Coca-Cola’s Naturally Sweet Division: Strategic Objectives Summary
1.0 Naturally Sweet Division: A balanced score card
1.1 Financial perspective (Shareholder value)
1.1.1 Market share: Coca-Cola currently has 30 percent of the global market share of the beverage industry (Sure Dividend, 2016). The Company’s still brands have also captured at least 30 percent of the global industry. Since Naturally Sweet will be aiming to participate in both still and carbonated segments, it will aim to capture at least 30 percent of and Number 1 in the naturally sweetened drinks sub-segments in both the carbonated and still drinks. The products aims to secure for Coca-Cola the largest slice in the healthy and naturally sweetened market.
1.1.2 Profitability: The 2015 profit margin [Gross Profit/ Net Operating Revenue] for Coca-Cola was 60.53 percent (TCCC, 2016a). The Natural Sweet Division must aim for a base profit margin of 61 percent and increase it by a minimum of 5 percent annually. It will achieve this profitability target, and avoid unnecessary building up of expenditures, through sensible and fine-tuned efficiency programs already being carried out in the Company, such as refocusing its business as brands distributor and licensor instead of a manufacturer or bottler. It uniquely positioned to take advantage of this corporate-wide strategic shift due to its essential brand management and syrup formulation business model with no organizational role in establishing bottling businesses in emergent markets the way the Bottling Investment Group (BIG) is operating in carrying out its mandate of penetrating new global markets through ownership of bottling businesses whenever no powerful partner can be found in certain markets.
1.1.3 Competitive position: Like most Coca-Cola products, either in the carbonated or the still drinks segments, Naturally Sweet will aim to be Number 1 in its sub-segment (naturally sweetened drinks whether still or carbonated) and strive to be also Number 1 or Number 2 in both segments. It has the potential advantage of pioneering this sub-segment.
1.2 Customer value perspective
1.2.1 Customer retention: The Naturally Sweet products aims to retain at least 95 percent of its current customers annually. Millennial customers are expected to be more volatile in their loyalty characteristics due to their propensity to experiment new products or products that tend to reflect their common temperament. Innovative product design and communication will be aimed at keeping them Naturally Sweet brand loyal. Nevertheless, earlier generations of health-conscious consumers are expected to represent a more stable consumer base.
1.2.2 Customer satisfaction: The Naturally Sweet products aims to achieve a customer satisfaction rate of at least 90 percent annually. Research and development will be focused on achieving optimum customer satisfaction in current product formulation.
1.2.3 Customer value: All Naturally Sweet products offer customers value in terms of affordable price at par with other Coca-Cola products and naturally sweetened products.
1.3 Process (internal operations) perspective
1.3.1 Measure of process performance: The Naturally Sweet Division will be fully committed in supporting Coca-Cola’s water efficiency target of 25 percent improvement by 2020 from its 2010 baseline (TCCC, 2016b). Moreover, it will improve its divisional efficiency by 5 percent annually to positively contribute to the 10-year efficiency target.
1.3.2 Productivity improvement: The Naturally Sweet Division aims to adopt Coca-Cola’s forward-looking productivity program by focusing in the emerging markets (45% of product sales), which is foreseen as the have 65 percent share of the industry growth towards 2020, and start off as fully (90 to 95%) brands distributor and licensor, not the traditional manufacturing way (Sharma, 2016). At the onset, it will focus on gaining market share in China and India, each being 4-fold larger in land area than the United States.
1.3.3 Operations metrics: The Naturally Sweet Division aims to focus on its product safety and quality by maintaining at least 95.0 annually in the Global Product Quality Index (GPQI) rating and to push attempt to push it to 98.0 annually (cf. Staff, 2012). Coca-Cola products has maintained an average of at least 94.3 GPQI rating since 2010.
1.4 Learning and growth (employee) perspective
1.4.1 Level of organizational capability: The Naturally Sweet Division will adopt the broad network of the Coca-Cola System (CCS), which is essentially a local multichannel manufacturing and distribution system through Coca-Cola’s bottler partners. It will be integrated into the BIG objectives to let the division expand wherever BIG expands (TCCC, 2016c). BIG has already broken through new markets in 19 countries, representing 25 percent of the CCS volume (Finan, 2015). It aims to distribute Naturally Sweet products in at least 90 percent of the BIG markets. Moreover, all employees will be trained in all relevant areas such as people leadership, franchise leadership, consumer marketing, and customer leadership, among others through the Coca-Cola University and must finish at least 95 percent of all required trainings in their levels annually (Staff, 2016).
1.4.2 Nature of organizational culture or climate: The Naturally Sweet Division aims to maintain the gender diversity ratio of 50% (cf. TCCC, 2016d) with equal distribution of racial groups (i.e. Caucasians, African-American, Asian (and Pacific Islander), and Hispanic) available in the Company, or 5 percent per racial group only if possible.
1.4.3 Technological innovation: The Naturally Sweet Division will focus its technological innovation in achieving high quality products that are at least 95 percent at par with the traditional Coca-Cola products in both carbonated and still sub-segments. High consumer satisfaction will also be focused until formulations are perfected to market preferences.
2.0 Strategic objectives communication plan
2.1 Purpose: The Naturally Sweet Division communication plan aims to establish a product credibility among its partner bottlers and consumers for providing high-quality still and carbonated products that are sweetened naturally, without using sugar and artificial sweeteners.
2.2 Audience: Partner bottlers and consumers
2.3 Channels of communication
2.1.1 Business meeting: This channel is most appropriate in presenting to the partner bottlers the market advantages inherent in each brand and product of Naturally Sweet Division. The goal is to encourage them to be enthusiastic buyers and promoters of the products.
2.1.2 Television commercial advertisement: This channel is aimed primarily to the consuming public and intended to show the healthy benefits of each bottle of Naturally Sweet product and then persuade them to try and keep on drinking these products and brands.
2.1.3 Social media and other online channels: These channels aim to interact with customers to better explore the benefits of each Naturally Sweet product and brand. These are particularly relevant channels for millennials who are frequent interactors in social media, such as Facebook, Twitter, Google+, and others. The Company website will also provide rich materials of evidence-based information about the health benefits of the products.
2.1.4 Official partnership in large sports events: Events such as the World Cup and the Olympics provides Naturally Sweet products and brands with a broad marketing mileage through which it can present the health benefits of naturally sweetened drinks under the Coke family.
2.1.5 Sponsorships in local and public events: Like subsection 2.1.4, these channels capture a wider opportunity to promote the health benefits of the Naturally Sweet products and brands during community events and activities.
References
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