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Coca Cola And Why They Are Successful
In this article you will find Coca-Cola’s mission statement and/or objective, which nations it produces and markets in. Whether it is decentralized or centralized. How Coca-Cola adapts to different markets. What type of organizational structure they have and what type of international strategy they follow. And how they make use of work teams.
1. What is the company’s mission statement or overriding objective?
Coca-Cola was created on May 8, 1886 , by Dr. John Stith Pemberton. Dr. Pemberton sold portions of the business to various partners and in 1892; Mr. Asa G. Candler became the sole owner of the Coca-Cola Company. The first Coca-Cola bottling plant opened in 1899 in Chattanooga , Tennessee . There are approximately 80 authorized bottler ownership group in the North America Coca-Cola system (www2.coca-cola.com, 2003).
The Coca-Cola Company’s Mission statement is:
· To Refresh the World…in body, mind, and spirit.
· To Inspire Moments of Optimism…through our brands and our actions.
· To Create Value and Make a Difference…everywhere we engage.
The Coca-Cola Company’s Vision for Sustainable Growth is:
· Profit: Maximizing return to shareowners while being mindful of our overall responsibilities.
· People: Being a great place to work where people are inspired to be the best they can be.
· Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples’ desires and needs.
· Partners: Nurturing a winning network of partners and building mutual loyalty.
· Planet: Being a responsible global citizen that makes a difference.
The Coca-Cola Company’s Values are Leadership, Passion, Integrity, Accountability, Collaboration, Innovation, and Quality (www2.coca-cola.com, 2003).
2. In which nations does it produce and markets it products?
The Coca-Cola Company opened its first international bottling plants in 1906 in Canada , Cuba , and Panama . The company now produces over 400 brands in over 200 countries. Before the products can be consumed, they have to be produced, packaged and distributed. The Coca-Cola Company’s bottling partners are local companies in the countries; some are independently owned, and some are partially owned by the Coca-Cola Company. There are over 200 Coca-Cola bottlers and bottling facilities worldwide, with thousands of sales and distribution centers that employ over 4 million people, either directly or indirectly.
Countries listed on the Coca-Cola website: The United States of America, Argentina, Armenia, Australia, Austria, Bahrain, Brazil, Cameroon, Canada, Chile, China, Colombia, Ecuador, New Zealand, Fiji, Tahiti, Samoa, Finland, France, Georgia, Germany, Ghana, Great Britain, Hellas (Greece), Hungary, India, Indonesia, Israel, Italy, Japan, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyzstan, Lebanon, Macau, Malaysia, Mexico, Morocco, The Netherlands, Nigeria, Norway, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, Singapore, Slovakia, Spain, Sri Lanka, Switzerland, Taiwan, Thailand, Tunisia, Turkey, United Arab Emirates (UAE), Uzbekistan, Venezuela, Vietnam it, West Bank-Gaza, Yemen, Zimbabwe
3. Are its production facilities centralized or decentralized?
The Coca Cola Company was founded in 1886. Its headquarters are in Atlanta , Georgia with local operations in over 200 countries around the world. E. Neville Isdell is the Chairman and CEO . This centralized company is made of a Board of Directors, Executive Committee, Operating Group Leadership and Corporate Functional Leadership.
The Coca Cola Company opened its first international bottling plant in 1906 in Canada , Cuba and Panama . In 1939 they opened a few in New Zealand . Then Fiji , after many years of receiving the Coca Cola products from New Zealand , started producing in 1972. The Coca Cola Company also has a few bottling companies in Pakistan since 1953. This company continues to expand throughout the world after these many years of success through the talented and highly experienced worldwide management team.
The bottling facilities are local companies in the foreign country of which are partnered with Coca Cola. Some of these bottling companies are independently owned and some are partially owned by Coca Cola. But either way, the worldwide management team makes sure that all of these companies producing the Coca Cola product follow The Code of Business Conduct Procedural Guidelines. Besides these guidelines, each company must follow Coca Cola’s Mission Statement; to refresh the world, in body, and spirit; to improve moments of optimism through our brands and our actions; and to create value and make a difference everywhere we engage. By having the same policies for all the companies to follow makes the transition in transferring managers from one location to another run smoothly.
The Coca Cola Company is a centralized company because it makes operating the international subsidiaries more efficiently. Although there are managers in all of these facilities which will make decisions of hiring employees and local decisions, major decisions are made from headquarters. Centralization is what has made Coca Cola a sought after company for employment around the world.
For instance, they have an energy drink called Samurai. This drink is available only in Vietnam . Another energy drink called KMX available only in Puerto Rico and the United States however, the original Coca-Cola drink is not adapted for different markets. The original Coca-Cola drink is in virtually every part of the world. Also, where Coca-Cola C2 can be found in Canada , Cayman Islands , Japan , Puerto Rico , Virgin Islands and the United States , the Diet Cola sweetened with Splenda is only in The United States. (www2.coca-cola 2003)
4. Does Coca-Cola standardize products or adapt them for different markets?
In today’s business world, product standardization is becoming much more prevalent as large companies try to capture a large market share for the least amount of work. In many cases, this will not always work because around the world there are many different cultures with differing tastes and preferences (Wild, Wild, Han, 2006). The Coca-Cola company has found ways to blend both product standardization and also adapt many of their products to the unique preferences of local markets around the world.
The Coca-Cola Company does not produce the entire beverage that consumers see on store shelves. The company itself only makes a concentrates syrup mixture that it sells to many independent bottling companies around the world. The bottlers then combine the syrup with water and sugar to make the final drink. Local bottlers can adjust the sweetness to the preferences of consumers in their region (Wikipedia, 2006). This gives Coca-Cola a unique advantage. They can produce a standardized formula and distribute it around the world, while local bottlers adjust it for their consumers. In a sense, giving the company the production efficiency of a standardized product as well as meeting the needs of local markets through the work of the bottlers.
In addition to the ubiquitous Coca-Cola soft drink, the company provides over 400 brands, many of which are products available only in certain areas of the world. For example, in Mexico ready-to-drink milk products made by the Coca-Cola owned Minute Maid brand are sold. In Japan, a water beverage called Aquarius Active Diet is popular (www2.cocacola.com, 2006). In recent years the company has also begun to take a more regional approach to advertising. In 2002, it was announced that the widely used “Life tastes good” phrase would be replaced with phrases tailored to reach region (www.poststone.com, 2002). Overall, the Coca-Cola Company has found ways to incorporate product standardization and at the same time adapt to various cultural needs.
5. What type of organizational structure does Coca-Cola have?
Organizational structures are a way in which a company divides its activities among separate units and coordinates activities between those units. The structure of a business can affect the way it works and performs. There are many different types of structure.
The Coca Cola Company has an international division’s structure. In this structure domestic is separated from international business activities by creating a separate international division with its own manager. In each country, a general manager controls the manufacture and marketing of the firm’s products.
There are some advantages and disadvantages in having an international structure. Some of the advantages is there is more motivation for the manager of the individual units who are able to make more decisions with out asking higher level. Each unit carries out its activities with own department such as marketing, sales, finance, and production. Some of the disadvantages is poor communication between managers one not knowing what the other is doing can damage the business. The other disadvantage is that often managers must rely on the main company for the financial resources and technical know-how that gives the company its competitive edge. (Wild Wild Han international business third ed.)
The Coca-Cola Company utilizes an international area structure. They have organized their global operations through out countries or geographic regions. The Operating Group Leadership has companies and subsidiaries in North America , Africa , East, South Asia & Pacific Rim, European Union, Latin America , North Asia , and Eurasia & Middle East. (www2.cocacola.com 2003)
6. Which of the two types of international strategy does Coca-Cola seem to follow?
The Coca-Cola Company’s marketing strategy is a global one. Although their
Policy has been “one taste worldwide” (Wild, Wild, Han, 2006), the company’s new global marketing platform is “The Coke Side of Life” (Strategiy.com, 2006). The company will be working collaboratively with markets around the world to create a platform that can be adapted to fit each market’s needs (Strategiy.com, 2006). Although The Coca-Cola Company does not have ownership of its entire bottling network, the company produces and sells its syrup concentrate to the various bottlers worldwide. As water, sugar, and sweeteners are added by the bottlers, it has been said that the sweetness of the end product differs in various parts of the world to cater to the local taste (wikipedia.com, 2006).
7. Does the company make use of work teams?
As a part of Coca-Cola’s continuing efforts to better understand and manage the complexities of a changing world and the cultural, economic and political dynamics impacting their business, they have established an International Advisory Council (IAC).
The (IAC) has three clear objectives: 1. For the Chairman and Senior Management team, provide strategic insight.
2. Establishing relationships around the world in government, business and non-profit sectors.
3. To offer targeted solutions for specific issues, apply its insights specific to a particular political, economic or social trend.
Chaired by the Honorable Richard C. Holbrooke, (Vice Chairman Perseus, Former United States Ambassador to the United Nations), the renowned members are from around the world and are also engaged in business, government, diplomacy or other international pursuits. (www2.coca-cola, council 2003)
The company provided a $1.5 million grant in 2001, in a unique partnership with the American Institute for Managing Diversity, and formed the DLA of Atlanta. For their leaders from all sectors of their society: education, government, religion, and nonprofit and for-profit enterprises, this is an innovative experiential learning program. This program includes two sessions per year, bringing leaders together monthly over a five-month period to learn the principles of diversity management, benefit from each other’s knowledge and experience, and work collectively to address the diversity issues and opportunities facing their communities. (www2coca-cola diversity 2003)
Throughout the year regarding their business and business practices, Coca-Cola Company publishes several reports, providing information regarding their operations as well as their citizenship, environmental and workplace principles to consumers and shareowners. (www2.coca-cola.com,companyreports 2003). Their Operating Group Leadership is located throughout the world such as North American Group, Coca Cola International, Africa Group, East, South Asia & Pacific Rim Group, European Group, Latin American Group and North Asia , Eurasia & Middle East Group. (www2coca-cola, virtual vender 2003)
This kind of performance as stated above, requires unprecedented commitment to the principles of integrity and leadership in today’s volatile economic environment (www2coca-cola, our diversity 2003) therefore, in our research of The Coca-Cola Company, they are and will continue to be a successful international business. We feel that The Coca-Cola Company is utilizing to the utmost, the appropriate levels of international involvement and international organizational structure. Also, they have complied with their obligations towards social, cultural, economic, legal and political aspects of doing international business. (Ebert, Griffin Business Essentials p. 102).
References
Coca-Cola (2006). The Coca-Cola Company. Mission; Values; Our Company; Countries. Retrieved from http://www2.coca-cola.com/
Wild, J., Wild, K., Han, J. (2006). International Business (3rd ed.). Upper Saddle River , NJ : Pearson Education, Inc.
Strategiy.com Coca-Cola to launch new global ad campaign. Retrieved from http://strategiy.com/advertising_medianew.asp?id=20060402080955
Wikipedia, the free encyclopedia. Coca-Cola. Retrieved from http://en.wikipedia.org/wiki/Coca-Cola
www.cocacola.com Retrieved from http://www2.coca-cola.com/ourcompany/intl-adv-council-include.html
www.cocacola.com Retrieved from http://www2.coca-cola.com/ourcompany/ourdiversity-include.html
www.cocacola.com Retrieved from http://www2.coca-cola.com/ourcompany/manifest-for-growth-include.html
www.cocacola.com Retrieved from http://www2.coca-cola.com/ourcompany/company-reports-include.html
Ebert, Ronald J., Griffin , Ricky W. (2005) Business Essentials (5th ed)
Chapter 4 Understanding the Global Context of Business
www2.coca-cola.com, retrieved from International Business, The Challenges of Globalization by John J. Wild, Kenneth L. Wild and Jerry C.Y. Han, Chapter 11.
Wild, J., Wild, K., & Han, J. (2006). International business. Upper Saddle River, NJ: Pearson Prentice Hall.
http://www2.cocacola.com/investors/annualandotherreports/2005/companyToday_portfolio2.html
http://en.wikipedia.org/wiki/Coca_cola
http://www.poststone.com/article09.asp
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This intel was contributed by D. STEVENS
D. STEVENS
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May, 2012
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