COCA COLA COMPANY ANALYSIS
Introduction: Company history and growth 3
Corporate culture 3
SWOT analysis 4
Organizational structure 7
Employee motivation 10
Introduction:Company History and Growth
Coca-Cola is a leading producer of softdrinks and beverages, operating almost in every country around theworld. The company started as a patent medicine in towards the end ofthe 19thcentury by Chemist John Pemberton.1During the early stages of the company, the soft drinks were soldlocally, gaining popularity among the people who sampled them. Soonafter that, the distribution expanded out to Atlanta, as other statesfollowed shortly after that. Impressed by the market performance ofthe product, the company’s stakeholders began mass bottling byinstalling factories that processed the soft drinks. The companystarted distributing its products across America, and before themiddle of the 20thcentury, they were selling in other continents, notably SouthAmerica, Europe and parts of Asia.2By the turn of the new Millennium, the company had grown on a globalscale, doing business in almost every corner of the globe. Today,Coca-Cola has many subsidiaries and affiliated partners, operating ona revenue of about $46 billion.3This paper is an analysis of the Coca-Cola Company from a managementperspective.
According to the company, it exists tobenefit and refresh everyone whom it touches. The company, therefore,has a core belief that is grounded in global ideals, supported bylocal insights and inspirations. While it operates to servecommunities, the company has a culture of taking responsibility forevery aspect of their business, ranging from environmental toeconomic impacts. Six pillars support the company’s corporateculture.4The first one is leadership. According to them, leadership should bethe courage to shape a better future for the employees and allstakeholders. The company also believes in collaboration with otherpeople with the same interests, which is for leveraging collectivegenius. Coca-Cola also has a strong believe in integrity, as itencourages its employees to be real focused. Accountability is alsoanother important pillar for the company’s organization culture.The company, over its years of operations, has built a culture ofembracing diversity, given that it operates virtually in every placeacross the globe. Finally, the company believes in quality, which isachieved by doing everything to the best level.
The company’s mission and visionhighlight the essence of its corporate culture. According to itsofficial website, the mission is to “refresh the world, inspiremoments of optimism and happiness, and to create value and makedifference”.5On the other hand, the vision’s framework is composed of the 5 Ps.These are People, Portfolio, Partners, Planet, Profit andProductivity. Through this, the company aims to achieve sustainablegrowth and to accomplish its core objectives. Coca Cola’s code ofbusiness conducts guides and informs its corporate culture, and hashelped it to maintain a positive social, economic and environmentalimage.6
A study conducted in 2014 indicated thatCoca-Cola is one of the world`s most recognized brands. 7Many people recognize the company’s products with its signaturelogo, which is designed using classic red and white colors.
Figure1: The famous Coca-Cola logo.
Over the years, it has used this brandrecognition advantage to beat competitors in the retail stores. Atthe same time, the company’s marketing department has been able toachieve brand recognition expansion by venturing into the world ofsports. Coca-Cola sponsors some sports activities, among the mostpopular being the English football second division and the FIFA WorldCup.8Looking into the near future, the company’s financial resourcesought to serve its big marketing effort, as the company looks to makeits brand even more popular.
Strong Distribution Network
As of 2015, Coca-Cola was selling itsproducts in more than 200 countries.9This unquestionably makes it one of the largest distribution networksin the world. Additionally, the company can control its distributionchannel profitably, opening up more avenues for others. Coca-Cola hasan institution-based system of independent bottling and distribution,as such, increasing distribution efficiency.
One of Coca Cola’s most importantresources is water. The company, as such, depends on the availabilityof clean and sustainable water sources to support its manufacturingneeds. In many parts of the globe, including some places whereCoca-Cola operates, sustainable water sources continue being a majorsetback to production. Additionally, given the operating nature of amanufacturing company, water pollution is almost an inevitableproblem. The company continues to incur high costs of environmentalcharges, which limits its revenue generation.
Foreign Currency Fluctuation
The global business currency is the U.Sdollar. This means that the company has to incur expense andliabilities that are associated with currency fluctuations incountries that do not use the U.S dollar. Given that, the companyreceives almost half of its revenue from countries that do not usethe U.S dollar, their inflations trends have a big impact on the netrevenue collected.
The global population is growing steadily.This means that the customer base for soft drinks is increasing at abig rate. Coca-Cola operates in some areas with the biggest humanpopulation, such as India and Asia. These countries’ economies haveramped up the demand for the company’s existing and upcomingproducts. As such, the company ought to serve this surging demand andmake more returns from them. According to Collier, 10Coca-Cola has the potential of differentiating its portfolio anddelivering to the expanding marker, making this a growth opportunityfor the company.
The company has been utilizing its assetsto build a presence in the ever-expanding soft-drink business. As apresent, the company has been taking over smaller brands, such asKeurig Green Mountain and Monster Beverage, taking up stakes ofcomfortable percentages, that enable it to control the soft drinkbusiness.11Such deals have given Coca-Cola an opportunity to extend its reach inthe market. There plans to diversify into other businesses such ascoffee and energy, which will boost the company’s net revenue.12
There are some companies that do notcompete directly with Coca-Cola. These include Starbucks and DunkinBrand.13These companies offers the customers with healthier and more diverseoptions, hence gaining their loyalty. Industry projections suggestthat such indirect competition poses a major threat to all soft-drinkcompanies, Coca-Cola included.
Over the last few years, nutritionalawareness, fueled by global health campaigns, have proved to be amajor setback for all soft drink companies.14There is a popular shift from organic products, which is boosted bysocial knowledge on the effects of manufactured chemicals. Peopletend to take more nutritionally healthy drinks, such as fruit juices,water, and milk. By doing this, soft drink companies, Coca-Colaincluded, are on the verge of losing even the loyal customers.
-Strong distribution network
-Foreign currency fluctuations
External forces and trends considerations
-Legal and regulatory
Internal forces and trends considerations
-Processes and systems
Figure2: SWOT Analysis
The company has a separate internationaldivision’s structure.15This is because the growth and control strategy was devised to havedivisions operate independently, without being under direct controlof the head office. Across the globe, the company has variousdivisions. All these divisions have presidents that control eachaspect of the organizational operations. In total, there are fivecontinental divisions. They are: –
North America Group
Latin America Group
Eurasia and Africa Group
Besides the presidents, each of thesegroups has vice presidents, who are in control of sub-divisions.These subdivisions are based upon countries and regions. According toRobbins et al., this organizational structure is efficient, given thesize of the company.16The diagram below is a graphical representation of Coca Cola’sorganizational structure.
Figure3: The Coca-Cola organizational structure.(Coca Cola, 2015)
While evaluating the company’sorganization structure, there is need to pay attention to its globaland local strategies. On the global scale, the corporate segment ismade up of an executive committee of 12 officers.17This committee handles formulating corporate strategies, and givingdirections on major company decisions. On a local scale, Coca-Colahas units that are in charge of marketing and promotion.18These serve the purpose of driving the company’s business at thecountry and regional level.
The Coca-Cola system does not operate onits own. It uses the external organization for the purpose ofbottling and distribution, in what is commonly known as the“Coca-Cola system.”19This kind of organizational structure has helped the company toachieve unmatched efficiency in quality and service.
According to its official website, thecompany has a strong believe that its success is based on theiremployees’ satisfaction. 20The company has specific practices that are put in place to ensurethat its massive labor force is motivated, to keep them satisfied andresourceful. One of the unique employee motivation strategies thatCoca-Cola uses is communication that leads to results.21The company’s management has developed and implementedcommunication channels that enable the employees to communicate theirfeelings and opinions to the leaders to have them addressed. Thecompany also has a continuous training and mentoring program, whichallows the employees to have the opportunity to grow their skills andbe more resourceful. At the same time, the company gives itsemployees short-term assignments to help them develop their skills.While some of these programs are local, some them include expatriateassignments.
Thecompany also uses a financial reward system to motivate itsemployees.22Every other year, the company’s human resource departments reviseemployee performance details, helping them to identify employees whoneed rewards, based on their output. At the same time, the company’semployees receive travel packages and gift merchandise. There arealso tuition reimbursements for their children and spouses. At thesame time, the company has an energizing environment to motivate theemployees on a daily basis.23The employees have free access to dry-cleaning, free parking,cafeteria and recreational facilities, which include gyms andrefreshments. This, together with other innovative strategies, keepsthe Coca-Cola employees motivated.
The analysis has established that there aresome specific threats that hinder the company’s growth. One of themost pertinent issue regarding expansion is substitute products.Given that the customers are turning away from manufactured products,the company needs to invest in organic products, for instance, milk,and fruit juices. As such, it is recommended that the company reducesits production of products such as diet coke and Kinley Soda. At thesame time, it is wise for the management to invest more in futuregrowth, for instance, by developing its skilled labor throughinvesting in educating talents from across the world. It is alsoadvisable for the company to study the external environments moreclosely, and devise strategies to gain a competitive advantage. Thisis in the realization of the stiff competition brought by rivalcompanies such as Pepsi and Nestle.
Coca-Cola is one of the world’s leadingbrands. It has a turnover of tens of billions of dollars every year,which also makes it one of the most profitable organizations in theworld. Coca-Cola’s corporate culture draws upon satisfying theinterests of the stakeholders and serving communities diligently.Using six pillars to support its moral and cultural values, thecompany has been able to maintain a positive image in the industry.Its main strengths are brand awareness and a strong distributionnetwork. While the company is working to improve by maximizing on itsopportunities, there are specific industrial threats that limit itsexpansion. However, the company has a strong organizationalstructure, which has independent divisions, that help it to maintainits global success. While there are some areas that the company canwork upon to improve, there are some that are beyond reach,especially those that affect the soft drink industry as a whole.Regardless, by implementing the recommendations given in the paper,the company will be set to expand its global reach, and consequently,improve its profits.
Coca-Cola UK. AboutUs. Accessed October 9, 2015,http://www.coca-cola.co.uk/about-us/our-people/
Coca-Cola.“Our Company”. Coca-Cola.http://www.coca-colacompany.com/our-company/mission-vision-values(Accessed October 9, 2015).
Collier,Karen A. "A Case Study on Corporate Peace: The Coca-ColaCompany: Coke Studio Pakistan." Business,Peace and Sustainable Development 2014,no. 2 (2014): 75-94.
Harris,Nick, “FIFA Handed Ultimatum by $30m a Year Sponsors Coca-Cola OverReform Plans,”, DailyMail, July18 2015, accessed October 9 2015,http://www.dailymail.co.uk/sport/sportsnews/article-3165850/FIFA-handed-ultimatum-30m-year-sponsors-Coca-Cola-reform-plans.html
Kenwell, Ben, “Cramer: Coca-Cola Needs toBuy Monster Beverage, Keurig Green Mountain,” TheStreet, July 11, 2014, accessedOctober 9, 2015,http://www.thestreet.com/story/12901277/1/cramer-coca-cola-must-buy-monster-and-keurig-green-mountain-to-grow.html
Merrett, Neil, Merrett, “Coca-ColaOutlines Coffee Diversificationn Plan,” BevarageDaily, March 27, 2008, accessedOctober 9, 2015,http://www.beveragedaily.com/Markets/Coca-Cola-outlines-coffee-diversification-plan
Murray,Peter, Peter Murray, David Poole, and Grant Jones. 2006. Contemporaryissues in management and organisational behaviour.South Melbourne, Vic: Thomson Learning.
O’Connell, Ainsely, “The Top 10Business Rivalries in History,” FastCompany, n.d, accessed October9, 2015,http://www.fastcompany.com/3048493/lessons-learned/the-top-10-business-rivalries-in-history
Pendergrast,Mark. ForGod, country, and Coca-Cola: The definitive history of the greatAmerican soft drink and the company that makes it.Basic Books, 2013.
Powell,Lisa M., Rebecca M. Schermbeck, Glen Szczypka, Frank J. Chaloupka,and Carol L. Braunschweig. "Trends in the nutritional content oftelevision food advertisements seen by children in the United States:analyses by age, food categories, and companies." Archivesof pediatrics & adolescent medicine 165,no. 12 (2011): 1078-1086.
Rani,Bina, Raaz Maheshwari, Ankita Garg, and Magan Prasad. "Bottledwater–A global market overview." Bull.Environ. Pharmacol. Life Sci 1,no. 6 (2012): 01-04.
Robbins,Stephen, Timothy A. Judge, Bruce Millett, and MareeBoyle.Organisationalbehaviour.Pearson Higher Education AU, 2013.
Strand,Robert. "The chief officer of corporate social responsibility: Astudy of its presence in top management teams." Journalof Business Ethics 112,no. 4 (2013): 721-734.
The Coca-Cola Company. “Code of BusinessConduct”. Coca-Cola.http://assets.coca-colacompany.com/45/59/f85d53a84ec597f74c754003450c/COBC_English.pdf(Accessed October 9, 2015).
The Coca-Cola Company. “coke usesinnovation to boost brand value, retains no. 3 spot on interbrandranking”.http://www.coca-colacompany.com/coca-cola-unbottled/coke-uses-innovation-to-boost-brand-value-retains-no-3-spot-on-interbrand-ranking(Accessed October 9, 2015).
The Coca-Cola Company. Careers.Accessed October 9, 2015,http://www.coca-colacompany.com/careers/benefits-and-rewards
TheCoca-Cola Company. OurCompany Workplace. AccessedOctober 9, 2015,http://www.coca-colacompany.com/our-company/diversity/workplace-culture
The Coca-Cola Company. OurConpany Workplace. AccessedOctober 9, 2015,http://www.coca-colacompany.com/our-company/employee-engagement
The Coca-Cola Company. PressCenter. Accessed October 9,2015,http://www.coca-colacompany.com/press-center/press-releases/coca-cola-and-steve-harvey-partner-to-motivate-moms-and-teens-through-the-new-coca-cola-pay-it-forward-academy
The Coca-Cola Company. TheCoca-Cola System in Japan Publicizes Informaiton on our CorporateActivities Under the Structure Outlined Below. Pdf.http://assets.coca-colacompany.com/1f/1b/242f67ee494f94c86e2cc91f1d44/2010_japan_english.pdf
-Strong distribution network
-Foreign currency fluctuations
External forces and trends considerations
-Legal and regulatory
Internal forces and trends considerations
-Processes and systems
11. Mark Pendergast, For God, country, and Coca-Cola: The definitive history of the great American soft drink and the company that makes it (Basic Books, 2013), 12.
22. Mark Pendergast,For God, 13.
44. The Coca-Cola Company. Our Company Workplace. Accessed October 9, 2015, http://www.coca-colacompany.com/our-company/diversity/workplace-culture
55. Coca-Cola: Our company.
66. The Coca-Cola Company. Code of Business Conduct.
77. The Coca-Cola Company. Coke uses innovation to boost brand value, retains No. 3 spot on interbrand ranking.
88. Nick, Harris, “FIFA Handed Ultimatum by $30m a Year Sponsors Coca-Cola Over Reform Plans,”, Daily Mail, July 18 2015, accessed October 9 2015, http://www.dailymail.co.uk/sport/sportsnews/article-3165850/FIFA-handed-ultimatum-30m-year-sponsors-Coca-Cola-reform-plans.html
99. Pendergast, 9.
1010. Karen Collier, “A Case Study obn Corporate Peace: The Coca-Cocal Company: Coke Studio Pakistan.” Business, Peace and Sustainable Development 2014 2(2014): 75-94.
1111. Ben Kenwell, “Cramer: Coca-Cola Needs to Buy Monster Beverage, Keurig Green Mountain,” The Street, July 11, 2014, accessed October 9, 2015, http://www.thestreet.com/story/12901277/1/cramer-coca-cola-must-buy-monster-and-keurig-green-mountain-to-grow.html
1212. Merrett, Neil, “Coca-Cola Outlines Coffee Diversificationn Plan,” Bevarage Daily, March 27, 2008, accessed October 9, 2015, http://www.beveragedaily.com/Markets/Coca-Cola-outlines-coffee-diversification-plan
1313. Ainsley, O’Connell, “The Top 10 Business Rivalries in History,” Fast Company, n.d, accessed October 9, 2015, http://www.fastcompany.com/3048493/lessons-learned/the-top-10-business-rivalries-in-history
1414. Lisa Powell et al., “Trends in the Nutritional Content of Television Food Advertisement Seen by Children in the United States: Analyses by age, Food Categories, and Companies”, Archives of Pediatrics & Adolescent Medicine 165 (2011): 1078-1086.
1515. Peter Murray, Poole David and Grant Jones, Contemporary Issues in Management and Organizational Behavior (Mason, OH: Cengage Learning, 2006), 32.
1616. Stephen Robbins, Judge Timothy and Maree Boyle, Organizational Behavior (Pearson Higher Education AU, 2013), 45.
1717. Robert, Strand, “The Chief Officer of Corporate Social Responsibility: A Case Study of it Precense in Top Management Teams,” Journal of Business Ethics 112(2013): 722.
1818. Bina Rabni et al, “Bottled Water-A Global Market Overview,” Bull. Environmental Pharmacology, 6(2012): 2.
1919. The Coca-Cola Company. The Coca-Cola System in Japan Publicizes Informaiton on our Corporate activities Under the Structure Outlined Below. Pdf. http://assets.coca-colacompany.com/1f/1b/242f67ee494f94c86e2cc91f1d44/2010_japan_english.pdf
2020. Coca-Cola UK. About Us. Accessed October 9, 2015, http://www.coca-cola.co.uk/about-us/our-people/.
2121 The Coca-Cola Company. Our Company Workplace. Accessed October 9, 2015, http://www.coca-colacompany.com/our-company/employee-engagement
2222. The Coca-Cola Company. Careers. Accessed October 9, 2015, http://www.coca-colacompany.com/careers/benefits-and-rewards
2323. The Coca-Cola Company. Press Center. Accessed October 9, 2015, http://www.coca-colacompany.com/press-center/press-releases/coca-cola-and-steve-harvey-partner-to-motivate-moms-and-teens-through-the-new-coca-cola-pay-it-forward-academy