Case Study of Coca Cola’s Changes of Product
Q?? Write a Case Study analysis on Coca Cola’s Changes of Product ??
Solution asked::
Company overview
Coca-Cola is recognized as the leading manufacturers of carbonated drinks in the word, and one of the famous valuable brands in the world. The company‘s headquarter is in Atlanta, USA. Coca-Cola advertising all over the world, the company attaches importance to the international market. Since 1894, Coca-Cola was for the first time, sold in bottles, along with the first outdoor wall advertisement in Carterville, Georgia (Coca-Cola. Company), and the first advertisement for the belly-wash become the number one as the same year on may 29, in the Atlanta Journal(Coca-Cola, company). The coca-cola company, as the largest soft-drink in the world, the company has more than 500 kinds of products. Coca-Cola is famous for selling coca-cola, Diet coke, Sprite, Fanta. In recent years, Coca-Cola has also responded to the growing consumer better healthy living, which is why they have started carbonated beverage brands, libel diet-coke, minute maid juice, powerful sports beverage.
History
The coca-cola company is a beverage retailer, is started in 1886 by pharmacist Johh Pemberton, the company is best famous for its flagship product coca-cola. In 1889, Atlanta businessman As a Griggs Candler was bought the coca-cola formula and brand, regarded as an industrial and builder in 1892. 1893-1904, coca-cola is enjoyed in the United stated..1905- 1918., Coca-cola is enjoyed in 8countries worldwide. 1919-1940 coca- cola is enjoyed in 53 countries worldwide. In 1919, Eintst-Woodruff used 250 million had bought coca-cola company from the heirs of Asa kandler, to 1923, his son Robert W. Woodruff, he is the one of the most important figures in coca-cola history. His idea made coca-cola not just a huge success, but also a just part of people’s lives, that is he pushed development and distribution of the six-pack, the open top cooler, his other innovations make it easier for people to drink Coca-Cola at home or take away. From 1960-1981, after 70 years of success with one brand, there has many new flavors, like Fenta. After From 2000 Until now Coca-Cola is committed to local markets, paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it. With its bottling partners, the Company reaches out to the local communities it serves, believing that Coca-Cola exists to benefit and refresh everyone it touches. (Coca-Cola Company)
Key pressures for the change
Fashion pressure
Fashion Pressures refer to the stress of implementing fashionable management changes. These mimetic changes that contain: changing the culture of organization, establishing training or learning unit in corporation, as well as providing CEOs major freedom to manage their business (Palmer, Dunford & Akin 2009). The innovation for other markets and the restructure of business process are the focuses of making the changes. In recent, the trend of global drink industry has been changed. There are two of the most significant trends in consumer, the first is that the increasing demand for the product which can meet their health and fitness needs; and the second is that the increasing requirement for the environment-friendly product to live in a less environmentally damaging lifestyles. However, the image of Coca-Cola is related to action, passion and youth but not with health or environmentalist in current. Therefore, Coca-Cola has to form the innovative culture in order to develop its strength and to go through this ‘Fashion Pressure’.
Reputation and credibility pressure
There are numerous criticisms of Coca-Cola for a decade. Such as the cause of unhealthy, the large use of pesticides in its products has damaged the environment and so on. Therefore, Coca-Cola provided $500,000 grant and partnered with American Academy of Family Physicians in order to help the quality of healthy-lifestyle education (Health Care Renewal, 2009). These actions can be regarded as an effort of the company to improve its social image and maintain corporate reputation and credibility with stakeholders. This shows the reputation and credibility pressure, according to Palmer, Dunford and Akin (2009), this change is related to keep the appropriate corporate governance mechanisms to guarantee an active corporate reputation. The corporate reputation refers to the ‘collective representation of a firm’s past actions and results that describes the firm’s ability to deliver valued outcomes to multiple stakeholders, but the important corporate asset, being positively correlated with organizational performance, maintaining and enhancing corporate reputation is therefore an important part of managing firm survival’ (Palmer, Dunford & Akin 2009).
Growth pressure
In 2005 Annual Report of Coca-Cola, the company served approximately 1.5 billion drinks everyday, and this number has increased to 1.6 billion in 2010. It sells beverage servings in more than 200 countries (Coca-Cola Annual Report). However, there is a strong competitor exist- Pepsi. It reported that Coca-Cola and Pepsi controlled almost 40 per cent of the entire drink market. They all diversified in the beverage market, and Pepsi has a stronger competitive advantage in sports drink market. Thus the rivalry between Pepsi and Coke is very intensive. In this perspective, the leader of Coca-Cola search for other markets to grow. It could be the collaboration or merger with other companies. This can be viewed that Coca-Cola has ‘Growth Pressures’, which is the growing of challenge and finding the way of maintaining the entrepreneurial vision of the organization (Palmer, Dunford & Akin 2009).
Diagnosis process
It is conceivable to utilize various images and perspectives of change in relate to Coca Cola Corporation and its pressures as analyzed above. Palmer Dunford and Akin (2009) points out that the use of image relies on the type of change, the phase of change, the context of change and the simulaty simultaneous involvement in divers changes (Palmer et al., 2009).
It is essential to figure out what have to be changed after accounting for the needs of organizational change. There are amount of theories and models are available for making the diagnosis of organizational change. In our report, we choose to use the “PESTLE Framework” and “The Star Model” to characterize the Coco-Cola Corporation.
PESTLE Framework
PESTLE analysis becomes more and more popular method that focuses in the external factors of the business and the environment where it handles. PESTLE consists of six elements including: Political, Economic, Sociological, Technological, Legal, and Environmental. All of them canvass the changes in the marketplace.
Political Analysis
Political analysis canvasses the current and potential influences from political pressures. The non-alcoholic beverages falls in the category under the FDA and the government plays a role within the operation of manufacturing these products. In the regulations, the government has the ability to fines the companies that did not meet their criterion law requirement.
The laws and regulations, such as accounting standards, taxation requirements, environmental laws and foreign jurisdictions might affect the book of the company and their entry in foreign country. In addition, the changes in the nature of business as soft-drink can achieve competitive product and pricing problem and the ability to improve or keep the share in sales in global business market as a result of action by competitors.
The political conditions in one country are also basis on the research, especially in domestic markets and other governmental changes that affects their ability to penetrate the developing country and emerging markets that affect the political and economic conditions change. However, Coca Cola continuously monitoring of policies and prescript set by the government.
Economic Analysis
Economic analysis assesses the local, national and world economy which part is also including economic recession and inflation problem. The soft- drink beverage industrial has a higher sale in outside the country. In conformity to the Standard and Poor’s Industry surveys, “For big soft drink companies, there has been economic problem need to improvement in many major international markets, such as Brazil, Japan, and Germany.” These markets will continue to play a major role in the success and steady growth for a majority of the soft -drink beverage industry. The carbonate drinks have a low growth in Coca Cola’s main market. The market recorded growth in 2004, but just only 1% in North America.
Sociological Analysis
This analysis method, it will affect social change, such as changes in lifestyle and the intention of market organization. From the ages of 37 to 55 consumers are also increasingly concerned about nutrition. Since many are reaching an older age in life they are becoming more worry with increasing their health. This will continue to increase overall demand about coca-cola and in the healthier soft-drink. Therefore, reduction of income because of coca-cola carbonated beverage.
Technological Analysis
Technology is the important point of the analysis where the emerging technological and technology are valued. This has resulted for new products and product improvements opportunities in terms of marketing. As the technology development, new products are introduced into the global market. The advancement in technology led to the cherry coke was founded in 1985, but consumers still prefers the traditional taste of the original coke.
Legal Analysis
Legal factors pay attention on the impact of the national and world legislation. For example, the behaviors of many companies are influenced by the significant legal changes in China. Such as, the increase of minimum wages, etc. The relatively recent laws (new Chinese labour contract law) have influence on the organization’s actions. Moreover, the cost of a company also can be impacted by the legal changes. It could be the development of new systems or procedures (Chinese labour contract law, 2008).The Coca Cola Corporation receives all the rights acceptable in the nature of their business. In addition, every inventions and developments of product are normally going into the patented process.
Environmental Analysis
Environmental factors focus on the issue of environment in the local, national and world wide. Since the early 2000s, the criticism of Coca Cola has increased because of the use of pesticide, water and packing which have polluted the environment. This damages the image of the corporation significantly. Thus, Coca-Cola finds some solutions in order to reverse its social image. The corporation introduces ‘PlantBottle’ to the public, this innovation in its packaging which made form more than 30 per cent of plant-based material and can 100 per cent recyclable. According to the report of the company, all facilities of its own are strictly controlled by regarding to the environmental laws that are imposed by the government (coca-cola.com).
The star model
Strategy
The culture of Coca-Cola Corporation is mission driven; therefore, the company has been guided by refreshing the world, creating value and making a difference, as well as inspiring moments of optimism and happiness (thecoca-colacompany.com). As the corporation has the rich history, it is easy for them compiling a number of stories of their customers and staffs (McLellan, 2006).
Structure
The structure policies in organization can be divided into distribution, specialization and departmentalization. The Coca-Cola Corporation’s structure has specific characters which contain both mechanistic and organic models. And the mixing of these types of structure seems to be consummated for the company. The company has a more centralized structure for a long period; however, it has changed towards decentralization in recent years. It has been regarded with the hierarchy of the organizational structure (Reuters.com)
Processes and Lateral Capability
The Coca-Cola’s decision making process used to not suit for the corporation’s mission, vision, value and structure. On the one hand, the hierarchy structure lead to the centralization of the process. On the other hand, the corporation has an organic structure, creative values and mission as well as involved employees. The new CEO in 2004, Neville Isdell implemented a complex integrating mechanism to cope with the issues. The decision can be made by face-to-face meetings in regular, this overhaul of intranet ensure the sharing of information on time (Fox, 2007).
Reward Systems
The performance system plays the major role in determining the training, promotion and compensation. The rewarding system in Coca Cola might focus on motivate, retain and influencing its employees contribute to organizational goals. The rewards are relating with the employee’s performance, such as the increase of productivity or effectiveness (HUMAN RESOURCE PROJECT).
People Practice
In the staffing and selection policies, Coca Cola recruits employees on account of talent, integrity character, potential, education background, and work experience. Both optional and required training programs will be provided to the employees constantly after selecting. In addition, the criteria of other rewards and promotion will establish. Coca Cola supports local hiring the positions of management on worldwide.
4. Chronological account of how the organisational change unfolded over timE
This problem was issued in the European marketing department in 2005 that to ensure it can identify and address any potential problems with its employees.
It has been solved that The Coca Cola Company needed to create a formal talent pipeline for marketing staff globally. Moreover, The Coca Cola decided to partner with psychometrics and development specialist and the two companies designed a tailored- two-day development centre and spent each centre around £36,000 (Martindale 2008).Aug 2010
Climate Change Management
According to The Coca Cola Company statements that “our new environment management system, eKOsystem, is being implemented across our business enterprise to address and reduce local impacts on the environment”. (The Coca Cola Company n,d.) Therefore, The Coca Cola corporation has poured $ 70 million into cleantech venture funds managed by Element Partners and RockPort Capital Partners(Urvaksh 2011)
‘Live Positively’. This is not marketing and slogan but this is one of the important managements of the Coca Cola Company’s promise with all their customers that provide for changing better environment since 2007.Sep 2010New Product Management
Based on the customer’s new health products demand that The Coca Cola Company launched ‘Coca-Cola Zero’ and ‘Diet Coke in 2005. Given that, they sold more than 600 million cases globally in 2009 and it has been one of the most successful product launches in their history (The Coca Cola Company n,d.).
Change strategies used in response to the problems
External Changes- Green Environment
Today, one of the biggest and most important world trends is Green Environment such as saving energy, protection of the environment or creating new green technology.
The type of change management for The Coca Cola Company is considered as second bar that the company decided to invest $ 70 million into cleantech venture funds. According to its recent sustainability report that the company uses 2.47 litres of water for every litre of drink it produces. Hence, Coca Cola has already seen a 2 percent improvement in water efficiency since 2006 and is undertaking initiatives to refund the same amount of water that it uses to communities or nature with the World Wildlife Fund. Moreover, the company has tried to be minimized and avoided any harm for the green environment from distributions, selling products, production and creating new products. This is a good example of the company’s strategic management that has cooperation with Wall-Mart. When customer returns an empty bottle to Wall-Mart then they provide a T-shirt which remakes from the plastic bottle in US. And they also provide a shopping basket in Japan as well.
Furthermore, Coca Cola announced “Plant Bottle” which is made with a plant and has got positive reputations in Asia. Thus, the company can reduce consumption of plastic bottle though the innovation technology.
The company is also targeting energy efficiency. Despite their production volume increased by 6 percent between 2006 and 2007, but the Coca Cola Company has increased energy consumption by only 2 percent. As a result, the company’s energy efficiency of its operations has improved by 4 percent over the same period. (Energy Efficiency news 2008).
Resource: Join the Evolution
Internal Changes- Health and Fitness
Obesity by countries
Source: NationMaster.com
Another main trend is Health today that people invest more and more in health and fitness. In times past, people only thought about what they could have for their meal but as the world economy developed, people have started care of their health and products and services are promoted that personal well-being are all the rage in the world now.
Companies like Coca Cola and McDonald’s are forced to change because of trends that affect their business in a negative way. Given that, McDonald’s is already created a new menu which is a salad. Coca Cola is traded on the New York Stock exchange and its stock price has declined about fifty percent over that last eight years that from $90 in 1998 to $45 currently (NASDAQ)
As it mentioned above, The Coca Cola Company has launched low sugar products such as ‘Coca-Cola Zero’ and ‘Diet Coke’ in 2005. Since then, sales volumes of those products are increasing steadily and more customers want to have non calories or low sugar products and as it shown below that Coca Cola Zero is achieved no. 1 selling in the Netherlands in 2008.
Coke Zero no. 1 in the Netherlands
Source: Sounds + Food ‘n’ Retail
Role played by key players inside and outside the organisation
Source: Cogmap.com
Muhtar Kent who is a CEO of the Coca Cola Company, held the position since in 2009. He brought new vision that the key word is ‘sustainability’ until 2020. Muhtar stated “this is our roadmap for winning together with our bottlers” (Andrew 2010). In the past times, the company more focused on production and sales volume but they have selected water in the environmental space. He strongly believed that this is really good opportunities to reduce their cost of production and they can spend more money on their brand.
An Overall evaluation of the change
The ability to adapt quickly to sudden changes in the environment is a prerequisite for long term survival. Given that, The Coca Cola Company is one of the world pioneers of changing management style and creating new product as well.
As it mentioned above, the company has developed competitive items that match changes in consumers’ needs and firms have to be responsive to consumer demand. And in that sense, The Coca Cola Company is very flexible and unique that created low sugar products, established new marketing centre and adapted themselves quickly to the new world trend. For those reasons, The Coca Cola has ability to race with their competitors and pulls ahead in the competition.
Conclusion
The conducted business research on The Coca Cola Company in this case study report has proven its changing management process and has critically evaluated all of its success factors. Various sources of avenue that used by change management can result different effect of the business development. Therefore, it is necessary to have well understanding and pay attention on the change management that was used. Both of the external change such as the changing consumer needs and society, and the internal change such as the new product, will influence the sales volume of the product and change management style.
If you want Marketing management Assignment Help study samples to help you write professional custom essay’s and essay writing help.
Receive assured help from our talented and expert writers! Did you buy assignment and assignment writing services from our experts in a very affordable price.
To get more information, please contact us or visit www.myassignmenthelp.Com
