Coca Cola Company is an American Multinational Corporation of beverage that deals with manufacturing, retailing, and marketing of syrups and non-alcoholic beverage concentrates. Most people know the company through its flagship product known as Coca Cola invented in 1886 by a pharmacist called Smith John Pemberton in Columbus Georgian. The Coca-Cola brand and formula came into existence in 1889 by Asa Candler who took part in the Coca-Cola incorporation in 1892. Besides the Coca-Cola beverage, Coca-Cola now is offering over 500 brands in more than 200 countries (Firm, 2002). In addition, theoretically, it serves an approximate of over 1.7 billion servings daily. The company operates on a franchised system of distribution from 1889. The company produces syrup concentrates sold to various bottlers globally. For a long time now, there exist numerous cases of war existing at the Coca-Cola Company. Some of which resulted from competition from one of its competitor Pepsi. In this paper, focus will be on analysis of the various cola wars and the resultant impacts. This is so because there are several wars witnessed by Coca-Cola Company internally that does not involve Pepsi. As a result, these are some of the wars for analysis in this paper.
According to the research, leadership or management of Coca-Cola Company has been among the family members. This is because, a snapshot of 1978 showed up to three generations of Mr. Browne’s family. Despite the top management of the company by Browne’s family member, Mr. Browne recently sued Coke. This was one among the latest cases against Coca-Cola Company. He was not the only who wanted to sue the company, but also 54 other independent enterprises also wanted to sue the company. The sue wanted to bar the company from an attempt to breach a tradition that was a century old, which companies that did the packaging of sodas delivered and arranged sodas in selves in grocery stores. According to the demands of Wal-Mart Stores Inc., it was the responsibility of Coca-Cola Company to deliver Coke-produced beverage directly to its warehouse (Terhune, 2006).
Coca-Cola Company had agreed to do so through a company of their choice within the territory. This move could not have a direct impact on small bottlers but could ultimately threaten their survival at the end. According to the reasoning of a majority, direct delivery to Wal-Mart is an excellent idea that other chains may demand. This means that the close relationship that exists between the small bottlers and groceries will diminish, hence suffering in the local market. As a result, relationships are the common ways that bottlers believe that they will drive sales within their territories, thus enabling them to have own business success. According to the agreement of 1899, Coke bottlers got an authority to handle distribution and sales in their territories. This authorization went down to display its products in grocers. It is essential for Coca-Cola Company to rely on bottlers who have the experience to facilitate growth assortment of new drinks and ensure market promotion of the product. This is due to the symbiotic relationship with local bottlers that Coca-Cola Company has worked with and enabled it to grow enormously. The main issue of concern then was the disagreement between the company and local bottlers on the company’s intention to dispatch products to Wal-Mart and display them in shelves. However, according to the agreement, Coca-Cola Company had an authority to distribute and display their products in local grocers (Chang, 1997).
In 1930s, the number of bottlers was over 1000 in US. However, during the 1980s and 90s the company encouraged consolidation, which led to their reduction up to 76 nationwide. Currently, the company sales in US are reducing due to customers who are shifting from purchase of Coke products to purchase of energy drinks, expensive lattes, and bottled water. This is a clear indication of a decline in the purchase of Coke products. As a result, the worldwide growth last year was by 4% compared with 9% of 1997. In addition, in the soft-drink market of US sales have reduced by 10% over the past five years. Its market share of up to $68billion per year is low than those made nine years ago. This is because, Coke stoke sold for $89 in 1998 now goes for $40. This is because most people due to wars within the company have lost confidence with the product thus shifted to that of the competitors. According to Donald Knauss, the head of Coke in the North America business, Coke aims at avoiding bottlers, but shortcomings associated with that move exists. As a result, it is essential to reach a consensus and work towards the needs of the customers. In the case where Wal-Mart wanted Coca-Cola Company to deliver its products to the warehouse, the plaintiff believes that it is a breach of contract, while the defendant states that he has permission. The lawsuit called for preliminary injunction by the court to bar Coca-Cola Company from delivering over 77% of its products to the warehouse (Miller, Vandome and McBrewster, 2009).
According to research, the top executives of the company have worked to change the terms of 1899. However, in 1920, most of its bottlers attempted to sue the company due to the change content to cover rising prices of sugar. In 2004, the company employed a CEO who had been a bottler before, because he had spent over half of his career bottling overseas. When he got employment, he aimed at changing policies that were dominant at Coca-Cola Company.
First, he stated that prices charged during the sale of products needed a reduction, because financial health of bottlers had improved. He went ahead to tell some investors that their response to customers through franchise system had not been to the level best. His attempt was to give Coke Company a leeway of pricing concentrates. He believed that this way, the company could be able to overdo it to rival Pepsi Company. It is worth nothing that wars in an organization can result due to poor choice of management strategies or models employed. According to research, it is clear that the Coca-Cola president and current director have been on the company’s heart for more than three decades. In addition, it is clear that he intends to extend his relationship with the company for at least one year (Mintzberg, 2003). He intends to do so at the shareholders annual general meeting scheduled at Wilmington, Delaware. Mr. Keough, the director, believes that as he approaches his 80th birthday in the month of September then the length of his service will have a limitation. As a result, he only intends to serve in the company for another one-year and not more than that. The main weakness that is dominant at Coca-Cola Company is the fact that most of its top officials are family members. As a result, cases of misunderstandings with nonfamily members are common.
Pearce and Robinson 11 steps of model in this area
In every research, information can be from either primary or secondary sources. The primary sources refer to information collected firsthand from the field. This involved the use of questionnaires, interviews, and observation. Questionnaires refer to instruments used in research that consists of a set of questions used to gather information from respondents. In the construction of questionnaires, one can construct open-ended questions or close ended questions. Open-ended questions allow the respondent to give own views, while close ended questions have a yes or no response only. This means that the respondent may not have an opportunity of expressing own views, as there are restrictions to give a yes or no as a response. Interview refers to a conversation that involves the interviewer and the interviewee. In this case, the interviewer poses a question to an interviewee, with an intention of getting an appropriate response. Observation is a data collection method employed in a research where research watches situations of interests and records relevant actions, facts, and behaviors. All these primary methods of research have advantages and disadvantages, for instance, the main advantage is that a research has full control thus allowing him to focus on specific issues. On the other hand, the main disadvantage associated with it is that the whole process of data collection is expensive and time consuming.
Secondary research has a wide use by a majority of researchers. This process involves obtaining information already gathered by a primary researcher. This includes a collection of information sources such as third parties that include websites or electronic database, magazines, newspapers, journals, and books. Some of the advantages associated with this method include the ease to access; low cost incurred in acquiring information; and ability to clarify research questions according to the researcher’s needs. On the other hand, some of its disadvantages include the fact that it may not address all the research problems in a timely manner. In addition, it is not able to address specific research needs, because, in most cases, they address issues from a general point of view. However, regardless of the few disadvantages associated with secondary research method, this paper will analyze results or information recorded in secondary sources. A majority of information used in this paper is records kept in books according to findings or early primary researchers regarding Coca-Cola Company (Terhune, 2006).
In 2005, Coca-Cola Company recorded revenue of $270 million that was about 7% high compared with profit made in 2004. This was due to change of the top management of the company. In addition, this resulted because then the manager of the company spent a majority of his career time in bottling thus had the relevant experience. In addition, when Mr. Browne took over he ensured building of sophisticated stores for delivery to ensure that services to the customers commenced for improvement. This was possible by ensuring that drinks delivered to grocers reduced, but done frequently to reduce waste, and at the same time offer better services. Wal-Mart stores got deliveries twice a day in seven days within a week. However, one main weakness within the company that most people do not notice is the fact that Mr. Browne accesses data regarding checkout sales after every 15 minutes (Terhune, 2006).
This is not in order in management as there is the need for segregation to avoid manipulation of records for personal benefits. Wal-Mart accounts for over 1/3 of the company’s sales. Coca-Cola Company visits Wal-Mart twice a day while bottlers from other companies visit them three times in a day. This is also another treat to Coke products as far as service delivery is a concern. In addition, it is worth nothing that, according to research, Coca-Cola Company delivers about 10% of its products to Wal-Mart. This means that it is crucial to offer quality services to Wal-Mart. According to Wal-Mart, they want Coke Company to deliver products to their warehouse, but at the same price as charged earlier. However, Coke Company states that they intend to deliver their products to Wal-Mart warehouse, but that may not occur immediately as it may require some more time. In a motion where Coca-Cola Company aims at dismissing the suit, they state that, post-contractual discussions are not binding now. Therefore, plaintiffs should not restrict Coke’s actions in their territory. This means that Wal-Mart as the plaintiff should bear this in mind. As a result, top executives have a task of testifying Coke’s suggestion. It is worth nothing that, over the past several years, Coca-Cola Company has had top executives being family members. This is a weakness as far as professional management and models are a concern (Terhune, 2006).
Analyzing the case from the theoretical framework of at least two of the articles discussed in the course.
In most cases, firms dealing with multiple products, technologies, or markets have a complex, strategic management system. However, the basic model used to analyze operations of strategic management in an organization is similar. As a result, the basic, strategic management model can apply to analyze Coca-Cola Company’s management. This model is significant as it is capable of serving three main functions. First, it shows the relationship and sequences of the strategic management components in an organization. Secondly, it gives an approach of analyzing case studies regarding organizations enabling analysts to develop strategy formulations. Indeed, there has been a slippage and change in noncarbonated drinks content needing correction as soon as possible.
However, as the company aim to mend mistakes already made, some company executives believe that the bottling network that is in fragments needs change. In fact, the lawsuit against the company is because the business is a family run; hence the issue came up due to clinging to the history. As there are attempts to correct issues within the company, grocery retailers are calling for the need for efficiency in the supply chain. In most organizations, it is worth nothing that there are components of strategic management necessary to implement. This is also the case at Coca-Cola Company (Firm, 2002). Some of the components include the company mission that outlines the unique purpose of the company and differentiates it from other companies or competitors. For instance, when the new CEO got employed in 2004, his main aim was to ensure achievement of the company’s mission because; in most companies, corporate social responsibility is paramount. As a result, the company’s mission should outline how it intends to contribute to the surrounding society.
At Coca-Cola Company, it is essential to set own social responsibility aspirations just as it set targets in other areas. Internal analysis of the company is also essential. This is where the company analyzes the quality and quantity of its financial, physical, and human resources. In addition, this also involves analysis of strengths and weaknesses of the organizational and management structure. This also involves comparison of the past successes and failures of the company with the current performances.
At Coca-Cola Company, on analysis of management, it is worth nothing that family management has been dominant. This is a failure because, in strategic management, it is essential to consider employment of non-family members to avoid chances of collusion and theft in the company. On analysis of finance within the company, there has been a significant flow of the revenue and losses have been at it is low in most cases. This is a positive movement showing that the management and marketers within the company are doing a fabulous job. External environment of a company are forces that have a significant impact on company’s strategic options. This refers to pressure exerted by competitors. Indeed, competition is essential to ensure that a company works towards providing quality products and services to its customers. However, it is essential to have a healthy competition that includes three segments such as the operating environment, the industry and the remote. At Coca-Cola Company, there are competitors who deliver their products to Wal-Mart three times in a day. Coca-Cola Company delivers its products to Wal-Mart only twice per day. As a result, the competitors are posing a health competition to Coca-Cola Company essential for its growth (Pearce and Robinson, 1991).
The implications of the case for middle managers
Strategic analysis and choice are also essential as this enables a firm to identify opportunities that are attractive and interactive. Such opportunities offer an avenue for company’s investment. However, as the company works towards exploiting existing opportunities, it is vital to screen them against the company’s mission. As a result of screening, it is possible to select options that will result in strategic choices. In addition, it will ensure the combination of generic and long-term objectives that will place the company in an external environment enabling them to achieve a set mission. In the case of Coca-Cola Company, it is essential to identify opportunities to exploit. This is important so that the company can expand the market share and increase its volume of sales. In strategic analysis and choice, it is necessary to identify effective strategies that can facilitate a sustainable competitive advantage.
A company such as Coca-Cola Company has its managers focusing on the combination of businesses that can maximize value to shareholders. It is essential for the company to come up with long-term objectives that can drive it towards achieving long-term strategies. Long-term objectives should work towards profitability; creation of a competitive position; productivity; employee development; technological leadership; and public responsibility. The main long-term objective of Coca-Cola Company is to continue being the leading supplier of non-alcoholic beverages and syrups globally. To ensure the company’s achievement of the set objectives, it is vital to come up with generic and grand strategies. Such strategies include differentiation, low cost, and focus strategies and have the potential of leading the company towards achievement of objectives. It is essential that enlightened managers identify strategies that can enable them to minimize costs and maintain their competitive advantage.
This is what Coca-Cola Company is up to because, at some point in time; Wal-Mart filed a lawsuit against the company’s attempt to boycott the agreement of delivering products at their stores at the same price stated earlier. However, the company attempted to deliver itself from the hook by stating that old contracts are not binding now. This means that the company aims at minimizing costs incurred and maximize revenue earned while maintaining the competitive advantage. This relevant strategy will facilitate the company’s to achievement of long-term objectives. While trying to implement the grand strategies, it is crucial to note that every grand strategy has unique packages of long-term objectives. In the case, of Coca-Cola Company some of the grand strategies to use included innovation. In addition, market development; product development; strategic alliance; horizontal integration; vertical integration; and concentration are essential. This will enable the company to work towards increasing the sales volume through an increase in market share thus increasing the company’s revenue.
In strategic management, it is vital for companies to come up with short-term objectives. These are objectives, which the company aims at achieving over a short period. In most cases, such objectives are consistent with the long-term objectives. Some of the short-term objectives at Coca-Cola Company include their desire to make high amount of sales daily, to minimize the level of employee turnover, and attract a large market share daily. Short-term objectives are essential as they provide daily guidance to the company’s operational and functional activities. As much as generic and grand strategies are a concern, it is necessary for the business functions of Coca-Cola Company to undertake activities that can enable them to have a competitive advantage. In most cases, companies define short-term objectives to act as tactics that will enable them to outline their duties clearly.
Such functional tactics should be brief to facilitate short-term objectives and ensure the establishment of a competitive advantage. In addition, it is vital to identify or come up with policies that can empower action because currently speed is crucial for today’s success in the competitive market. The only way that companies can conduct themselves in the necessary speed is by allowing decisions whenever possible at the organization levels. This is necessary because decisions at all levels whether high or low level has an effect on the organization performance. In addition, they have the ability to decide on the organization performances (Pearce and Robinson, 2005). The board sets policies in an organization and responsible for establishing ongoing operations in a manner that is consistent to strategic objectives of the firm. Policies aim at increasing the managerial effectiveness through routine decisions standardization and empowerment of managers in business strategies implementation.
This is what also happens at Coca-Cola Company because the company’s board members set most of the policies. As a result, the managers in the company have a task of only implementing already set policies. It is essential to have the board members playing a role of policy formulation because it is a requirement in management to have segregation of duties to ensure that every party plays the role to the fullest. In addition, over time the middle level strategic managers of the company have not had an opportunity of expressing own views regarding what happens within the organization. Therefore, the process of reengineering will give them a chance or opportunity to express themselves. Therefore, restructuring will mean that changes to necessary policies will commence thus enabling incorporation of issues leading the company to achievement of set objectives.
Strategic Alternatives and Recommended Strategy
At times, according to the requirements in management, reengineering, focusing, and restructuring is necessary within the organization. This process is essential to ensure that managers are able to implement strategies through action functional tactics and appropriate plans. This process only takes an internal focus, as it requires the works of business to be effective and efficient to ensure that strategies are successful (Pearce and Robinson, 2009). Some of the issue that needs consideration during this process includes questions such as what is the most appropriate strategy of organizing ourselves so that we can achieve the mission? How can we reward employees to encourage outstanding performances? How should the employees and customers behave so that the company can work towards its objectives? Reengineering, refocusing, and restructuring of the organization are a critical process in implementing strategies where managers attempt to rejuvenate activities within the organization. In this process, the company review leadership, culture, company structure, and the reward system to facilitate cost competitiveness and quality delivery. This is essential at Coca-Cola Company, if the company aims at retaining its original reputation. However, middle level managers have no complete elimination from contributing to the wonderful performances within the company.
This is so because, recently, there have been changes in the strategic management of the company aimed at defining the role of middle level managers. For instance, in 2004, the company employed a CEO who had experience of working in a bottlers company (Roney, 2004). As a result, the CEO tried as much as possible to create strategies to lower costs, improve designs, increase efficiency, and increase brand appeal. This was a brilliant move aimed at enabling the company to increase its revenue and minimize unnecessary costs. This was possible for the manager because he ensured that operations improvement was by increasing the roles of the middle level managers. At some point in time, people have ignored the role of middle level managers. Even at Coca-Cola Company, most of the people may perceive that the CEO or the top executives of the company play the only essential or vital role in the company. As a result, they have gone ahead to put blames on the top managers in cases of failures. This should not be the case because without the middle level managers strategies formulated by top management may not find their way to implementation.
Coca-Cola Company is an international manufacturer, retailer, and marketer of non-alcoholic beverages. This is according to the statistical findings of research. The company has made it possible to be the leading globally due to its ability to offer quality products that suits customer demands. However, at some point in time, the company experienced some wars with Wal-Mart and Pepsi Company. Wal-Mart filled a suit against the company stating that the company violated the agreement made earlier. On the other hand, Pepsi Company has always been a treat to Coca-Cola Company because it is a leading competitor. In business, a healthy competition is essential as it encourages the quality and convincing performances. To ensure that a company produces quality performances, appropriate management is essential (Forster and Browne, 1997). Over time, Coca-Cola Company’s management has been by the family members only. In professional management, it is not wise to have family members working in the same company. In addition, people perceive that the top-level managers play a vital role compared with the middle level managers. However, it is worth nothing that all mangers in an organization play a crucial role in their level. Therefore, equal consideration is essential for the success of the organization at all levels.