Coca-Colas Stakeholders - Case Study Example

Coca Cola’s Stakeholder Name Institution Course Instructor Date Table of Contents Introduction 3 Stakeholder analysis 3 Stakeholder engagement 4 The Coca Cola-UN MDGs relationship 6 SWOT analysis 7 Strengths 7 Weaknesses 7 Opportunities 8 Threats 9 TWOS analysis 9 SO strategies 9 WO strategies 10 ST strategies 11 WT strategies 11 Recommendations 12 Conclusion 12 Appendix 1: TWOS MATRIX 13 References 14 Coca Cola’s Stakeholder Introduction Recent research findings reveal that corporate sustainability and responsibility (CSR) is the major aspect that determines the survivability and performance of any modern organization. To maintain, develop and benefit from its wide market coverage, Coca Cola invests lot of time and finances in ensuring that it meets its yearly-drafted CSR objectives. For instance, the management of the company set a decade-long objective to restore the water used by the company in production of soft drinks by the year 2020. 2014 business reports show that the company has replenished more than 50% of the water on a global scale through the process of developing community-based water projects (Balmer 2014, p.3). Apart from the water initiative, the company is actively engaged in empowering its stakeholders, contributing to charities, producing healthy drinks, among other CSR approaches. However, the emission of green house gases remains a major obstacle to the fulfilment of CSR objectives. As such, this paper aims to present a case study of Coca Cola’s CSR with respect to the company’s stakeholders. It will achieve its objective by analyzing the company’s stakeholders, describing the company’s stakeholder engagement, contextualizing on the Coca Cola-United Nations Millennium Development Goals (UN MDGs) relationship and presenting the company’s SWOT analysis. Stakeholder analysis Analysis of stakeholders refers to the process of finding the effect of a given outcome that result from the implementation of a given company’s CSR project. In this regard, according to the 2012 sustainability report, the original framework of Coca Cola’s stakeholder model consisted of employees, customers, consumers, local and international non-governmental organizations (NGOs/INGOs), government, suppliers, communities, and investors. However, due to the necessity of performance, the company restructured stakeholders into constituencies consisting of employees, customers, suppliers, consumers and communities; Pressure groups consisting of investors; regulators consisting of the government and INGOs/NGOs (Hastings & Domegan, 2013, p.67). Following the restructuring (see Table 1), it is evident that the company could not fulfil its sustainability objectives alone without engaging the stakeholders. That is why the company engages its stakeholders through collaborative projects, promotions and awareness programs. In return, the company obtains better approaches to attain sustainability objectives. Moreover, the company creates better communication networks with stakeholders thereby bringing the company closer to the society, creating new markets for Coca Cola products and building a good reputation within the global community (Balmer 2014, p.3). Table 1: The restructured stakeholder model Constituencies (Stakeholder) Pressure groups (Stakewatcher) Regulators (Stakekeeper) Employees Government Customers INGOs/NGOs Suppliers Consumers Investors Communities Stakeholder engagement The company engages its employees via competent training, addressing their concerns and creating a safe and viable working environment. To customers, the company created an independed committee to address customer concerns thereby engaging customers indirectly in the decision-making process. Moreover, the company’s distributors are trained continually to satisfy customer demands. The company urges its suppliers to produce biodegradable products and pollution-free wastes. As such, it provides its suppliers with unlimited access to technological advances that promote the exploitation of renewable energy with low emission of green house gases. The company established a website that engages the consumers in the company’s operations and allows them to easily access information about the company’s products (Roth 2014, p.176). Additionally, it focuses on transforming the global communities through projects such as EPODE (which urges communities to create sustainable projects). EPODE’s influence is far reaching based on its four aspects that include public and private collaboration, political engagement, community-oriented approaches and evaluation approaches. For instance, EPODE is the main awareness and prevention program that addresses complications arising from early childhood obesity in Belgium and France. Coca Cola engages its investors in the active communication network of CERES. CERES represents a collaborative organization between companies, environmental NGOs and investors that promotes agendas based on establishing environment sustainability projects. To global governments, the company promotes various government-backed movements that promote healthy lifestyles. For example, in Columbia, Coca Cola supports sporting activities that promote physical health. The same applies to China, Latvia, the United States and Germany, among other countries. The company offers financial and ideological support via its philanthropic wing aimed at engaging the INGOs/NGOs in fulfilling their mandate in different regions around the world. For example, the company technically and financially supports a local NGO in Brazil to educate youngsters in entrepreneurial and retailing skills. The Coca Cola-UN MDGs relationship Business sustainability reports reveal that Coca Cola is yet to actively aid the UN in fulfilling its millennium development goals. However, some initiatives extracted from the company’s sustainability and GRI reports show accomplished CSR initiatives that coincide with UN missions (Roth 2014, p.190). In this regard, first, the company allocated more than 1.25 million dollars in its 2012/2013 report to improve water and sanitation systems in Indian schools thereby meeting the UN’s mission to eliminate hunger and poverty. Second, with respect to the UN’s mission of achieving global primary education, the company aids many children around the world to achieve primary education. For example, it enrolled more than 21,450 students in schools in Quito, Ecuador. In China, the company’s 2012/2013 GRI report promoted healthy living among 51,000 primary and secondary students in Hong Kong. The ‘Let’s Play’ project of 2011/2012 in Turkey targeted to improve the physical health and creativity in more than 125 elementary school students (Walsh & Dowding 2012, p.6). Third, the company has continuously implemented its policy of promoting equal employment opportunities to all genders of the society. In this regard, it meets the UN’s mission of establishing a world of gender equality. In combating HIV/AIDs, the company donated more than 1 million dollars to organizations such as Hope Worldwide in 2011 to address the needs of HIV-orphaned children in Africa. It is currently working with Africare in South Africa to establish projects that help HIV affected communities. Therefore, it meets UN’s mission of combating HIV/AIDs pandemic. Finally, the company supports global research and development initiatives that protect the environment and promote safe and sustainable living (Balmer 2014, p.3). As such, the company fulfils the UN’s missions of promoting worldwide research and development and establishing a sustainable environment. However, the company is not involved in any activities that promote the achievement of several UN missions such as improvement of maternal health and reduction of child death rate in the world. SWOT analysis Strengths It is a company that has operated for more than a century with a worldwide market for its diverse products. Moreover, by operating in nearly all countries, the company capitalizes on the emerging and ever-growing middle class customers. Additionally, the company is supported by dependable investors who are contended with the constant growth of the company’s dividends. In this regard, the company’s is characterized with 0.51 Beta values (it means that the company’s stock is stable and predictable). On another note, the company’s brands are common and widely recognized, which makes it hard for other competitors to outdo it (Hastings & Domegan, 2013, p.77). Many business reports show that Coca Cola enjoys a high percentage of consumer loyalty, therefore, the company records constant and continuously growing profits. Moreover, the globalization of the company puts it in a competitively advantageous status of hiring qualified professionals, investing in research and development initiatives in addition to the earlier highlighted advantage of reaching a wider market. Weaknesses Coca Cola produces many products deemed unhealthy by many scholars based on the high concentration of sugar. Also, it licences or rather markets over 500 brands of soft drink beverages, which is an early indication of the company’s elastic limit in diversification of brands (Torres et al. 2012, p.18). Alternatively, research reveals that the company experiences low sales in North America and European countries, which threatens the company’s prospects of continuous growth. As such, the same goes for the inability of the company to reach growing markets in India, Brazil and China, because a large percentage of the population is located in rural regions. Moreover, with respect to recent research findings, only Coke and Sprite brands are popular, in this context; over 400 brands of the company are not well recognized. Some organizations are destroying the company’s market by holding public campaigns that discourage the consumption of Coke beverages. Finally, the company supports many beverage-producing plants around the world. Such engagements increase the operational costs that threaten the future operations of Coca Cola. Opportunities The company enjoys a reliable and a well-organized distribution network that allows supply of its brands in all areas around the world. Additionally, it is financially capable of buying out prospective competitors. It is evident with the recent acquisition of the Mexican-based, Del Valle Company. Also, the corporate world studies reveal that there is a probable increase in the energy-drink consuming market. Therefore, the company can capitalize on the emerging market. The innovative branch of the company recently launched the beverage dispenser (Freestyle) which shows prospects of attracting many customers who are interest in testing the new experience. Moreover, the axing of taxes on soft drinks in Europe gives the company a chance to sell its brands at lower prices thereby increasing sales and profits (Balmer 2014, p.3). Finally, the emergence of online marketing and new markets in Asia and South America gives the company an opportunity to reach many customers. Threats The company still faces constant market threats from PepsiCo. In addition, there is an increase in the number of countries banning consumption of drinks with high concentration of sugar as a way of battling obesity. Moreover, Coca Cola faces collapse from, first, spending a lot of finances on the purchase of the highly priced ingredients. Second, the company’s globalization faces the threat of weak currency exchanges. On another note, the World Health Organization (WHO) recently banned the daily consumption of drinks with more than 10g sugar content, a measure that threatens the company’s beverage sales (Lachat et al. 2011, p.195). The soft drink market is highly competitive and concentrated which threatens the existing market of the company. Finally, the company’s diversification and investment in many production plants has led to the ignorance of the economies of scale. TWOS analysis SO strategies S1O3 there is an ever growing market in Asia and Latin America. In this regard, Coca Cola needs to strategize on expanding markets in such regions. In this case, the company needs to tailor the products to meet the desires of the locals. S2S6O5 recent research shows that there is a remarkable increase in the number of people from Asia, South America and Africa surpassing the poverty margin. This means that people can spend on luxuries, therefore, the company needs to strategize on how to capture the emerging consumer section. S3O6 Coca Cola enjoys the support many loyal customers. Therefore, to maintain such support, the company needs to continually produce new products and tastes that met the desires of the customers. S5O4 the less-established business enterprises are versatile in developing new products, in this regard, the company needs to buy out such enterprises to eliminate potential competitors and obtain new ideas. WO strategies W1W3O6 the marketing of the company’s products is affected by anti-Coke campaigns. The campaigns proclaim the company’s products as unhealthy thereby damaging the image of the company in many regions. To overcome the damages, the company needs to produce health beverages. W4W3O3 Coca Cola collaborates with many beverage-producing companies, as such; the company needs to concentrate on forming mergers with South American and Asian companies as a way of cutting down operational costs. W2O4 the less-established enterprises can create a future threat to the company in terms of diversification and innovation of products. Expecting such situations and buying such enterprises can give the company a stepping stone in gaining new products and preventing probable threats of competition. W1W3O2 many people around the globe may follow misleading anti-Coke usage campaigns based on economic, religious, social and political interests. The company can effectively use the internet by creating an online platform with the objective of spreading the truth about the product around the world to amend the damages caused by the false campaigns. ST strategies S1S6T1 Coca Cola has the financial ability of venturing in research and development. In such case, the company needs to use research and development to compete with rival companies at the global level. S2T2T5 the company has existed for more than a century, by harnessing such influence the company can attract many consumers. S1S5T6 the collaboration of Coca Cola with smaller companies in many countries has extensively diversified the company’s investments thereby reducing the chance of cutting down the costs in the production process. The company needs to design approaches that focus on economies of scale. S1T5 the ever spreading myths on the effects of using Coke products has influenced a large number of people around the world to avoid Coke products for health concerns. The company needs to invest in research and development to clear doubts on the health effects of the products. WT strategies W1T5 many scholars accuse Coke products of having negative effects on individuals’ health. It is a necessary measure for the company to produce healthy drinks. W4W5TT6 the costs of labour are rapidly rising thereby making the production of beverages expensive. To curb the rising costs, the company needs to relocate its production plants to countries with affordable labour such as Bangladesh, Vietnam, China and India, among others. W2T1T2 the company needs to liquidate unprofitable units and facilities. Recommendations The company expresses its concern on involving stakeholders in addressing sustainability issues. Therefore, the company needs to devise a fair process of engaging stakeholders, because several complains have emerged on unfair treatment of stakeholders in developing countries. Moreover, the company needs to address conflicts resulting from labour and farmers conflict. South America and Asia are emerging markets with high population of consumers. In this case, the company needs to strategise approaches aimed at tailoring products that suit the social, religious and cultural desires of the local communities. Lastly, the company needs to invest in research and development to create frameworks that observe economies of scale and cuts down operation costs. Conclusion In conclusion, the paper presented a case study of Coca Cola’s CSR with respect to the company’s stakeholders. It achieved its objective by analyzing the company’s stakeholders, describing the company’s stakeholder engagement, contextualizing on the Coca Cola-UN MDGs relationship and presenting the company’s SWOT analysis. From the description of the aspects, it is clear that the company does not face any major threats that can lead to its downfall in the near future. By engaging in community development projects and protecting the environment, the company is actively pursuing its sustainability objectives. More of importance is the engagement of the company in green economy. It makes the company to stand miles a head in establishing good reputation and an unshakable market for Coca Cola product brands. However, the concentration of the beverage market makes it difficult to prospect if the company can continue making high profits. In summary, the company faces no threat in the near future; however, it needs to address the concerns on the impacts of consuming Coke products. Appendix 1: TWOS MATRIX Strengths weaknesses S1 Research and Development S2 Product brand S3 Consumer loyalty S4 Supply and distribution channel S5 Contented investors S6 Strategies of marketing W1 Unhealthy products W2 Diversification limits W3 Anti-Coke consumption campaigns W4 Many production sub-companies W5 Globalization W6 Many facilities Opportunities O1Europe’s tax exaction O2 Internet marketing O3 Economic development in South America and Asia O4 Buy upcoming enterprises O5 Emergence of middle class O6 Inventions and innovations SO Strategies S1O3 Concentrate on South American and Asian markets and produce brands tailored to suit the local population S2S6O5 Marketing strategies needs to focus on emerging middle class earners S3O6 Produce new tastes and brands to retain loyal customers S504 Expect to buy out emerging enterprise to eliminate competitors and increase diversification WO Strategies W1W3O6 Produce safe and healthy products W4W5O3 Reduce costs and form merges in South America and Asia W2O4 Expect to buy out emerging enterprises to obtain new products W1W3O2 Utilize the internet in countering the effect of anti-Coke campaigns Threats T1 Worldwide competition T2 Concentrated beverage market T3 limitation in sales T4 Expensive ingredients T5 Cognisant customers T6 Economies of sale ST Strategies S1S6T1 Invest in research and development together with marketing to counter worldwide competition S2T2T5 Use the influence the brand to attract more customers S1S5T6 Research methods of focussing on economies of scale S1T5 Focus on research and development to address health concerns of conscious consumers WT Strategies W1T5 Sell healthy products W4W5T6 Relocate production to countries with affordable labour W2T1T2 liquidate unprofitable company units References Balmer, J. 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