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Group O2:
Harini Valluri
Soman Nahata
Ankit Jangalwa
Gandharv Raj Sethi
Vishwajeet Narayan
INTRODUCTION
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HISTORY
The Coca-Cola Company was originally established in 1891 as the J. S. Pemberton
Medicine Company, a co-partnership between Dr. John Stith
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Pemberton and Ed
REVENUES
According to the 2005 Annual Report, the company sells beverage products in more than
200 countries. The report further states that of the more than 50 billion beverage servings of
all types consumed worldwide every day, beverages bearing the trademarks owned by or
licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the
trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total
gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales
distributed as follows:
a. 37% in the United States
b. 43% in Mexico, India, Brazil, Japan and the People's Republic of China
c. 20% spread throughout the rest of the world
United States
Mexico, India, Brazil, Japan
and the People's Republic of
China
Rest of the world
In 2010 it was announced that Coca-Cola had become the first brand to top 1 billion in
annual UK grocery sales.
The data for the year 2009 is given in the table below:
drink, using saccharin as a sugar substitute. Introduced in 1963, the product is still sold
today, however its sales have dwindled since the introduction of Diet Coke. The Coca-Cola
Company also produces a number of other soft drinks including Fanta and Sprite. Fanta's
origins date back to World War II when Max Keith, who managed Coca-Cola's operations
in Germany during the war, wanted to make money from Nazi Germany but did not want the
negative publicity. Keith resorted to producing a different soft drink, Fanta, which proved to
be a hit, and when Coke took over again after the war, it adopted the Fanta brand as well.
The German Fanta Klare Zitrone ("Clear Lemon Fanta") variety became Sprite, another of
the company's bestsellers and its response to 7 Up.
During the 1990s, the company responded to the growing consumer interest in healthy
beverages
by introducing
several
new
non-carbonated
beverage
brands.
These
included Minute Maid Juices to Go, PowerAde sports beverage, flavoured tea Nestea (in a
joint
venture
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drink
others.
In
Our Vision
Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.
a. People: Be a great place to work where people are inspired to be the best they can
be.
b. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy people's desires and needs.
c. Partners: Nurture a winning network of customers and suppliers, together we create
mutual, enduring value.
d. Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
e. Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
Productivity: Be a highly effective, lean and fast-moving organization
f.
Work Smart
a.
b.
c.
d.
e.
Be the Brand
Inspire creativity, passion, optimism and fun.
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Shareowners
Employees
Bottling partners
Governmental agencies
Suppliers
Retail customers
Consumers
Local Communities
NGOs
Because each group of stakeholders has a different goal, conflicts arise. The shareowners
are concerned with earning a profit, while local communities care deeply about
environmental issues and labour standards. Suppliers want to charge as much as possible
to create more revenues, and The Coca-Cola Company wants to get the lowest prices to
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ORGANIZATIONAL DESIGN
The Coca-Cola Company realizes that it needs to be able to meet the ever changing
demands of its customers. This is why the company pushed towards decentralization in the
nineties, and even more so recently. The organization has two operating groups called
Bottling Investments and Corporate. There are also operating groups divided by different
regions such as: Africa, Eurasia, European Union, Latin America, North America, and Pacific.
Each of these divisions is again divided into geographic regions. By allowing decisions to be
made on a more local level, the organization can quickly respond to changing market
demands, and higher-level management can focus more on long-term planning.
Certain divisions of the company, such as finance, human resources, innovation, marketing,
and strategy and planning are centrally located within the corporate division of the company.
Some of these functions take place at lower levels in each of the regions of the company;
however, most decisions are made at the top of the hierarchy. For example, in 2002 the
decision to sponsor the World Cup was done at the corporate level. Corporate headquarters,
however, allowed the local divisions to make the advertising decisions. This allowed each
division to specifically design commercials and ads that would appeal to the local market.
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The
complex
integrating
mechanisms
previously
discussed
are
characteristic of an organic structure. The surveys and interviews used by the company
allowed information to flow from the bottom-up, and the intranet allows for information to be
exchanged laterally. The surveys have also caused The Coca-Cola Company to pursue
simplification and standardization. Centralization and high standardization are associated
with a mechanistic structure.
The blending of both types of structures seems to be ideal for the organization. Flexibility is
essential when trying to appeal to such a vast number of independent markets, however,
high standardization is important to remain efficient in production. The use of complex
integrating mechanisms allows for easier coordination for the global company. Centralization
keeps organizational choices aligned with organizational goals. Now that information in the
company is flowing in every direction, upper-management will have access to information
more quickly, adding to the organizations flexibility and responsiveness. The recent shift
towards a more decentralized and organic structure corresponds with the uncertainty of the
organizations environment.
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MD
HR
MANAGERS
MARKETIN
G
MANAGER
FINANCE
MANAGER
PRODUCTI
ON
MANAGER
QUALLITY
MANAGER
ADMIN
MANAGER
FRONT
LINE
MANAGER
FRONT
LINE
MANAGER
FRONT
LINE
MANAGER
FRONT
LINE
MANAGER
FRONT
LINE
MANAGER
FRONT
LINE
MANAGER
WORKERS
WORKERS
WORKERS
WORKERS
WORKERS
WORKERS
For example: the head of the Canadian division reports to the president and COO of the
North American Group. That president reports to the CFO, who reports to the Office of the
General Counsel. The General Counsel then reports to the CEO. It is fair to assume that
there are at least a few more steps in the hierarchy at the local level.
Due to its tall structure, the organization has experienced communication problems. One of
the problems discovered through a survey, was that the people and the company lacked
clear goals. Tall hierarchies also cause motivation problems, which is why the organization is
attempting to get employees more engaged. The increased usefulness of the companys
intranet will greatly increase the communication between every level of employees, and
allow upper management to effectively communicate to the front line employees.
Based on information from Report 2006 this span of control seems somewhat slim for the
CEO of such a large organization. The CEO is also a member of the Senior Leadership
Team. This team consists of each head of the eight operating groups aforementioned, and
also has other top executives in areas like innovation and technology and marketing.
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ORGANIZATIONAL TECHNOLOGY
Currently, output processes are the greatest source of uncertainty for the organization. As
previously stated, The Coca-Cola Company does not produce the end product. Distributors
and bottlers mix other ingredients (mainly carbonated water) with syrups and concentrates
and then sell the products. The Coca-Cola brand name is on the end product, regardless of
who bottles it. The company must keep pressure on the bottlers to maintain high quality
outputs, or it could have negative consequences for The Coca-Cola Company. There exists
very little information about the production of the Coca-Cola syrup. Even at The World of
Coca-Cola, a museum for the company, there is no mention of how the syrup is produced.
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ORGANIZATIONAL TRANSFORMATIONS
The Coca-Cola Company was founded in 1888 to take advantage of the already popular
Coca-Cola name. Of the four life cycle stages (birth, growth, decline, death), after 120 years,
the company remains in the growth stage because the companys value creation skills
continue to evolve.
The company has faced a variety of internal problems over the years. A constant struggle in
any organization is trying to meet employees demands while trying to keep labour costs low.
In 2005, workers went on strike because management wanted to institute a policy where
employees would pay a greater portion of their health benefits. If the organization
experiences any work stoppage, the company may not be able to meet customer demand
and lose out on revenue. Another internal problem within the company is that the board
exercises a great deal of power and influence. As previously stated, the company failed to
attract its top choices for CEO in 2004, and the board has even pulled ads because they
thought the commercials did not fit the companys image .
Uncertainty in the environment has caused many external problems for the organization,
ranging from uncertainty with its suppliers and distributors to political and societal pressures.
. While there was not information regarding policy changes because of this, many believe
that the power of the board will diminish because long time director Warren Buffet has
stepped down. Buffet has been viewed as rather conservative and also involved himself in
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DECISION MAKING
The majority of decisions made by The Coca-Cola Company are done so by using the
incremental method. Each year, the company would analyze results, and then make slight
changes in operations to create better results next year. The company does not just quickly
decide to create a new product, or change operations.
Drastic changes take time. Recently, realizing that the company was in desperate need for a
drastic change, Isdell sought to figure out why the company performance was declining. By
starting at the lower levels of the organization to find solutions, the company was able to
make some drastic changes to the companys culture, how employees were rewarded, and
made efforts to get employees more involved. The changes brought on by using the
unstructured decision making model created much better results for the company.
One of the biggest flaws in the organization is that the board of directors is responsible for
some of the non-programmed decisions made by the company. When The Coca-Cola
Company was seeking to purchase Quaker Oats, the deal was almost finalized, but then
stopped because the board felt the price was too. When decisions are made by the board, it
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