recorded and classified accurately during a proper accounting period and correct accounting department are involved. Accruals and estimates are supported through documentation, based on the company budget. There is no evasion of taxes or subversion of local currency laws. This ensures that payments are made to firms and organizations accurately. Another component of ethics in the coca cola business is about company asset. The company assets are not for personal benefit or any other purpose other than for benefit of the company. Theft of company property either by physically through, removal of unauthorized company product, information or machines or non-physical theft such as embezzlement results to termination and prosecution in a court of law. The organization treats theft of other employee’s property as theft of assets belonging to the organization. The use of assets outside the lines of duty by employees requires approval from ethics officers in the operation center. Employees should not engage in personal activities during working hours that will prevent an individual from fulfilling work responsibilities. Dealing with the organization information under this code of conduct, under no circumstance are confidential information of the company leaked to the public what so ever. This can only be done when information is required for business purposes. Information within the company should not be shared with employees who do not need them (Ending 2009 pg89). The organization respects personal privacy and private information for its employees, shareholder and customers. They are handled responsibly and confidentially. Trades that involve stocks and securities, which contain non-public elements, are treated with confidentiality any member of staff who gives such information to the public is liable for prosecution in a court of law. Other organizations in the industry include Highland Spring, which is an organization that supplies bottled water in various countries in the world (Olson & Lopez 2009 pg56). It produces sparkling and still water in its production plants in Scotland, Kinross, and Blackford. It is the biggest seller of bottled water in the UK and has a substantial place in the UK still water market. PepsiCo is another giant similar to coca cola Company that deals in beverage. They produce, market and sell concentrates, finished drinks, and fountain syrups under different brands. They do business in over 160 countries all over the world. The two related companies have put in efforts to deal with ethical issues governing the work conduct of their employees and partners. However, they have not done this as elaborate as coca cola company. The PEPSICO Company for instance in its ethical conduct codes it has not clearly dealt with the issue of assets of the company. It has no clear rules on how to deal with assets belonging to the organization and those that belong to individual employees of the company. Highland springs on the other hand related to coca cola it has no channels for reporting violations or attempts to violate work and business ethics within its system, these makes the coke work ethics be a head and a bit tight compared to those of the two companies. PEPSICO and Highland Springs have to integrate elaborate ways on how to deal with asset control and use within their organization. This will help them minimize costs that are associated by destruction and misuse of assets belonging to their companies. Proper handling of information will bring about confidentiality within the organizations. This strategy is very vital for managing competitors and rivals in the beverage and bottled water industry. For instance, PEPSI Cola was in a position to manage competition from coca cola. However, due to poor management of confidential information about their brand formulae Coke was able to peak their secret and used it against them. This has reduced their competition power against coke and other giants in the industry. In terms of environmental issues coca cola has set ambitious goal to achieve by 2020. They are doing these by supporting the world life global initiative through funding. This will help in bring about climate change and sustainable development around the world. They are also helping in conserving polar bear Arctic habitat. In terms of technology, coca cola has invested heavily in creating mass awareness of its products through online advertisement. Digital platforms of advertising such as digital billboards are superlative therefore this can mean Coca-Cola can manage those who will see their adverts and at what time to deal with anima extinction. With dynamics in market patterns, Coca cola has now employed technology as an integral part of its operations especially through how it interacts with its customers. A freestyle dispenser provided by the company allows a customer to create and choose from over 100 drinks in various combinations. Freestyle dispenser through its computer- like interface has the ability to record information concerning choices from customers then sends the data back as market research on what is best for the market. The company has a challenge of adequate skilled staff who can spur maximum technological advancement. This can be handled by training and external sourcing for skilled personnel. The company is also using participation in community programs and developments as a way of lobbing local governments to serve their interest this includes sponsoring sports and community services such as provision of solar lanterns done in African states. The e lobbing strategy is appropriate in developing nations because they need capital from donors in making vital decisions. Cooperate citizenship is all about giving back to the communities in many years of business coca cola has used its resource in building communities where it does business. These efforts have helped the organization in achieving its goals because it creates awareness of company products and builds a good public image. For instance, its support for education helps in creating a pool of skilled labour force, which will enhance sustainability of the company. References Olson, J. S., & Lopez, C. (2009). Build your beverage empire: Develop, market and sell your beverages. S.l.: Cube17, Inc. Ending, C. (2009). Product innovation in the Dutch food and beverage industry: A study on the impact of the innovation process, strategy and network on the products short- and long-term market performance. Wageningen: Wageningen Academic Publishers. Starbard, N. (2008). Beverage industry microfiltration. Ames, Iowa: Wiley-Blackwell. Read More