Strategic Technology Audit - Essay Example

Executive Summary Business strategy is an inevitable part of every corporate firm’s management plan on which all its functioning stands. All theorganizations devise methods and apply techniques for the growth and success of their products and merchandise. Strategic audit is also an imperative part of business strategy that aims to analyze the role of business culture and environment for the development of strategic analysis and decision making. The contemporary age is the age of technological advancement where companies apply latest technological equipments to present their products in a highly innovative way to combat with rival mania under perfect competitive situation. INTRODUCTION TO COCA-COLA Coca-Cola is one of the most popular brands among all the world-class products and industries at large. Its name, brand and logo are thought to be the sign of high quality and unflinching trust. The company has made wonderful achievements during nearly quarter past century. Coca-cola was introduced in May 1886 in Atlanta, Georgia. Presently, it is thought to be at the top in respect of sales among the soft drinks of the globe. The Coca-Cola experience offers a fascinating example of the participation of an international business in local Chinese development. As China rapidly continues its evolution from a command- to a market-oriented economy—the pace accelerated by its preparations for possible accession to the World Trade Organization—global business systems like Coca-Cola may help stimulate economic growth, employment, and tax revenue. (Lin 12-23-1999). COCA-COLA----TECHNOLOGY AUDIT: Modern world has witnessed gigantic technological revolution that has not only changed people’s life style, but also has created a curiosity in every product. Technological change reduces the length of the product life cycle and therefore the time to recoup investment. (Johnson & Scholes 1993) Investment cost has also witnessed an augment as the number of technologies in a product has increased. Keeping in view this factor, the Coca-Cola Company has engrossed modern machinery, latest freezers, beautiful packing and innovative shapes of bottling according to some special mega events being held in the world. Coca Cola’s ‘Thums-Up Cola’ outsells Coke by a four-to-one margin in India. In Turkey, Coke sells a pear-flavoured drink, while in Germany it offers a berry drink. Now, Coke is developing soft drinks for tastes around the world. (Lamb et al, 2005 90) It is essential to present a product in uniqueness to enhance attraction regarding sales. The Coca Cola has always devised innovative style while presenting its products. It has launched its operations in 450 different brands in over two hundred countries. At the time of its birth, there existed no popular cola brew that could meet even the local needs of the people. The Coca Cola entered the global market with unique fashion, distinguishing formula, novel bottling pack and superb flavour and immediately captured the attention of the people everywhere. Coca-Cola introduced new bottles resembling soccer during the Football World Cup 2006 that became highly popular. Recent trends established by the technological department of the company are as under: Fast flow of advertising its new products through electronic, and print media applying latest technological equipments including TV, internet, journals, hoardings, leaflets and others Application of newly devised machinery to sterilise the bottles before refilling Inclusion of beautifully designed freezers, refrigerators, fresh generating machines and quality testing equipments Presentation of the beverage in different packing, size, colour style and various fruit flavours Presentation of Sprite and Fanta for the old people and children respectively and Schweppes as the first adult soft drink Invention of Diet Cola for the patients of diabetes, obesity, heart and stomach Presentation of fresh cocktail through machines Manufacturing of special bottles at the eve of mega events including Soccer Cup, Olympic Games and others Recently adopted policy of replacing every drop of water used before refilling and maintaining high quality of water The management of the majestic company is always active in introducing more and more brands in the field of soft drinks to retain its policy of trend-setting on the one hand, and always offer its lovers a unique product on the other. Changing Technology, Government Policies & Coca-Cola The Coco Colas learning approach exposes its vision and sharpness as well as and its command over the changing scenario. Whenever any new technological invention is introduced in the market, the company arranges an introductory seminar and meeting of the management, in which advantages and disadvantages of the invention are discussed. The employees participate in the discussions and elaborate their views and opinions. As soon as the speeches and debates of the employees are over, senior management come forward to disclose the hidden difficulties due to the inclusion of new invention and brief the staff regarding the utility of the new product and inform them how to take maximum benefits out of new equipments. Moreover, the management trains the staff in respect of evading the drawbacks of the invention. Not only the case is with a new invention, but also same is the case with the newly announced government policy as well as socioeconomic change entered the market. The Coca-Cola Industry moulds its strategies, revises prices of the products, develops schemes and applies techniques to meet the growing requirements. The Coca-Cola Company is committed to sustainable refrigeration for its vending equipment. Our Climate Friendly Coolers use a CO2 refrigeration system and HFC-free insulation foam that reduce potential direct CO2 equivalent green house gas emissions by approximately 99%. They also contain an intelligent management system reducing energy use and indirect carbon emissions up to 35%. By using these technologies, our typical Climate Friendly Cooler will reduce direct and indirect carbon emissions by over 3 tons over the Coolers lifetime. (Retrieved in thecoca-colacompany.com/) Resource Auditing of Coca-Cola The strategy of a company lays stress upon the services being offered to its clients. Similarly, companies audit their resources pointing out its strengths and flaws. Resource audit specifies the resources available to a company to support its strategies. External as well as internal resources are analysed during auditing of an organization. Some of the resources that an organization possesses contribute to the creation of a competitive advantage and underpin its sustainability, while others are non-strategic. An organization of international reputation like Coca-Cola audits both the quantity and quality of its resources to co-op with the perfect global market situation. The Coca-Cola is aware of the resource planning and deployment as the significant ingredients in the successful implementation of strategies. Here is the resource auditing of the company: Physical Resources An organization’s resources are not confined to those which it owns. Strategic capability is strongly influenced by resources outside the organization. (Warnerfelt 1984) The same is the case with Coca-Cola. The partners’ unabated faith and pleasant environment everywhere makes the brand a matchless product. Coca-Cola has acquired outstanding estates in USA, Europe, China, India, Australia and other parts of the globe and has allocated its best resources to freely exercise the best of its resources to the clients’ entire satisfaction. World’s biggest companies, hotels, restaurants, fast food chains, departmental stores, sports organizations and many others are its subcontractors and always suggest Coca-Cola in functions and ceremonies. Further, latest equipments, machinery, deluxe branded refrigerators, innovative presentation according to the requirements of mega events are also among its strengths. Financial Resources: Financial resources of a company determine its capacity regarding commercial activities and engagements. The growing needs of Coca-Cola production also seek the expansion in the volume of financial resources. At present, almost all the companies are offering the same product at the same price. It is therefore public relations play an important part along with marketing and advertising campaigns. The Coke is proud of the wide range of its consumers and in recently conducted research by its social research department; reveals that approximately 94% population of the world recognizes its brand and logo. (Quoted in mullaloosurf.com). The Coca-Cola generates huge amounts of cash flow and has $4.49 billion in cash, or about $1.90 per share. It has net profit margins of 21% and a return on equity of 33%. (Brush 2006) It has established a long range of factories and industrial zone all over the world. Its exceptional bottling, wide range of partnership and joint venture with local and multinational fast food companies and popularity include among its strengths and support it in sales promotion and target achievement. Moreover, the bank deposits and assets of its partner organizations are also a reliable source of taking great risks regarding their product volume enhancement. Human Resources Human resources are important in the growth of a company, and the employees of the Coke industry is a thing of pride for it. The company has hired the services of highly educated, well trained and experienced staff at every level for the maintenance of high quality and innovative ideas. The industry has appointed the right person at the right place at all departments in order to keep its monopoly over the industry as well as to combat its rivals. Its board of directors consists of high rank personnel that are regarded the tycoons of their respective fields at international forums. Every department is observed and watched carefully and targets are achieved on regular basis. Intangible Resources The Coca-Cola maintains intellectual property including unique and well-recognized logo, patents, trademark, product colour and taste. Its unique formula, distinguished flavour, attractive bottling, time to time innovative presentation and unchallenging reputation win a peculiarity for the company. The company’s good name and fame is also powerful resource that serves as the best of its intangible assets. Its latest market strategy that requires significant investment in new products, distribution channels, production capacity and working capital earn enhancement in production and popularity alike. According to the industry, Coca-Cola products are now consumed at the rate of more than 834 million drinks per day, and its utility patents also cause the increase of the sale of hotel and cold corner products, which use the logo under the sponsorship of Coca-Cola. REFERENCES 1. Brush, Michael. Coca-Cola shares ready to pop. (Quoted in http://articles.moneycentral.msn.com/Investing/CompanyFocus/CocaColaReadytoPop.aspx). 06/07/2006 2. Johnson, Gerry & Scholes, Kevan. Exploring Corporate Strategy. Text and Cases. Third Edition. Prentice Hall New York 1993 88-100 3. Lamb, Charles W, Hair, Joseph F & McDaniel, Carl. Essentials of Marketing South-Western College Pub; 8 edition. 2005 72-90 4. Lin, Justin Yifu, Ping Xinqiao, and Young Daiyon. The Economic Impacts of Coca-Cola System on Chinese Economy. China Centre for Economic Research (CCER) at Peking University. China. 12-23-1999. 5. Warnerfelt, B. A resource-based view of the firm. Strategic Management Journal, volume 5, no. 2. UK 1984 173 6. Worrall, Prof. Les. Strategic Analysis: A Scientific Art Wolverhampton Science Park 27th May 1998 4 (Quoted in http://www.indiaresource.org/news/2004/1053.html) Read More