Analysis of Strategy Implementation at the Coca-Cola Corporation Essay

Total Length: 2328 words ( 8 double-spaced pages)

Total Sources: 6

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Executive summary



This research paper examines the organizational design of the Coca Cola Company and describes its structure of organization. The organizational structure of the Coca Cola Company is clearly unique. Regional managers employed by the company are given powers to make decisions. The company has ensured that it responds quickly to the changes in market demands by allowing localized decision making. The management at higher level is, consequently, given the time they need to think through long term strategies and plans. Although Coca Cola has made significant efforts to reinvent its brand and products on the market, its growth has slacked in recent day. There is an indication that the company should rethink its strategy for products if it is to remain relevant and competitive on the market. This study sums up by pointing out the changes recommended to keep the company growing fast.

Introduction



It is evident that Coca Cola remains the one with the soft drinks that sell the most in most countries where it operates. Even the Middle East; the only region in the world where Coca Cola is not the top soft drink, it still controls 25% share of the market. It also recorded a double-digit growth in the year 2013. This study examines the design, strategy for implementation and structure of the Coca Cola Company. The primary aim is to figure out how the mission strategy of the company relates to the organization’s components for implementation. Of importance is to understand whether the employed strategy is anchored on the values, vision, mission and the organizational structure.

Coca-Cola’s organizational Structure



Coca Cola, as a company features a separate International Division. The international staff of the company works separately, and is isolated from the on goings at the head office in their activities. Coca Cola has numerous divisions across the globe. It also features presidents in charge of continental divisions. There are five continental divisions at Coca Cola (Coca Cola Company, 2018).

· The North America Group

· Latin America Group

· Pacific Group

· Eurasia &Africa Group

· Europe Group (Coca Cola Company, 2018)

There is a vice president allocated for each continental division, they control are in charge of the subdivisions based on countries or regions. The structure works effectively for Coca Cola because it is a giant company (Coca Cola Company, 2018).

Coca Cola is regarded as an ethnocentric MNC since it operations internationally are significantly similar to their local ones. Coca Cola sells the same soft drinks, and operates the same way regardless of the country, continent or region. The head office is fully in touch and control of the company’s operations (Coca Cola Company, 2018).

Organizational Design



Coca Cola has realized that there is a need to meet the changing customer demands. In the nineties and even recently, the company advocated for the decentralization of its operations for that purpose. Two operating groups suffice for Coca Cola, i.e. the Corporate and the Bottling Investments (Narayan, 2010). Other operating groups split on the basis of the various regions including European Union, Eurasia, North America, Africa and the Pacific. The regions are further split into geographical areas (Coca Cola Company, 2018). Through decentralizing their decision-making process, they can respond fast to the ever-changing demands of the market.

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The management at higher level is allowed time to concentrate on long term plans. Some company divisions such as innovation, human resource, strategy planning and finance are located within the company’s corporate division. Some of the functions are carried out at lower levels in the various regions of the company. Nevertheless, the highest-level staffs make most of the decisions (Narayan, 2010). A recent example is the decision to sponsor the World Cup. It was made at the corporate boardrooms. Still, it is the corporate headquarters that gave permission to the local divisions to design commercials and advertisements that would impress the local markets.



In 2004, Neville Isdell was chosen as Chairman of the Coca Cola Company. He started using complex mechanisms for integration. Isdell made use of top manager teams to tackle the problem of the organization’s painfully slow growth. Meetings were held at the local level, and he made sure that employees were kept posted on the new developments and decisions. He also made sure that the intranet was completely changed to enable the company find a medium that could allow real-time information sharing. Complex integration mechanisms are the best when it comes to big organizations such as Coca Cola. Each section of the organization should be empowered to quickly share information (Chokheli, 2015). The organization appears to be succeeding in balancing mutual adjustment and standardization.

Ethics and code of conduct



A guidebook for all employees to study and internalize how everyone in the company should operate is provided. If there is a case of improper conduct, the culpable employee is subjected to disciplinary action. Mutual adjustment has increased in the company’s operations. The turnover of staff has reduced (Chokheli, 2015). Following the changes initiated by Isdell, the company has started witnessing faster growth. Indeed, the equity return for stock traders moved from a negative return to 20% (Narayan, 2010). Such a balance is critical because it gives flexibility to employees. On the positive side it gives a working environment that is predictable (Chokheli, 2015).

Structure



The organizational structure sports both organic and hybrid characteristics. The company places heavy premium on responsiveness. Complex integrating mechanisms in use are reminiscent of a structure that is organic. The information gathering methods make it possible for a bottom-up flow of information. The intranet, on its part gives room for information to flow laterally (Chokheli, 2015). Through surveys, the company has seen the need for standardization and simplification. High standardization and centralization are linked to the mechanistic structure. The bonding of the two structure types appears to work perfectly for the firm (Narayan, 2010). It is important to be flexible when dealing with vast and diverse markets. High standardization helps the organization to maintain efficiency in its production sphere. Integrating mechanisms help the company to coordinate more easily for such a huge conglomerate (Chokheli, 2015). The choices that he organization makes are made to remain in line with the goals through centralization. Since there is free information flow in the company,….....

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References

Chokheli, E. (2015). Role of the Organizational Design in the Company’s Success. European Scientific Journal, 1857–7881.
Coca Cola Company (2018). Our Company. Retrieved 22, February, 2018, from http://www.coca-colacompany.com/our-company

Narayan, V. (2010). Organizational Structure of the Coca-Cola Company, the Coca-Cola Company 2010. Retrieved 22, February, 2018, from https://www.scribd.com/doc/37483762/Organizational-Structure-of-The-Coca-Cola-Company

The Coca-Cola Company (2018). Our Company, Mission, Vision & Values. Retrieved 22, February, 2018, from http://www.coca-colacompany.com/our-company/mission-vision-values

The Coca-Cola Company (2016). Five Strategic Actions. Retrieved 22, February, 2018, from http://www.coca-colacompany.com/stories/five-strategic-actions

Schulman, M. (2006). Incorporating Ethics into the Organization, Santa Clara University. Retrieved 22, February, 2018, from https://www.scu.edu/ethics/focus-areas/business-ethics/resources/incorporating-ethics-into-the-organization/

Vartanian, L. (2007). Effects of soft drink consumption on nutrition and health: a systematic review and meta-analysis. American Journal of US National Library of Medicine National Institutes of Health. Retrieved 22, February, 2018, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1829363/

Nasdaq (2018). KO Company Financials. Annual Income Statement Retrieved 22, February, 2018, from https://www.nasdaq.com/symbol/ko/financials?query=income-statement




















Appendix 1
Period Ending:
Trend
12/31/2016
12/31/2015
12/31/2014
12/31/2013

Total Revenue









































$41,863,000
$44,294,000
$45,998,000
$46,854,000

Cost of Revenue









































$16,465,000
$17,482,000
$17,889,000
$18,421,000

Gross Profit









































$25,398,000
$26,812,000
$28,109,000
$28,433,000

Operating Expenses

Research and Development






































$0
$0
$0
$0

Sales, General and Admin.






































$16,772,000
$18,084,000
$18,401,000
$18,205,000

Non-Recurring Items






































$0
$0
$0
$0

Other Operating Items






































$0
$0
$0
$0

Operating Income












































$8,626,000
$8,728,000
$9,708,000
$10,228,000

Add'l income/expense items












































($592,000)
$1,244,000
($669,000)
$1,110,000

Earnings Before Interest and Tax












































$8,869,000
$10,461,000
$9,808,000
$11,940,000

Interest Expense












































$733,000
$856,000
$483,000
$463,000

Earnings Before Tax












































$8,136,000
$9,605,000
$9,325,000
$11,477,000

Income Tax












































$1,586,000
$2,239,000
$2,201,000
$2,851,000

Minority Interest


































($23,000)
($15,000)
($26,000)
($42,000)

Equity Earnings/Loss Unconsolidated Subsidiary












































$835,000
$489,000
$769,000
$602,000

Net Income-Cont. Operations












































$7,362,000
$7,840,000
$7,867,000
$9,186,000

Net Income












































$6,527,000
$7,351,000
$7,098,000
$8,584,000

Net Income Applicable to Common Shareholders












































$6,527,000
$7,351,000
$7,098,000
$8,584,000



 

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