Success Of The Coca Cola Company Commerce Essay

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This report is to investigate Coca Cola Company. On this coursework I will look at the company on all aspects from their business functions, organisational structures to the company's objectives. I would have to look at the departments within the business and the functional areas within these departments, also look at the different management styles within the business, looking at the organisational structure, the communication used within the business, and the impact of ICT on the organisations communications.

The Coca-Cola Company is the world's leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups. Along with Coca Cola, the world's best known brand, The Coca Cola

Company markets four of the world's top-five soft drink brands, including Diet Coke, Fanta and Sprite. Throughout the world, no other brand is an immediately recognizable as Coca Cola. With operations in

more than 200 countries, a diverse workforce comprised of more than 200 different nationalities, communicating in more than 100 different languages, The Coca Cola Company is part of the fabric of life in each of the communities they serve throughout the world. It operates as a local business partner, providing quality in the marketplace, enhancing the workplace, preserving the environment and strengthening the community.

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Coca-Cola is the most popular and biggest-selling soft drink in history, as well as the best-known product in the world. Coca-Cola was invented in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia. The

name 'Coca-Cola' was suggested by Dr. Pemberton's bookkeeper, Frank Robinson. He kept the name Coca-Cola in the flowing script that is famous today. Coca-Cola was first sold at a soda fountain by mixing Coca-Cola syrup with carbonated soda in Jacob's Pharmacy in Atlanta by Willis Venable. During the first year, sales of Coca-Cola averaged nine drinks a day, adding up to total sales for that year of $50.

Since the year's expenses were just over $70, Dr. Pemberton took a loss. Today, products of The Coca-Cola Company are consumed at the rate of more than one billion drinks per day.

In 1893, Coca Cola was registered in the United States and then further investment was put into it to expand the business. To handle the enormous capacity of its business, the Coca Cola Company has

divided up into six operating units: Middle and Far East Groups, Europe, The Latin America Group, The North America, The Africa Group and The Minute Maid Company. The Head Quarters is situated in the

United States. The country that I'm going to be concentrating on is the United Kingdom and how the company works in the U.K.

Action Plan

I drew up this action plan as a guide to prioritise what information I need to complete this report. The method of research I will use the most on this report will be secondary research such as the annual reports, etc.

Coca Cola's Ownership

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The Coca Cola Company is a public limited company . They offer shares to the general public through the company. It is mainly larger companies such as Coca Cola that are public limited companies.

The advantages of a public limited company are:

* Shareholders have limited liability

* The sale of shares enables larger sums of money to be raised

* While the company has this money permanently, the individual

owners can recoup their money by selling their shares to others

* Directors may be brought in as experts in certain fields

* Produce goods at lower unit cost

* Due to their size they can benefit from economies of scale, e.g.

bulk buying, cheaper borrowing

The disadvantages of a public limited company are:

· There are a number of legal requirements to fulfil in setting up a

company

· Regulations mean that a company is more expensive to set up than a

sole trader or partnership, although the cost may be as little as

£100, and some already registered companies can be bought off the peg

· The accounting of a company is less private than for other forms of

organisation

· The company could become to large resulting in poor labour relations

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· There could be a conflict of interest between shareholders and the

Board of Directors

· Possibility of takeover or merger because shares can be bought by

anyone

Coca Cola also have limited liability as they are a public limited company. A limited company is owned by its shareholders. There is no legal maximum to the number of shareholders. There are two forms of

Limited Liability Company in the UK, the Private Limited Company (Ltd) and the Public Limited Company (Plc). The essential difference, between the two, is that the Private Limited Company can not legally

offers its shares to the general 'public', therefore this form of company is usually associated with family run businesses. Whilst the Public Limited Company can sell its shares to the general public on

the Stock Exchange, providing the potential for far greater finances to be raised.

The owners of a limited company are referred to as its members, or shareholders. An individual can become an owner of the business by purchasing shares in that business. When the profits of the business are distributed to shareholders, they are distributed in the form of a

dividend. The value of the dividend is decided upon not by the owners, but by the Directors of the business.

Some shareholders had invested their life savings and not only lost their money, but their homes, limited liability was designed to protect shareholders from this mistake, but the key motive was to

ensure that large projects could continue to raise capital.

Coca Cola's Objectives of the Company

Mainly all companies' objectives are to survive, maximize their profits and to expand their business, however, from when Coca Cola had started, over the years they had achieved these objectives. So the

company have come up with six strategic objectives to provide the company with a framework for the company's success. In 2003, every function of The Coca-Cola Company integrated these priorities into

their business plans. And this year, they will continue to establish these priorities, and their benefits into every aspect of the business.

Coca Cola's Six Strategic Priorities

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1. Accelerate carbonated soft-drinks growth led by coca cola Coca Cola leads with their strengths. Carbonated soft drinks remain their most profitable business and Coca Cola is the most popular brand

in the world. This strategy paves the way for growth.

2. Selectively broaden our family of beverage brands to drive

profitable growth Enormous opportunity exists in categories such as juice and juice

drinks, bottled water, teas, energy drinks, coffee and more.

3. Grow system profitability and capability together with our bottling partners Coca Cola is a company of relationships, and one of our most important relationships is the one we share with our bottling partners. In 2003, those relationships became more profitable and productive.

4. Serve customers with creativity and consistency to generate growth across all channels We will continually strive to increase growth for the customers' businesses, helping create a context for the company's growth.

5. Direct investments to highest-potential areas across markets Coca Cola tailor their business approach to the individual marketplace based on its stage of development. In this way, we direct our investments in a way that makes the most business sense.

6. Drive efficiency and cost-effectiveness everywhere By leveraging technology, creating alignment across business units and achieving economies of scale, we are able to operate with more

efficiency.

To maximise profits enables the company to enhance the business, to expand the business, allow business to take over another business, buy new machineries, and pay more dividends to the shareholders. Enhancing the business means to upgrade the business in a sense that a business

buys new Computers, new office equipments, new furniture, expand the office, employee more labor etc. These six objectives are just not the businesses objectives but they provide the framework for the company's success. They achieve these goals very successfully by striving for

carrying out against a crystal clear strategy for success, and by doing so with an unwavering commitment to quality.

Departments of Coca Cola

Every organisation is made up of different departments, each of these departments help Coca Cola achieve their objectives. As Coca Cola is a large multinational company, the amounts of departments are huge. Each country has their own Head Office and departments. Coca Cola is geographically split into five geographic operating segments, also known as strategic business units (SBU's). The five SBU's are North America, Africa, Asia, Europe, Eurasia and Middle East and finally Latin America. If all these departments perform in the correct way then that will continue the success of Coca Cola.

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There are 6 functional departments within Coca Cola, these are:

· Marketing

· Finance

· Packaging

· Sales

· Research and development

· Administration

Marketing

The Coca Cola marketing department at the Atlanta Headquarters develops core strategies for company brands to ensure that all communication is consistent in every market.With this cohesive effort,

the Coca-Cola system maximizes its resources for market leadership and profitable growth. The marketing departments are responsible for marketing the products and advertising the products and promoting the products. If all these departments perform their duty firmly then the

objectives of The Coca-Cola Company will meets.

Finance

The finance department of the Coca Cola Company is responsible for financial record keeping. This involves keeping records of money received and paid out. The financial records will be used to produce

the annual reports for the shareholders so that they can see the company performance. The Finance department is also responsible for the management accounts of the business like marketing etc. The

Coca-Cola Company finance department is also responsible for making budget of the company and for each department like marketing department or research and development department. They will also be involved in the planning process like taking over or any major decision.

Packaging

The packaging department of The Coca-Cola Department is responsible for the packaging of the products. They have to make the packaging attractive so that that product meets the eyes of the consumers. Bringing new products package is their responsibility. It works with the companies bottling partners to produce an attractive combination.

Sales

The sales department of the Coca Cola Company is to coordinate the selling program. They also have to make the distribution methods, etc.

Also, decide how much to sell and how much to store in the warehouse and to choose the transporting method which is the most cost efficient and the quickest way.

Research and development

This department has their budget given by the finance department and their responsibility is to investigate new products. They work closely with marketing by looking at marketing research findings. They have to bring new products in the market for the change because the consumer cannot stick with the same old products. If necessary then they also have to improve the quality of the products. The Coca-Cola Company research department has done a lot of research and recently they have launched many new products like Diet coke with lemon, Fanta Tropical, Minute maids, Fanta raspberry, Fanta blue berry etc.

Administration

This department is essential for keeping the business going. They act as a help support of the company, it is not the central purpose the business but every business organization would need this department.

Most businesses rely on administration to be organized. They deal with enquiries, give messages produce documents and give information to any customer. The complaints that this department will get would be transferred to the research and development department to make the product better or fix the problem that the consumer is having. These departments are the most important department of The Coca-Cola Company because they helps the company to meets the objectives of The

Coca-Cola Company i.e. surviving, customer satisfaction and make more profits. As I said that the help desk department satisfies the customer by providing the information they needs and taking the complaints and passing to the research and development departments who improves the products.

Management Styles

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There are four main types of management styles that each business would use. Coca Cola have four principles of citizenship that they

would have to incorporate into the management style:

* Provide quality in the marketplace

* Enrich the workplace

* Preserve the environment

* Strengthen the community

A management style is an overall method of leadership used by the manager. The Coca Cola Company use the following management styles, but each one in different departments. There are three main types of management styles used in businesses:

Autocratic

Where the leader makes all the decisions, there is no negotiation and is very prescriptive and there is little job satisfaction. However, the job gets done quickly and there is less conflict between different

ideas. This style is hardly used among the company as they believe that the lack of input could lead to poor results. Autocratic does save a lot of time as quick decisions can be made and there is no time wasted on discussion resulting in the business saving time and money.

Democratic

This emphasises on group agreements to generate new ideas. There are two types of democratic management styles; democratic and consultative democratic. Democratic is where all the managers, junior managers and employees are involved in the ideas and final decision process. Out of

all the workers, no-one has a higher level than the others n this management style.

Consultative democratic

This is where the managers allow the employees to make the ideas but the ideas are forwarded to the executive's or the manager consults their team to make the final decision. Coca Cola applies consultative management style to the company more as there can be less conflict for what the final decision is. The advantage of this is that it helps to motivate staff as they are aware that they have a say in the company to some extent. The disadvantages of this that the process is very time consuming and effort will be needed by a manager to do this.

Management encourages employees to set goals in line within the organization aims. There are reviewed regularly in performance appraisals. The advantages of this style are that it will increase efficiency of individuals and help to motivate them and train them so they are productive. The disadvantages of this are that it needs to be well organized and will not work in highly structured jobs.

Democratic style is the management style that Coca cola adopts. This sort of management style involves empowerment. In this management style individuals and teams are given responsibilities and decisions to make, usually within a given framework. If anything wrong happens then the individuals and teams are then held responsible for the decisions that are chosen. With this type of management style it allows the manager to feel comfortable with other people in the organization making some of the decisions. Democratic managers will often want feed back from their employees on decisions being made. Democratic leaders listen and act on the opinions of the group. This type of management is good as it makes the employees happy and productivity is high. This is a very good method because employee's thoughts and suggestions are listened to by the business. This makes the employees seem as if they are respected and that their thoughts are valid.

Coca Cola's Management by Objectives

Management by objectives is a process of management that emphasises the role of leadership and communications in the organisation and control of the business. It is a method of managing managers rather than the workforce at large. The following shows how Coca Cola is managed, by the three basic elements in management that Coca Cola uses by the objectives:

· The identification of agreed goals by a manager and a subordinate

· The definition of the subordinate's responsibilities in terms of agreed results

· The use of agreed goals and responsibilities to control the progress of the business

Cultures

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Every business is made up of different cultures and the cultures that are present within the business depend on the management style and the organisational structures that are used. The different types of

structures are:

Role Culture- This is best suited to a hierarchy organizational structure. This type of culture works best by every employee playing the role that he or she has been predetermined and corresponds with the rules and regulations of the business

Task Culture- This culture encourages people to work as a team; this works best in a star structure.

Power Culture- This works well in a matrix structure. It is based around one dominant individual/leader.

Person Culture- this culture focuses on providing administrative help and support and close attention to one person in the organization.

Role culture is the culture that Coca Cola adopts. This is where all members have a defined job or role to carry out. Role culture is normally split up into a number of functions that are organized in a hierarchical way. Coca Cola would divide themselves into various functions like accounts, marketing and production. These also have hierarchical ordering of office examples of these are production director, production managers, supervisors, technicians, operatives etc. This type of culture works by logic and rationality. Role culture is mainly used in large organization. In this culture position in the main source of power and rules and procedures are the main source of influence. They also use task culture s the employees from the I.T department might have to work together to teach their goal or target

Management style of Coca Cola.

If the culture of the business is not good, it can affect the number of absenteeism and punctuality. This means that if Coca Cola had a hard and unfriendly culture it can force their staff not to come to work because they might be picked on every day by other staff members, or they might not like the work they are given so they either come in late or take a day of work. This would result in the business losing out on work, and have less time to call in for a replacement.

The culture of Coca Cola could have an affect on industrial relations, between managers and workers. So if Coca Cola didn't have a warm and genial culture it would cause more disagreements between staff and managers and staff would not be motivated to work, for example, staff may have to cut down on rest days, this could cause arguments as all staff would be tired from working everyday and would not have time to recover or spend it with their family. However, if the company had a warm culture then the managers and staff would get very well as staff would have less stress to compete with and would have a friendly environment to work in without having someone constantly shout out at staff.

Organisational Structure

Every business works using an organisational structure, this means that the organization has its staff organized in a certain way depending on the staff, their responsibilities and whom they must report to. Cultures and management styles play a massive part in organizing the structure.

As the Coca Cola Company is a large multinational company, it is made up of many organizational structures, these are broken down into the different units that are located around the world, which are; North America, Africa, Asia, Europe, Eurasia and Middle East and finally Latin America. Each unit is then organised into their own organisational structure. The following structure shows the Coca Cola Company in the Great Britain. Then each of the different departments has their own structure.

Marketing Organisational Structure

The structure of the marketing department is quite simple and is equally spaced out. It is a formal structure, which means that it has limited communication channels, the arrows show the flow of

communication, it is mainly vertical flows of communication. You can easily see no problems in this structure as the span of control is spaced out and can easily be managed.

Measuring Coca Cola's Success

Measuring Cola Cola's success can be easily done. Their success can be seen by the quality of its product and its sales figures. At the current day, Coca Cola lead by having the most popular and most consumed soft-drinks in the world. The information that the company can use to measure their success can be many of the following:

· Sales figures - In 1984, 77 of Coca Cola's operating income came from soft drinks. Today the figure is 97.

* Market share - Coca Cola, in 2000, took up 20.3% of the following drinks. The chart shows that 89% of sales come from soft drinks, 50% of the soft drinks sales come from Coca Cola.

Market Share of 2000

Coca-Cola Classic 20.3%

Pepsi 13.9%

Diet Coke 8.6%

Mountain Dew 7.1%

Sprite 6.5%

Dr. Pepper 6.2%

Diet Pepsi 4.9%

Seven-Up 2.0%

Minute Maid Orange 1.5%

Others 29%

Total 100%

· Questionnaires - questionnaires can be used to ask people their views on Coca Cola and their products. The various that can be asked is about the prices of the product, the quality of it, etc. this information then can be assessed to see if the company is doing it. The Company delivered solid results in 2003. They continued to work hard to re-activate the Company's considerable

historical advantages:

Our geographic reach, our wonderful brands, our range of packages, our financial strength, our ability to make connections, our marketing and our innovation capabilities' The company is never satisfied, but they always make solid progress. In 2003, the company grew profitable carbonated soft-drink volume, led by Coca-Cola branded beverages. They had expanded the range of juices and juice drinks, teas, sports drinks, waters and other noncarbonated beverages that they offer around the world. Also, they had improved their focus on building brands and working with customers and bottling partners worldwide. The Coca-Cola system is working more effectively today, for consumers, customers, bottlers and our share owners, than it has in a very long time.

Use of ICT in the business

Internal ICT Communications used by Coca Cola Coca Cola use ICT to communicate both internally externally. This includes communication with:

· Employees - Fax will be used to contact the employees because most employees will have a fax machine in their office or wherever they will be working

· Management - If management need to be contacted then pagers would probably be the alternative to contact them, fax machine could be a factor as well.

· Customers - The only ICT communication used by Coca Cola to contact customers could be E-mailing, they could E-mail customers different products or new sale's etc.

· Distributors of Coca Cola - They would probably be contacted by Video conference because the distributors are very likely to be from other countries rather then the country the business is trying to

consumer the products from. Internal ICT Communications that Coca Cola use are:

E-mail - E-mail will save a lot of time within the business if everybody would start emailing instead of calling a meeting. Coca Cola staff has programs installed on their computers, which tells them once they have received E-mail. This lets them communicate quickly with one another. Staff within Coca cola has access to a computer where they can E-mail. The disadvantage of this type of communication is that it is quite expensive, as it would have to be on all day long. The advantage of this is that it is fast and information can be passed on quickly. They can avoid the disadvantage by having broadband where you pay a certain sum for unlimited access.

Fax - Faxing allows people to have copies of documents they may require. Faxing is similar to emailing. But you do not receive the messages on a computer but a fax machine. Messages can also be sent via fax to tell employees of urgent messages, meetings, memoranda's, newsletters and import notices are amongst things that can be sent by via tax. The advantage of this is that import documents can be received quickly but the disadvantage could by that not everyone within the business would actually have a fax machine to use, or they may not look at it very often. these people to receive information wherever they are at whatever time. Pagers, in general are a good thing as it allows people to receive information on the move. A disadvantage of this would by that you cannot send long messages, all messages must be short, and this could lead to misunderstanding of messages. Words may be shortened and this may lead to more of confusion.