Competitive Marketing Strategies: Coca-Cola Company - Research Paper Example

Competitive Marketing Strategies: Coca-Cola Company Executive Summary In this research report, the researchers evaluate the global market environment in the beverage industry. In particular, the researchers discussed and assessed the market environment in the soft drinks industry. The soft drinks industry, while it accounts for 31.90 percent of the global beverage industry, has matured in the last five years registering small growth in soft drinks consumptions. Using Ansoff’s concept of turbulence in environment, the researchers have identified that Coca-Cola is currently operating in a changing to a discontinuous business environment. As competition between PepsiCo and Coca-Cola continue to intensify, Coca-Cola needs to find other avenues of growth to sustain profitability and competitiveness. More importantly, Coca-Cola must anticipate and develop an entrepreneurial culture in the organization to maintain its market leadership. Issues identified were as follows: (1) to broaden its current mission statement to focus more on the customer’s well-being and not merely focus on the specific product benefits, and (2) to undertake a re-organization to better support its global strategy in meeting the market needs. With the need to anticipate shifts in market, the researchers believe that resistance is expected from middle managers and individual contributors. Nonetheless, with senior management exhibiting transformational leadership skills and capabilities, management will be convince its team in undertaking this transformation change, inspire their teams to transcend its current position, and offer better products and services to its customers. Should the company fail to anticipate the change in the market and respond to the market needs, it may result to lost profitability and competitiveness of the company. Therefore, in an effort to sustain its overall competitiveness and profitability, Coca-Cola must be able to develop an entrepreneurial culture to strategically address the changing market environment. More importantly, senior management must be able to provide the necessary support for the entrepreneurial spirit to flourish and compete in the globally. Introduction The Coca-Cola Company is known to be the largest and most well-known softdrinks company in the world. The company has the most extensive distribution system and considered to be the most popular brand in the world. The Coca-Cola brand is world’s top brand and had been for four consecutive years according to the Interbrand consultancy (online BBCNews). The brand is estimated to be worth $67.5 billion, $ 49.5 billion more than its book value of $ 18 billion (online BBCNews; Coca-Cola Annual Report 2005). The company was incorporated in September 1919 at the State of Delaware. The company is a manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups in the world. The company's business is nonalcoholic beverages – principally carbonated soft drinks, but in recent years has expanded its product line to a variety of noncarbonated beverages. The Company manufacture beverage concentrates and syrups, which they sell to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as some finished beverages, which they sell primarily to distributors. In addition, the company also produces, markets, and distributes certain juice drinks and certain water products under its 400 licensed brands (online Coca-Cola Company). The financial performance of Coca-Cola Company has been strong in the last four years. Revenues in 2005 grew 4 percent from last year’s $ 21 billion, and registered an 18 percent increase since 2002. Operating income grew by 7 percent from last year while net income only grew by 1 percent largely due to increase from taxes and interest expense. Nonetheless, net income since 2002 still registered a growth of 60 percent (Coca-Cola Annual Report 2005). Coca-Cola Company Condensed Financial Statement (in $ millions) 2005 2004 2003 2002 Operating Revenue 23,104.00 21,742.00 21,044.00 19,564.00 Less: Cost of Sales 7,263.00 6,781.00 6,912.00 6,299.00 Gross Margin 15,841.00 14,961.00 14,132.00 13,265.00 Less: Operating Expense 9,756.00 9,263.00 8,911.00 7,807.00 Operating Income 6,085.00 5,698.00 5,221.00 5,458.00 Less: Interest, Tax and Other Income 1,213.00 851.00 874.00 2,408.00 Net Income 4,872.00 4,847.00 4,347.00 3,050.00 Source: Coca-Cola Annual Report 2005. [Online] Available: http://www.thecoca-colacompany.com/investors/annualandotherreports/2005/downloads.html Coca-Cola’s success is attributed to its strong brand name. While its brand has been a source of its competitive advantage in the beverage industry, the company has been working to change its image from a well-known softdrinks company to “a non-alcoholic beverage company with an expanding portfolio of choices to meet consumer needs.” Moreover, the company also is undergoing corporate public relation image change as it markets itself as “a global citizen committed to making a difference on the planet… operating with renewed vigor to increase profitability and to strengthen relationships with our business partners.” The Coca-Cola company has therefore embarked on a journey in reinventing itself as more than just the Coca-Cola product that we know of (Coca-Cola Annual Report 2005). With the changing market environment, the company has been initiating changes to awaken and reinvigorate the sleeping giant. In this paper, the researchers will discuss the different change drivers both in the market environment and internal organizational change within the Coca-Cola company. Part of the diagnosis of the company is evaluating the current position or state of the company, the sources of resistance within the company, and the styles of leadership that will guide the company in reinventing itself to address the new market challenges. The researchers also discuss two alternative scenarios that could happen if the organization continues on its current path, and if the company undertakes a change in its organizational structure. Environmental Analysis of Beverage Industry According to Datamonitor, the global beverage industry is valued at $1.035 trillion, which grew by 2.5 percent in 2005. The market consists of the total revenues generated through the sale of soft drinks, beers, ciders, flavoured alcoholic beverages, spirits and wines, valued at retail selling price. Global industry consumption increased by 3.1% in 2005, reaching a volume of 519.1 billion liters. Industry experts consider the market as relatively matures and does not display any dramatic growth or decline in 2005 (Datamonitor 2006). \ The three main sectors in the beverage industry are the brewers, distillers and vintage, and softdrinks. The brewers account for the largest share in value accounting for 34.10 percent of the total market, while soft drinks account for 31.90 percent of the total market revenues (Datamonitor 2006). The soft drinks industry is valued at $151.6 billion, which grew by 1.7 percent in 2005. The industry has matured significantly over the last five years registering only 1.8 percent compound annual growth for the period of 2001-2005. Market volume also grew by only 1.7 percent in 2005 reaching 157.1 billion liters. Standard cola sales account for 42.9 percent of the global market’s value, while diet cola sales generate a further 17.4 percent of the market revenues. In geographic region market, the United States account for 42.5 percent of the market, Europe and Asia-Pacific with 31.6 percent and 11.6 percent respectively (Datamonitor 2005). Multinational companies dominate the global industry landscape. The Coca-Cola company leads the soft drinks market segment, with 31.3 share of consumed volume, while PepsiCo follows closely accounting for 19.8 percent share of the industry (Datamonitor 2005). Despite Coca-Cola’s market leadership in the soft drinks segment, PepsiCo is the global beverage industry leader, generating 3.1 percent of global industry volume against 2.2 percent of Coca-Cola (Datamonitor 2006). Increasing consumer and regulatory awareness of health problems arising from obesity and inactive lifestyles represent a serious market risk to carbonated soft drinks and brewed drinks as well. The changing consumer preferences for a healthier lifestyle further cap consumption of products. It can result increase regulatory environment (such as increased taxation for brewed drinks) for its serious health side effects. More importantly, increasing consumer awareness can result to a public backlash which can erode brand equity which companies, such as Coca-Cola, have established for a very long-time (Datamonitor 2006). Ansoff’s Turbulence in the environment To further analyze the changing market environment in the beverage industry, the research looks at the concept of environmental turbulence introduced by Igor Ansoff, a world-reknowned guru in strategic management. Ansoff suggests that for a firm to optimize its competitiveness and profitability, it has to match its strategy and supporting capability with the environment. Ansoff’s concept of Environmental Turbulence classifies and describes the different market environments in which a firm operates. Ansoff identifies five distinct turbulence levels, span from a spectrum in one extreme stable or repetitive environment to the other end as surpriseful or unpredictable environment. Furthermore, Ansoff describes that for each turbulent environment a strategic success formula is recommended to maintain competitiveness and profitability of the company (Pun, 2006). The global soft drinks industry has been a mature market with small incremental growth from changing consumer preferences. The soft drinks industry is also considered as a level 3 to level 4 changing environment wherein customer’s demands are becoming highly differentiated by different buying power and consumer product preferences. The industry has been dominated by the popular brands such as Coca-Cola and Pepsi. The key success factor has been Coca-Cola’s marketing effectiveness and strong brand equity. However, with the emergence globalization and the rapid shifts in customer’s needs, wants, and attitudes, the industry is moving further into a discontinuous environment (Pun, 2006). The need therefore to create an anticipatory and entrepreneurial working environment is imperative in the changing market environment. Management must be able to extrapolate key market trend such as the growing healthy lifestyle among consumers. “Organic” and “low-carb” products are increasingly popular; therefore, the shift of consumer preference from carbonated soft drinks to healthier drinks can affect sales and overall profitability. More importantly, if unanticipated, Coca-Cola can lose its overall competitiveness in the beverage industry (Datamonitor 2005). Coca-Cola must be able to match its products to cater the changing consumer preferences. The company must not only anticipate this change, but must be develop new products to enable the improve profitability and increase market share. Current Issues/Problems Reinventing Coca-Cola Company – Evaluating Strategic Mission/Vision Coca-Cola’s mission is “(1) to refresh the world… in body, mind, and spirit; (2) to inspire Moments of Optimism… through our brands and our actions; and (3) to create value and make a difference… everywhere we engage.” Its strategic vision is to achieve sustainable growth in profits, people, portfolio, partners, and planet (online Coca-Cola Co.). Despite its mission of providing the important benefits of a beverage company, the company should realign its mission to focus not only in the important product benefits, but for the well-being of its consumers. As marketing companies emphasize the importance of meeting market needs, issues on the quality of life in marketing are becoming increasingly important in an increasingly changing environment in which firms are held accountable for their behavior. Customer well-being goes beyond the subjective measures of customer satisfaction, trust, and commitment by bring in and taking account the macro and societal aspects of marketing. Coca-Cola, in taking part of larger societal issues such health issues of customers, goes beyond marketing the mere product benefits, but emphasizes its value in society and the transcends its function defined by its corporate by-laws. Organizational Structure For a marketing company, mantras, such as “stay close to the customer,” and “put the customer at the top of the organizational chart,” have defined the purpose of a business. Companies that are better equipped to respond to market requirements and anticipate changing conditions are expected to enjoy long-run competitive advantage and superior profitability. However, with the globalization as a key driver of change, companies are no longer operating their local markets, but find itself in marketing to diverse and changing market requirements. The need to meet the diverse needs of different geographic markets requires a different strategy all together and a change in the organizational structure to support it (Vrontis and Sharp, 2003). Traditionally, companies operate in a multi-national set-up wherein firms establish subsidiaries in different countries to market to the different geographic regions. Each subsidiary develops and markets products locally and reports to its parent company. However, as Coca-Cola is a global company, the current organization structure does not support its objective of offering a consistent brand marketing message across geographic regions while meeting the diverse needs of each market (Vrontis and Sharp, 2003). Sources of Resistance The researchers believe that resistance will be encounter with changes to global strategic initiative and re-organization. Employees in middle management and individual contributors may resist the organizational change especially as Coca-Cola’s current organization structure has been for a long-time successful in meeting market needs. Furthermore, with the re-organization would mean changes in current functions and roles, changes in the functional departments, and may result to layoffs of employees. The re-organization may also require infusion of new employees into the company that has the specific skills and capabilities needed to deliver the results required for the Coca-Cola to succeed in the new market environment. Leadership Such change may need a transformational leader within the organization. Transformational leaders provide a purpose that goes beyond the short-term goals and focuses on higher order intrinsic needs. This results in followers identifying with the leader’s capacity to lead the company to a higher level. Transformational leaders demonstrate the following: (1) a vision, (2) an role model and an inspiration, (3) an achiever and result-oriented, and (4) leverages with people’s skills and capabilities (Chang, 2006). Scenario Planning The possible scenarios if the company does not undertake this transformational change to meet the changing business environment is the possibility of consumer backlash in Coca-Cola products and an erosion of the company’s brand equity. As the Coca-Cola’s brand is an important strategic asset, the public consumer backlash may affect the overall competitiveness of the company and places it at risk of sustaining its profitability. If Coca-Cola is able to follow-through with the transformational change, it would be mean a sustained competitiveness in the marketplace. It would result to an exciting change in the company, who has for decades exhibited excellence in building customer’s trust and brand preference. For middle managers and employees, it would be further growth opportunities in their current roles and responsibilities. Conclusion In conclusion, change is the only constant in business today, which means organizations need to transform themselves regularly in order to stay ahead of shifting industry conditions. Senior management must be role model of transformational leaders, inspiring its teams (i.e. employees and middle managers) to enable their organizations to address the unique opportunities and challenges that lie ahead of the company. References BBC News. Coca-Cola still world's top brand (22 July 2005). [Online] Available: http://news.bbc.co.uk/1/hi/business/4706275.stm Chang, R.Y (2006). Being an Effective Transformational Leader. Chief Learning Officer 8: 17. Pun, S.S (2006). Managing Turbulent Environments: Igor Ansoff’s Strategic Success Model. Management News: Singapore Institute of Management. Coca-Cola Annual Report. (2005). Coca-Cola website. [Online] Available: http://www.thecoca-colacompany.com/ Datamonitor (2006). Global Beverage: Industry Profile. Datamonitor (2005). Global Carbonated Soft Drinks: Industry Profile. Datamonitor (2005). Coca-Cola Enterprises, Inc: Company Profile. McKevley, S.M. (2006). Coca-Cola vs. PepsiCo – A “Super” Battleground for the Cola Wars? Sports Marketing Quarterly 15: 114-123. Vrontis, D. and I. Sharp (2003). The Strategic Positioning of Coca-Cola in their Global Marketing Operations. The Marketing Review 3: 289-309. Coca-Cola Company Proposed Change Strategy Executive Summary Coca-Cola has been for decades a symbol of a business success and many consumers have identified and strong preference for the brand largely because of its marketing effectiveness. As Coca-Cola competes aggressively against PepsiCo for global market share, Coca-Cola now faces a challenging task of sustaining its growth and profitability in a mature soft drinks industry. While the success of Coca-Cola has been attributed to its strong brand name, the researchers believe that Coca-Cola must revisit their mission and vision in the face of potential threats of increasing regulation on soft drinks industry, slowing population growth, and shifting consumer preference for a healthier life style. The researchers believe with the success of Coca-Cola, its organization has become complacent as its brand continues to be a cash cow for the company. Nonetheless, with the changing consumer preferences, Coca-Cola must find ways to innovate and to respond to the changes in the market. Our prescription of change is to redefine the company’s mission and vision to focus on the broader market industry. Traditionally, Coca-Cola’s mission has focused on the soft drinks industry. While this strategy has undoubtedly been a success, Coca-Cola must now find other avenues of growth. Thus, the researchers believe the Coca-Cola must broaden its business scope and continuously look for opportunities to expand its product/brand portfolio in the global market. To support this strategy, it is recommended for Coca-Cola to undertake re-organization. The researchers expect that resistance will be encountered from individual contributors and middle management; however, with a transformational leader in the top management, the researchers believe that top management will be able to effectively lead and enroll the team to the new vision and mission. Prescription of Change New Mission/Vision Organizations go through cycles as part of their growth and development. Organizations and groups choose different times to revisit and revise their inner identity. Most organizations start out with a clear purpose and a lot of energy. Organizations or teams in this early phase are having fun and growing their dream. They have a compelling vision, and they are propelled to make it happen (Scott et al. 1993). After its initial period of creative excitement, the organization enters stability or managed growth. They build structure to ensure that their purpose is carried out consistently and define the way things are done. But in doing so, they inevitably lose something. Organizations at this development stage predictably become set in their ways and lose their ability to innovate and respond to the market place. Eventually, company employees feel that the magic has gone out of the work and now it’s “just” work. Sometimes a shift in the environment, maturing of a product, or a crisis pressures the organization or group to act differently. It needs to change (Scott et al. 1993). Similarly, Coca-Cola is facing a tough challenge ahead of them. On one hand, the company has built an organization around its powerful globally-reknowned Coca-Cola brand. Its huge success has resulted to a very important strategic asset, but at the same time it created a barrier for change. The company’s success has resulted to greater resistance to change in the organization to adapt to the changing market environment (online Coca-Cola). The researchers revisit the current mission and vision of Coca-Cola (online Coca-Cola). Coca-Cola defines its mission and vision as follows: Mission Everything we do is inspired by our enduring mission: To Refresh the World… in body, mind, and spirit To Inspire Moments of Optimism… through our brands and our actions To Create Value and Make a Difference… everywhere we engage Vision To achieve sustainable growth, we have established a vision with clear goals. Profit: Maximizing return to shareowners while being mindful of our overall responsibilities. People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy people’s desires and needs Partners: Nurturing a winning network of partners and building mutual loyalty Planet: Being a responsible global citizen that makes a difference. In revisiting the firm’s mission and vision statement, the researchers view it as an opportunity to begin a new phase. The new phase signifies a realization to recapture the initial energy of the firm in recapturing not only the team’s but the market’s imagination as well. The new visioning process offers the company an opportunity to change and operate with greater vigor. Visioning allows the organization to take a hard look at itself. With the changing market preferences, the researchers believe that Coca-Cola should redefine its purpose as not only a beverage company seeking to “refresh the world” but to rejuvenate the body, mind and spirit. As the company is still globally recognized as a soft drinks company, Coca-Cola must market itself as more than just a soft drinks company that offers its customer more than simply refreshments. Direction and Scope of Change The company should be moving from a solely operating in the beverage business and expand into the food sector. Coca-Cola has a definitive foothold of the soft drinks industry with more than 32 percent market share; however, growth and consumption within the segment is slowing down and the market overall has matured. The direction therefore is improving its portfolio of brands and products to increase market share in other segments such as juices and mineral water. One of key weaknesses of Coca-Cola is its over-reliance to in extending its brand name to sales growth in old brands. While new products such as Vanilla Coke and diet Coke with Lemon may attract some customers from rival colas, and perhaps even generate incremental sales in the category. As a whole, the risk of cannibalizing existing sales in the long term is strong. Coca-Cola must therefore find other avenues of growth other than extending one’s own brand. That is, Coca-Cola must develop new products in other product category to sustain its competitiveness in the beverage industry (Datamonitor 2005). In addition, increase regulation within the industry can adversely affect the business. For example, the company had witnessed increase public policy challenges regarding the sale of its beverages in schools, particularly elementary, middle, and high schools. The issue of soft drinks in schools in the US first achieved visibility in 1999 when a California state legislator proposed a restriction on the sale of soft drinks in local school districts. As of December 2004, a total of 21 states had regulations restricting the sale of soft drinks and other foods in schools. Such developments in the market environment describes the risk the company should face if the company is unable to develop new products to meet market needs (Datamonitor 2005). Speed of Change Faced with a tougher competitive environment, shrinking market shares, changing market behavior, and maturing of key market, executive management should push their middle management and individual contributors to become global strategic thinkers with aggressive entrepreneurial spirit. Middle managers and individual contributors must continually be asked to generate long-lasting, breakthrough products and ways to exploit new markets with Coca-Cola’s technology (Palley 1999; Vrontis and Sharp, 2003). Executive management must instill a sense of urgency throughout the organization. One reason for the urgency of paying more attention to expanding product lines is that a failure to do so would enable even the smallest competitors to carve out niches in the markets in the non-alcoholic beverage industry (Palley 1999; Vrontis and Sharp, 2003). The researchers propose a time-frame of five year goal of rekindling the entrepreneurial spirit within the company with focus on the following factors: 1. Global perspective: middle managers and individual contributors must think strategically with a total business perspective and not just a product focus. 2. Entrepreneurial thinking: individual contributors must look for innovative ways of expanding existing markets, identifying new markets and evaluating new product opportunities and innovations 3. Planning capability: an effective manager must have the ability to develop a well-thought-out strategic marketing plan 4. Team approach: the manager must display the leadership to gain willing participation from R&D, manufacturing, finance, sales, and other functional areas and merge that input into the strategic marketing plan. 5. Implementation: middle management must be able not only to shape the objectives, but also to implement them through competitive strategies. While the goal of executive management to rekindle the entrepreneurial spirit within the company, executives must emphasize the urgency of such task and evaluate the willingness of individual contributors to align to the new vision and mission. Proposed Change Management Plan From an organizational perspective, change involves difference “in how an organization functions, who its members and leaders are, what form it takes, or how it allocates its resource” (Huber et al 1993, p. 216). From the perspective of organizational development, change is “a set of behavioral science-based theories, values, strategies, and techniques aimed at the planned change of the organizational work setting for the purpose of enhancing individual development and improving organizational performance, through the alteration of organizational members’ on-the-job behaviors” (Porras and Robertson 1992: 723). One of the bedrock of organizational change is Lewin’s contribution to change management. According to Lewin, in any individual, group or organization there are two competing forces in operation. These are the forces of stability that aim to maintain the human system in the status quo and the forces of change that push the system towards change. In most human systems, these two forces are evenly balanced – maintains the system in the status quo. Therefore, Lewin proposes that for change to happen, either the forces of change need to be strengthened or forces of stability need to be weakened (Nilakant and Ramnarayan, 2006). Lewin argued that enhancing the forces of change would lead to a corresponding increase in the forces of stability. Therefore, weakening or reducing the forces of stability can more effectively bring about change. This step of weakening the forces of stability is referred to as unfreezing in his change model. After the system is unfrozen, the existing forces of change will ensure that the system moves towards a new state. Once the system has moved into a new state, it is refrozen in that state by the adoption of new habits, structures, or culture (Nilakant and Ramnarayan, 2006). In the same note, executive management must lead its team from its current complacent status quo and instill with its middle managers and individual contributors the sense of urgency to anticipate and to respond to the changing market conditions. Non-performers can be weeded out from the organization to move the company forward to its aim of building a entrepreneurial thinkers within the organizations with a global perspective. Leveraging Change With the proposed re-organization of Coca-Cola to a more entrepreneurial culture, resistance is evident especially as individuals will be pushed to deal with the organizational changes within the company. Employees may resist change because of adjustment problems. Thus, Furnham (1994) has suggested a range of options to deal with these changes. Furnham (1994) proposes the following strategies in dealing with and push through change within the organization: (1) fellowship, (2) political, (3) economic, (4) academic, (5) engineering, (6) military, and (7) confrontational. The fellowship strategy relies on interpersonal relations, using seminars, dinners, and events to announce and discuss what needs to be changed and how. In political strategy, the political structure is identified, targeted, and persuaded by attempting to influence the official and unofficial leaders to adopt the change. In economic strategy, economic incentives may be used to persuade the people to adopt change. While the economic strategy assumes that money can be good incentive to gain following, “buying people off” can be costly and its effect is only short term. With academic strategy, top management undertakes a massive information campaign in persuading the people to accept the need to change. In engineering strategy, executives redefine the roles and responsibilities of individual contributors to match the new organizational structure. With military strategy, management results on brute forces and sometimes ignorance to effect change within the organization. Lastly, with confrontational strategy, individuals within the organization are rallied to adopt the change with a goal to beat competition. It arouses and leverages on anger in people to confront the problem to adopt the change. Few of these strategies occur in isolation. In the case of Coca-Cola, it is recommended that management would clear define the new vision for the company and undertake a massive information campaign in enrolling employees. Fellowship strategy may work well in persuading employees to see the change will be for the best of the company and changes within the organization structure can allow middle managers to participate with the change. But, more importantly, top management must ensure economic incentive is in place to persuade key personnel to remain with the company during the process of change. A Change to an Entrepreneurial Culture A way to promote corporate intrapreneurship is to established companywide policies and procedures that give employees personal freedom to explore new products and technologies. The ideal culture is to Managerial Roles and Leadership Style Managers play a key role in achieving the desired change. In his seminal work “Nature of Managerial Work”, Henry Mintzberg discusses his understanding of managerial work, ‘what managers do’, The basic thesis of Mintzberg is that the a manager is a reflective planner, organizer, controller, and a leader. This suggests the four roles a manager does are to plan, to organize, to control and to lead a team of individuals to accomplish a specific task (Duncan, 1982). As such, a manager is needed to facilitate the transition from the current status quo to the intended state. Among the four roles of managers, one key folklore is that a manager generally acts a leader for the team. As managers try to influence the individual contributors to their team, they become situational leaders for the company. As the name of the approach implies, situational leadership focuses on leadership in situations. The basic premise of the theory is that different situations demand different kinds of leadership. From this perspective, to be an effective leader requires that an individual adapt his or her style to the different demands of different situations (Northhouse, 2004). Situational leadership stresses that leadership is composed of both directive and supportive dimension, and each has to be applied appropriately in a given situation. To determine what is needed in a particular situation, a leader must appraise the given situation and evaluate her or his employee’s capacity to succeed in a particular task. Based on the assumption that employees’ skills and motivation vary over time, situational leadership suggests that leaders should change the degree to which they are directive or supportive to meet the changing needs of subordinates. In essence, situational leadership approach allows a leader to match his or her style to the competence and commitment of the subordinates (Northhouse, 2004). In transitioning Coca-Cola from the current status quo to an adaptive enterprise, managers must have a firm grasp of the situations and allows managers to guide their individual contributors to excel and succeed in the market. It would allow managers to effectively plan, organize, and control the changes within the organization. Communication Strategy for Change Situational leaderships allow management to reach its employees more effectively as the individual contributors can consult with their managers on they can participate with the changes within the organization. This allows dialogue between employees and management on the key issues employees face with the changes in the work environment and why the change is needed to be implemented. It also allows Coca-Cola management to gain commitment and enroll individuals to the desired state in which the company wishes to compete. Conclusion The researchers believe that resistance will be encounter with changes to global strategic initiative and re-organization. Employees in middle management and individual contributors may resist the organizational change especially as Coca-Cola’s current organization structure has been for a long-time successful in meeting market needs. Furthermore, with the re-organization would mean changes in current functions and roles, changes in the functional departments, and may result to layoffs of employees. The re-organization may also require infusion of new employees into the company that has the specific skills and capabilities needed to deliver the results required for the Coca-Cola to succeed in the new market environment. Therefore, in order to leverage change to an entrepreneurial culture within the organization, the researchers propose for managers to approach changes within the organization as situational leaderships to plan, to organize, and to direct the individual contributors to the desired state of the organization. Such change strategy will need a strong transformational leader within the organization. Transformational leaders provide a purpose that goes beyond the short-term goals and focuses on higher order intrinsic needs. This results in followers identifying with the leader’s capacity to lead the company to a higher level. Transformational leaders demonstrate the following: (1) a vision, (2) an role model and an inspiration, (3) an achiever and result-oriented, and (4) leverages with people’s skills and capabilities (Chang, 2006). References: Chang, R.Y (2006). Being an Effective Transformational Leader. Chief Learning Officer 8: 17. Coca-Cola website. [Online] Available: http://www.thecoca-colacompany.com/ Datamonitor (2005). Coca-Cola Enterprises, Inc: Company Profile. Duncan, P. (1982). Current Topics in Organizational Behavior Management. Haworth Press: New York. Furnham, (1994). Psychology of Behavior at Work: The Individual in the Organization. Psychology Press: UK. Nilakant, V. and S. Ramnarayan (2006). Change Management: Altering Mindsets in a Global Context. Sage Publications, Inc.: USA. Northhouse, P. (2004). Leadership: Theory and Practice. Sage Publications: UK. Palley, N. (1999). Competitive Marketing Strategies. CRC Press: New York. Porras, JI and PJ Robertson (1972). Organization Development: Theory, Practice and Research”, in The Handbook of Industrial and Organizational Psychology. Scott, C.D., D.T. Jaffe, and G. Tobe (1993). Organizational Vision, Values, and Mission. Crisp Publication: United States. Vrontis, D. and I. Sharp (2003). The Strategic Positioning of Coca-Cola in their Global Marketing Operations. The Marketing Review 3: 289-309. Read More