Analysis of the Coca-Cola Company - Case Study Example

The Coca-Cola Company Company Culture and Strategy The organizational culture at the Coca-Cola Company is characterized by the presence of a distinct value and acceptance of diverse human resources capabilities which are crucial for the maintenance and sustenance of a competitive position within the market. According to The Coca-Cola Company, the organization believes in adopting and abiding by what can be identified as an inclusive workplace culture that rests on the foundations of seven fundamental values that are upheld across the firm. These core constituents of the company’s organizational culture comprise of “leadership, passion, integrity, collaboration, diversity, quality and accountability” (Workplace Culture The Coca-Cola Company). However, while the firm appreciates the long standing importance of abiding by these pillars of organizational culture, diversity is believed to be a factor which transcends its application and significance at Coca-Cola because it is on this specific aspect that the company has sought to establish its present operations and design its future prospects (Workplace Culture The Coca-Cola Company). Therefore, in essence the roots of the company’s organizational culture can be traced to the implementation of what Robbins describes as people orientation, which determines the extent to which managerial decision making takes into account the impact of consequences and results on the employees of the firm (602). Accordingly, Robbins also notes that an organization’s culture may also rely upon more than one component and thus can be recognized as a combination of several orientations that are based upon a scale depicting high or low orientation (602). In the light of this observation team orientation, which defines the extent to which a firm develops company operations on the basis of team work can also be highlighted as a critical aspect of the organizational culture at the firm (Robbins 602). Casoline and Thomas understand that Coca-Cola Company’s overall organizational characteristics pave the way for guiding the firm’s arrival into developing and emerging markets (61). Thus, it can be established that the company translates its culture of diversity into the acquisition and expansion of a range of markets which in turn are also characterized by the presence of multiplicity. For example, in accordance with its emerging markets scheme the company launches a key strategy of gaining a capital stake in firms which are acting as bottlers for the beverage (Casoline and Thomas 61). The benefit of executing this strategy is that the company recognizes the fact that a key to success in new markets lies in establishing a strong relationship with local agents. However, Casoline and Thomas acknowledge that Coca-Cola holds the capability of effectively leading this strategy because it is supported by the firm’s workplace culture, hierarchal structure, corporate objectives and its human resources potential (61). The Coca-Cola Company’s values and mission encompasses an acceptance of the community, society and global objectives which can be applied in case of each and every Coca-Cola company operation which exists in several parts of the world. The organization’s mission is marked by the presence of intrinsic aims which move beyond the desire to emerge as the largest or most profitable firm and focuses on making a difference through the brand and the product itself (Mission, Vision and Values The Coca-Cola Company). As a part of a long term initiative and comprehensive plan of action to guide the operations of the firm up to the period of 2020, The Coca-Cola Company has devised what is known as Vision 2020. By dividing the firm’s vision in each respective component of “profit, people, portfolio, partners, planet and productivity” the organization aims to achieve its objectives in each aspect by 2020 (Vision 2020 The Coca-Cola Company). For example from a financial perspective, the firm intends to enhance revenues and yearly servings by more than 50% while, simultaneously enhancing system margins (Vision 2020 The Coca-Cola Company). Management Griffin has been critical of the management culture at Coca-Cola as the author understands that despite of continued efforts to truly engage and enhance the ‘people’ side of company operations, the organization has been unable to develop an environment where team orientation and teamwork is promoted thoroughly and effectively (2007, 414). This notion implies that due to the highly centralized nature of organizational operations Coca-Cola has not been able to realize the true potential of establishing team member relationships. Consequently, it can also be recognized that Coca-Cola demonstrates the presence of a management culture that is much different from that of the company’s primary competitor, Pepsi. Therefore, while Pepsi’s management maintains the adoption of a rather brash management style, Coca-Cola’s management characteristics can be described as more discreet and refined however, this type of management trait is not applicable and suitable for leading teams and promoting coordination (Griffin, 2007, 414). Despite of the limitations of the company’s management culture it must be highlighted that the management has played a fundamental role in implementing the proposed strategic plan and carving a place for itself in an industry that enjoys the presence of a large customer base (Griffin, 2013, 79). Tracking the achievements of the firm’s management in the initial phases, the decision to form Coca-Cola Enterprises comes across as one of the most profitable decisions which have been taken by the firm (Griffin, 2013, 79). Triggered by the volatility of managing multiple bottling companies at the same time who put forth such demands that could not be fulfilled by Coca-Cola, the firm engaged in their gradual acquisition to achieve greater control and eventually succeeded in the process. Griffin postulates that on the management’s part, the acquisition of bottlers only commenced as a tactical act for limiting the emergence of demands that could not be fulfilled however, this decision eventually transformed into a critical element of the overall strategic framework of the firm (2013, 79-80). As stated previously, expansion stands as one of the most prominent objectives of the firm and it has opted to direct its decision making procedures with special focus on developing strategies for finding emerging markets which possess immense potential. Griffin asserts that Coca-Cola’s expansion in Europe and more recently in India has been prompted by the establishment of joint venture agreements to enter the markets and receive an initial boost by benefitting from local knowledge of consumption patterns, preferences and the competitive environment (2013, 80). Additionally, tactical planning of the firm’s decisions is led by a team that focuses on governing the implementation of tasks and the monitoring of the final outcome. In the present scenario Coca-Cola’s management has been actively involved in ensuring that the goals of Vision 2020 are realized. For this purpose, the management’s role has been to actively focus on the monitoring of system priorities and undertake the responsibility of managing its functioning. For example, the goal of profitability has been currently designed to be met by the advancement of cash flows for a significant time frame by inviting investment into the model and focusing upon the development of sales operations and mechanisms by fully understanding the market conditions, needs, wants and demands (Vision 2020 The Coca Cola Company). Followed by this aspect, the management is also focusing upon lowering costs and reducing expenditures that are usually incurred during production processes in addition with the function of supply chain management. Therefore, the focus of cost minimization has been specifically directed towards the divisions of production and supply chain (Vision 2020 The Coca Cola Company). Followed by this understanding, the firm is focusing upon reducing average cost per unit and from a managerial perspective this could be achieved through managerial economies of scale where average cost per unit is reduced as a consequence of the expertise of human resources and associated capabilities. As Coca-Cola has always strived to maintain the ‘people’ component of the business, the management, as per the recommendations of Vision 2020 is required to adopt the responsibility of honing the company’s human resources by initiating what can be described as a ‘cross system movement’ (Vision 2020 The Coca-Cola Company). Moreover, the management has also been engaging in development of a transparent and fair recruitment process that advances the firm’s image as an equal opportunity employer. Having stated that the company aims to increase workplace diversity by specifically focusing on the recruitment of females across all divisions of The Coca-Cola Company (Vision 2020 The Coca-Cola Company). As the company’s Vision 2020 draws from the “profit, people, portfolio, partners, planet and productivity” components of Coca-Cola’s vision, the managerial strategies for achieving them which have also been discussed previously work together to ensure that by implementing the said strategies the management at the same time promotes the vision, mission and culture of the firm. Operations Griffin postulates that because of the diverse and vast nature of operations, Coca-Cola’s organizational structure can be best described as being complex (2007, 255-256). This view entails that the firm’s organizational structure draws from a range of guidelines for establishing hierarchal structure and it chooses to alter the model as per specific requirements and demands. Therefore, apart from maintaining a functional structure which distributes business divisions such as HR, finance, legal and marketing in accordance with the roles that they serve, the firm also maintains a regional distribution for geographic locations and finally governs the management of its bottling partners under the banner of Coca-Cola Enterprises (Griffin, 2007, 256). The company’s HR department has been actively launching measures to improve its stance on diversity and promote the integration of employees who belong to a range of backgrounds into the firm. These measures may be considered as a response to HR-related lawsuits against Coca-Cola which have accused the company for discriminating against employees based on their racial affiliation and limiting their promotional opportunities (Griffin, 2007, 255) and the realization that the firm needs to hire more female employees (Vision 2020 The Coca-Cola Company). In terms of the current strategy for expanding its portfolio, the company is focusing upon introducing its established beverage brand in new, emerging and unexplored markets. Moreover, the company is also planning to engage in brand development to target customers in the younger and older age brackets (Vision 2020 The Coca-Cola Company). The firm believes that this can only be achieved once the firm utilizes its existing competitive advantage to bring innovation and cooperate with bottlers to minimize costs, increase production efficiency and benefit from extensive operations. Therefore, brand development and expansion is a primary strategic direction for the business in the current scenario. Conclusion The analysis which has been conducted in this paper suggests that since its inception the success factors which have enabled The Coca-Cola Company to achieve its objectives have been rooted in the execution of excellent tactical decisions which have later been transformed into a strategic direction for the firm. For example, the establishment of Coca-Cola Enterprises to cope with the issues of local bottlers and the establishment of joint ventures for penetrating into emerging markets both fall under this category. However, in its current Vision 2020, it appears that the company is strongly relying on its long standing goodwill and customer loyalty in the market to capture the attention of the target market of youths which may be motivated by personal preferences to opt for other beverages and not Coca-Cola. Yet it appears that the company feels that it can continue to dominate the market with its present brands. In the light of this observation, the recommended strategy for Coca-Cola would be to launch its products in new market segments for example the children’s market for snacks or health drinks for those individuals who are conscious of their lifestyle choices. In this manner the company would ensure its existence and dominance by penetrating into new markets because it has already achieved considerable geographic expansion and it may be more favorable for the company to explore such avenues. Works Cited Caslione, John A, and Andrew R. Thomas. Growing Your Business in Emerging Markets: Promise and Perils. Westport, CT: Quorum, 2000. Print. Griffin, Ricky. Fundamentals of management. Cengage Learning, 2007. Griffin, Ricky. Fundamentals of management. Cengage Learning, 2013. Robbins, Stephen P. Essentials of Organizational Behavior. Upper Saddle River, N.J: Prentice Hall, 2003. Print. The Coca-Cola Company. Mission, Vision and Values. The Coca-Cola Company. Accessed from [21st April, 2014] The Coca-Cola Company. Vision 2020. The Coca-Cola Company. Accessed from [21st April, 2014] The Coca-Cola Company. Workplace Culture. The Coca-Cola Company. Accessed from [21st April, 2014] Read More