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The Coca-Cola Company is the largest beverage company in the world and it is the leader beverage brand worldwide.
Coca-Cola (the soft drink) was invented in Atlanta in 1886 by a pharmacist called John Pemberton. Asa Candler bought the brand and transformed the brand into a business. Since that time he used to do an aggressive promotion and marketing of the product (which is until now a stronghold of Coca-Cola) to introduce Coca-Cola to United States. In 1919 the company was sold to Ernest Woodruff and his son, Robert, saw the opportunity of expand Coca-Cola sales around the world.
Today the company is the largest beverage company in the world and operates in more than 200 countries. They have more than 3,500 brands in their portfolio, which has a wide variety of beverages as soft drinks, juices, water, teas, sports drinks and energy drinks.
The Coca-Cola Company system consists in the Coca-Cola Company, which is responsible for producing the bases and syrup of the drinks and sell them to bottler partners, which will produce, bottle, distribute and merchandise the products to customers (e.g. retailers). So, the company can focus product innovations, strategies and marketing activities to connect the brand with the final consumers.
. Mission and Vision Statements
With vision and mission clearly defined, companies can better design its strategic plan, evaluating its differential, goals, and especially its actual and potential competitors, producing outstanding results.
Mission is defined by Kotler et al (2005, p.51) as "a statement of the organizationÂ´s purpose - what it wants to accomplish in the wider environment". A clear mission statement is important because it helps all the employees to work for the overall goal of the company, individually and yet in collectively.
Coca-Cola declares its mission as the standard which will guide their actions and decisions. Their mission statement is:
â€¢ To refresh the world...
â€¢ To inspire moments of optimism and happiness...
â€¢ To create value and make a difference.
Their mission statement is somewhat abstract and playful, but it fits with the brand image and positioning.
Johnson (2008, p.164) says that "a vision statement is concerned with what the organization aspires to be". The vision is a long-term view of the business, defining where and what the company wants to be in the future.
Coca-Cola Company uses its vision as a guide for their business by reflecting what they need to pursue to continue achieving sustainable and quality goal. (The Coca-Cola Company website). Their vision statement is:
â€¢ People: Be a great place to work where people are inspired to be the best they can be.
â€¢ Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.
â€¢ Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.
â€¢ Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.
â€¢ Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
â€¢ Productivity: Be a highly effective, lean and fast-moving organization.
Their vision can be considerate complete and clear because it includes a purpose for all important issues related to them: employers, satisfaction of customers desires and needs, suppliers, the planet (because sustainability is essential for a company nowadays) and profitably which is the main goal for every organization.
. Goals and Values
Ethical, Social and Environmental Issues
Coca-Cola has a program called Live Positively, which consists in seven key core areas that they focus to provide business sustainability: beverage benefits, active healthy living, community, energy and climate, sustainable packaging, water stewardship and workplace. Each area has measurable goals and metrics and is related to one of the following issues: ethical, environmental and social.
Jonhson et al (2008, p.145) divides business ethics in two levels; the macro level, which concerns with "the role of business and other organizations within society" and can be named as corporate social responsibility; and the individual level with "business ethics is about the behavior and actions of people in organizations".
In the next sections, we are going to identify how Coca-Cola deals with business ethics in both levels.
Corporate Social Responsibility: Social Issues
According to Kotler and Lee (2005, p.3), corporate social responsibility is "a commitment to improve community well being through discretionary business practices and contributions of corporate resources".
The core areas of Live Positively that covers the social issues are explained as follows.
1) Beverage benefits
The main goal is to make every effort to provide products with quality that the customers trust. Coca-Cola is investing huge amount of money in researches and innovation. In addition they strive to have low or no calories beverages aiming communities with obesity problems, for example.
They are also planning to have the calories information in front of all their beverages packages around the world by the end of 2011.
2) Active healthy living
The main objective is to encourage healthy lives to their customers by offering nutrition education and supporting physical activities programs, besides a variety of products to fit every consumer lifestyle, life stage and life occasion. Moreover, this area has the principle of not marketing their products for children under 12 years old.
The major focus of this area is to foster sustainable communities by improving the quality of life of communities where they operate, by promoting economic development, philanthropy and creating social and economic opportunities.
For example, in Brazil, Coca-Cola started a program called Coletivo, where the company, in partnership with NGO's, offers training for young people to give them the skills to find their first job.
Coca-Cola is also worried about the safety and health of their employers, so they aim to create safe work environments respecting international human rights principles.
Ethics in individual level
In the same way there are significant issues at the individual level. For instance, if the employee does not agree with non ethical business practices of the company, they have to be able to decide how to behave, or vice versa.
Coca-Cola has a "Code of Business Conduct", which is a document that guides the ethical behavior, requiring integrity and honesty for all employers. They have to read and follow its principles.
In this document they have, for example, rules for financial integrity, anti-bribery compliance, intellectual property and competitive intelligence.
1) Energy and climate
Coca-Cola wants to be the beverage industry leader in energy efficiency and climate protection. They aim to grow the business without increasing the carbon emissions.
2) Sustainable packaging
Coca-Cola wants to make package as a valuable resource for the future use, by improving material efficiency and using recyclable materials.
3) Water stewardship
The main goal of this area is to return to the environment and communities an amount of water equivalent to what they use in their production.
To better understand the cultural issues that affect Coca-Cola is important to analyze the company using the cultural web theory. According to Johnson et al (2008, p. 197), "the cultural web shows the behavioral, physical and symbolic manifestations of a culture that inform and are informed by the taken for granted assumptions of an organization". It consists in the analysis of 7 elements as shown:
At this analysis most examples are from Coca-Cola Brazil, because I am more familiarized with it.
The cultural web. Source: http://www.mindtools.com/pages/article/newSTR_90.htm
Coca-Cola is a company that "makes it happen"
Despite of the heavy workload, people work at Coca-Cola with passion. This may be because the brand is captivating and it is a pleasure to see that your work is effective.
The stories told by the members of the companies used to be about launching of products or campaigns. People in the company always talk about disaster products that were launched and quickly failed (New Coke, for example) and success stories, for instance, the launch of Coke Zero and its incredible success. Moreover, the employers of Coca-Cola like to talk about people's success (for example, someone that started in the company as a sales representative and now became a director).
- The Coca-Cola logo: very strong symbol of its culture. It is the same since its creation in 1886.
- Acronyms: acronyms are strongly used by people in their presentations and communication.
- English language: because Coca-cola is an American company, english expression are very common to be listened, even in other companies.
- Visual effects: Power point presentations of Coca-Cola are known by their design. The employers use a lot of visual effects that make them clear and easier to understand.
- Offices layout: each department of the Company has a different layout. For example, the advertising department has colorful decoration while the finance department is more serious. Moreover, everyone has some products packages to decorate their tables.
- Volume of sales: the volume of sales in the company is measured in physical cases or unit cases. When someone starts in the company the difference between those two measures is one of the first things they learn.
3) Power structures
In Coca-Cola it is possible to find different power sources. First, the main power source in the company is the hierarchy power: the company has a well defined hierarchy and peopleÂ´s position in the organization indicates how much power they have.
Secondly, we can see in the company the influence power, which is informal. For example, there are some managers that have a leadership skill more developed, so they can influence people for doing something to his department.
Moreover, there is the power own by the possession of knowledge. For example, there is a financial assistant that has been taking care of the accounts between Coca-Cola and the bottlers for more than 20 years. She knows the process so well that everybody asks her doubts, even her boss, the financial manager, and is hierarchically more powerful.
4) Organizational Structures
The organization structure is hierarchical, with many levels. The hierarchy is well defined and the relationship on the highest level of the structure is mainly formal. However, between employers of lower level, it is informal.
5) Control Systems
At Coca-Cola the quality of processes is always monitored, but sometimes due to lack of time, the process cannot be followed as it is written, especially in marketing and advertising departments. In addition there is a reward system in which every manager has goals that are shared with the employers. The bonus payment depends on the results of the teamwork and also of each individual.
6) Rituals and routines
At Coca-Cola it is a routine to work until late, to have more tasks than it is possible to be done. In addition, there is misalignment between the departments, which causes a lot of rework. At the company, managers have too many meetings that they do not have sufficient time to manage their teams as they wanted and should.
Thinking of off work routines, it is very common that people have longer lunch time on Fridays and talk about the merchandise execution of Coca-Cola in the places where they have been.
Business Objectives and Strategies
In order to be competitive in the global beverage market, Coca-Cola uses a differentiation strategy, which allows the company to create value to their consumers.
Coca-Cola has clear business objectives that were defined in when they designed their "2020 Vision" (Coca-Cola website). The company has set objectives for: profit, people, portfolio, partners, the planet and productivity. The information explained in this section had as reference the company website.
Coca-Cola wants to more than double the company revenue while increasing their margins. To achieve this goal, they are working to maximize company and bottler partners long-term cash flow. They are planning to highly increase the investment in sales and marketing execution. In addition, they want to operate manufacturing and logistics with the lowest cost, without changing the quality standards. They also aim to take advantages of their size and expertise to create economies of scale.
The company aims to be a great place to work. To achieve that they are working to attract, engage and retain the best talent. They are increasing people's system knowledge and cross-system movement. In addition, they are worried to inspire their workforce to be passionate ambassadors of their brands. Moreover, they want to achieve the diversity of employers by giving more opportunities to women employers.
Having an engaged and motivated workforce is essential to achieve any goal of the company. People are an essential resource of the company.
Coca-Cola intend to more than double their servings to over 3 billion a day and wants to be at the top of non alcoholic ready to drink business in every market and every category that they are players.
To achieve that, they are constantly developing the world's most innovative and effective marketing. The first marketing objective for them is always "win" with Coca-Cola, that is the "epicenter of their business". So they think that is essential to be active to guarantee that the young generation "falls in love with Coca-Cola".
Moreover, they are working to increase the value of their portfolio, by buying or developing innovative premium brands. Another important issue for the company is to satisfy the needs of older customers, by offering and marketing the right products and campaigns.
Is also a first rule for the company (together with the bottlers) to guarantee the quality of their products.
Coca-Cola intends to be the most preferred and trusted partner at the beverage market. They work to create value for their customers, being an important part of their growth. To achieve that they focus on selling and merchandising and are always improving the deliveries methods, making them more flexible.
Furthermore, Coca-Cola gives a huge importance to the point of sale, so they provide the retailers with products and communications customized to their specific shoppers, being prepared to fulfill local needs, tastes and traditions. Their global strategy is to "think and act like an integrated global enterprise while intensifying their local focus".
Another important goal is to expand the investments in immediate consumption (e.g. restaurants, bars).
Coca-Cola aims to be leader in sustainable water use, packaging, energy and climate protection in the world. Satisfying their Live Positively commitments the company intends to create competitive advantage.
The company goal to achieve productivity is to "manage people, time and money for greatest effectiveness". Their strategy to accomplish is standardize and simplify their business processes, data and IT systems. They also want to minimize their use of energy, redirect resources seeking for profitable growth and create competitive advantage across the entire supply chain.
. Monitor and Evaluators
Total shareowner return. Economic profit growth. System cash flow.
Engagement. Employer of choice. Workplace rights. Diversity. Retention.
Volume and value share. Servings growth. Brand health. Category ranking. # of new billion dollar brands. Commercialization: Percentage, Speed, Longevity. Quality index.
Customer relationship health. Retail Sales Growth. Shopping trips with a company product. Immediate consumption growth.
Reputation tracking. Environmental performance. Safety record.
Market driven spending levels. Supply chain costs. Overhead per unit. Total energy use.