Business Case Analysis of the Coca-Cola Company
The Coca-Cola Company, comprising almost 20 different beverage brands, is the world’s largest beverage manufacturing brand, with a market capitalization estimated at one hundred and eighty six billion dollars. It is also considered to be the third most valuable brand across the world, according to Interbrand, estimated at $ 78.4 billion . Its portfolio includes more than 3800 products that are distributed worldwide thanks to more than 250 bottling partners and 900 plants throughout the world.
Coke brands are available in more than 24 million retail shops around the world, thereby making the brand even more accessible for the people. It is therefore not surprising that out of every four dollars that individuals spend on non-alcoholic drinks, $1 is captured by one of Coca-Cola’s 20 brands. Given the global nature of the company’s operations, it is crucial that trends are identified and strategies are implemented very quickly so that maximum advantage can be taken of the potential opportunities .
This is primarily why the company’s management has developed 20-20 Vision Statement which focuses on identifying a clear roadmap so that business goals and objectives maybe achieved . The mission statement for Coca-Cola is essentially the benchmark against which all of the company’s actions are formulated and executed. The mission statement constitutes three integral pillars which are:
Providing refreshment to people across the world
Making a difference in the lives of people by creating and providing value to them
Triggering instances of joy, hope and happiness for people
The vision statement for Coca-Cola is actually the framework within which the company must operate so that it is able to accomplish sustainable growth, without compromising on quality. While the mission statement was based on three pillars, the vision statement is composed of 6Ps which are:
People create a workplace – which inspires people to deliver their best performance
Portfolio – successfully develop a portfolio of non-alcoholic, ready to drink beverages that have the ingredients to fulfill the wants, needs, desires and wishes of the target audience
Partners – establish mutually beneficial relationships with both customers and suppliers to optimize the supply chain
Planet – operating as a socially responsible organization that is focused on maintaining a healthy planet by ensuring that communities across the world have access to a basic standard of living
Profit – ensure that the return of investment for the company’s shareholders stays profitable for them in the long run, without Coca-Cola compromising any of its social responsibilities
Productivity – maximize efficiency and productivity in operations by streamlining tasks and creating a lean business model
When it comes to the values of Coca-Cola, there are seven areas that have been identified as having the maximum importance in terms of being the moral compass of the company. The first value is that of leadership to create an improved world for the people . The second value is that of collaboration in order to be able to benefit from the collective capabilities of all stakeholders. The third and fourth values are closely connected and relate to integrity and accountability for all individual actions of partners among employees and customers .
The fifth value is that of passion for staying committed to the company’s mission and vision. The sixth value is that of diversity so that the workplace at Coca-Cola has as much variety as the different markets that the company caters to. Last but not the least, Coca-Cola considers quality to be an important value as well. This implies that there is an unrelenting focus to continuously deliver products that are of the highest quality standards.
Goals and Objectives
In addition to the values, mission and vision objectives mentioned above, Coca-Cola also relies on its professionally trained sales force that ensures optimal product delivery and experience for its consumers. This is achieved by keeping an open perspective, taking feedback and incorporating it with their products .
In line with its goal of maximizing transparency and sustainability, Coca-Cola has also devised its sustainability goals that the company wants to achieve by the year 2020. These goals relate to increasing the health standards and well-being of children in particular, and adults in general.
In my opinion, this is a crucial goal that has been set by the management in order to counter the image of obesity that has long been attached with the brand. An important change is the strategy that has been introduced to reflect this shift in perspective, has been the launch of several zero calorie products under the brand’s umbrella.
Furthermore, Coca-Cola is also working towards providing an option to people through which they can select how many calories they want added in a product. This sustainability goal will go a long way in transforming the company’s image as being the primary source of obesity across Europe and North America .
A review of the website also reveals that Coca-Cola is not just focused on producing the maximum number of cokes, but rather also make sure that its employees, bottling partners and other suppliers are also not harmed. This balance between maintaining a profitable bottom line while also investing in the welfare of people is a clear indication of the fact that Coca-Cola takes a very holistic view of the world.
However, in my opinion setting sustainability objectives and goals or launching zero calorie products is not sufficient in order to actually address the health issues that the majority of the world’s population in facing. Coca-Cola needs to increase its investment in its in-house product research and development efforts. This is the only way that the company will be able to come up with new formulations that are not only appealing to the taste buds of consumers, but also provide real nutritional benefits to them .
There is no doubt that the company has come a long way in terms of having an extremely comprehensive, Corporate Social Responsibility Strategy. One offshoot of Coca-Cola’s social responsibility strategy is the Coca-Cola Foundation, which primarily focuses on improving the quality of life of women and children in developing countries like India, Bangladesh, Mexico, Vietnam and Pakistan. Investments have been made in millions of dollars to encourage entrepreneurship by establishing EKOCENTER in Vietnam as a pilot study. If successful, the brand has plans to duplicate this for other underprivileged communities across the world .
Stakeholder Framework
Given the extensive scale of operations of Coca-Cola, the stakeholder base of the company is also rather expansive. This is primarily why the company has adopted the principle of “ongoing conversations leading to continuous improvement”. As the words suggest, the management believes that a continuous dialogue between all of its important and direct stakeholders is essential if the company wants to accomplish its mission, vision, goals and objectives in the near future .
Perhaps the most integral part of the stakeholder framework is the relationship between Coca-Cola and its bottling operators across the world, as well as the trade organizations that the company partners with. The Coca-Cola Company relies on the Golden Triangle Approach to Partnerships in order to maximize its engagement with the stakeholders. This approach is based on the principle that whenever the public, private and civil society sectors work together, the gains for each participant as well as the end-consumer increase manifold .
At this point, it is also important to understand that each of the stakeholders of the brand have different vested interests at heart. The stockholders for instance, would be far more interested in the revenue that the company is posting in each quarter, the net profit margins and the appreciation in their share value. Employees would prioritize greater amenities and at-work facilities, in addition to monetary increments and bonuses.
The government and other NGOs (such as those working for women empowerment and climate change) would lobby for more sustainable business practices to be adopted.
It is as a result of these lobbying efforts that Coca Cola has dedicated an entire section on its website called Sustainability, and visitors can even access the Sustainability Report 2015-15 there, much like the financial reports that have been uploaded. Moreover, this increased focus on minimizing the company’s carbon footprint, has also influenced the company’s business strategy. That is why Coca Cola has started using recycled materials for its bottles in some of the countries that it operates in and is also in the process of helping developing countries implement sustainable agricultural practices .
Another important strategy that has been executed in this regard is maximizing people’s access to safe and clean drinking water in places where this basic utility is not commonly available. Similarly, the company’s 5x20 campaign that is aiming to empower 5 million women by 2020 through this program, is prompted more from a welfare-driven agenda of the company’s management rather than a profit-generation one. So, each stakeholder in the equation has a different set of priorities and their actions and beliefs have varying underlying causes. The tricky part of managing the stakeholder network is finding the right balance between who to accommodate and to what extent .
For instance, Coca Cola may be under pressure from the United Nations to do more for the environment, and the company may decide to change the disposal mechanism of its used bottles as well as change the ingredient make-up of the bottles from plastic, to something more degradable. While bringing about this change may be welcomed by the community in which Coca Cola factories are located, the extensive network of suppliers that the brand collaborates with, might not be very responsive to, and appreciative of this change as it may increase their product and logistics cost .
Not only are both stakeholders important, but so are the causes that each one is supporting. Climate protection is a noble business goal to have, but at the end of the day, Coca Cola is a for-profit company, with a strong accountability in front of its shareholders. In such scenarios it is up the management’s discretion to decide which side to sway towards.
Works Cited
Esterl, Mike. "Coca-Cola Makes Management Changes; Asia, Africa Chiefs Eased Out." The Wall Street Journal 24 May 2016: 3-4. Print.
Michal. "Why Coca-Cola's $550K Payments to an Anti-Obesity Group Is Causing a Stir." Entreprenur 254 December 2015: 5-9. Print.
