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Coca-Cola Supply Chain Management-A
Coca cola supply chain management
The first section of this paper touches on the Coca-Cola Company's historical background detailing the time of its inception and the brains that were behind its formation and growth. This section also touches on the advertisements that have since been used from its inception. This section finally illuminates its mission statement.
The second section talks about the challenges that Coca-cola has faced. These challenges include competition its products faces from its competitors like PepsiCo. Another challenge that has been highlighted is that of an incidence at the bottling plant in Shanxi Province. Other challenges faced include advertisement flops and changes in the taste of consumers with regard to carbonated soft drinks and their subsequent switch to other brands like juice products. Another challenge that has been highlighted is brand extensions.
The third section of this paper highlights financial implications the implementation of SAP has had on the Coca-Cola supply chain management. Some of the implications here are customer satisfaction, cut in costs, and enhancement of partner collaboration. The fourth section of the paper covers how implementation of SAP by the Coca-Cola has impacted its business/technical approach, its business process, and technology. The fifth paragraph touches on Coca-Cola's SAP implantation plan. The final section talks about the conclusions and recommendations.
Coca-Cola historical background and Mission Statement
The Coca-Cola history begun in 1886 when an Atlanta pharmacist Dr. John Pemberton created a distinctive tasting soft drink that was later sold at soda fountains. Pemberton created flavored syrup that he took to a neighborhood pharmacy from where it was mixed with carbonated water. The resulting product was then deemed excellent by those who tasted it. Frank M. Robinson, who was Pemberton's partner, named the beverage "Coca-Cola." He is also credited with having designed the trademark that Coca-Cola uses to date. Before he died in 1888, Dr., Pemberton sold portions of his business to various parties (The Coca-Cola Company, 2012).
Majority of the business interest was sold to an Atlanta businessman Asa G. Candler, whose leadership prowess made Coca-Cola distribution to expand beyond Atlanta. Joseph Biedenham, in 1894, because of growing demand for Coca-Cola, installed bottling machinery in the rear of his Mississippi soda fountain. He was the first person to put Coca-Cola in bottles. In 1899, three other businessmen, Benjamin Thomas, Joseph Whitehead, and John Lupton secured exclusive rights to bottle and sell Coca-Cola. The three secured the bottling rights from Asa Chandler for $1 (The Coca-Cola Company, 2012). They are credited with having developed what is now Coca-Cola worldwide bottling system.
Early bottlers faced myriad challenges notable among them being imitation of the beverage by competitors and lack of packaging consistency. That was the reason behind approval of a unique contour bottle to make the beverage distinctive. This set the brand apart from its competitors. The contoured Coca-Cola bottle was trademarked in 1977. In a bid to embark on marketing, Coca-Cola, in 1887, dished out coupons that promoted free samples of the beverage (The Coca-Cola Company, 2012). This was considered as an innovative tactic. After couponing, another marketing strategy was newspaper advertising and distribution of promotional items that bore Coca-Cola script in participating pharmacies.
In 1970, Coca-Cola advertising reflected a brand connected with fun, friends, and good times as envisaged in Hilltop Singers who performed "I'd like to buy the World a Coke." In 1980s coke used memorable slogans like "Coke is It," "Catch the Wave," and, "Can't Beat the Feeling." Coke first experimented with computer animation in 1993 as was seen in a popular advertisement "Always Coca-Cola." This ad featured animated polar bears which embodied characteristics like innocence, mischief, and fun. The open happiness campaign was globally unveiled in 2009. It was then followed by "Open the Games. Open Happiness" that prominently featured during the 2010 Vancouver Winter Games (The Coca-Cola Company, 2012).
At Coca-Cola, we believe that the world is rapidly changing and for our business to thrive within the next ten years and beyond, we have to be forward looking as to understand the trends and forces that shape our business in the future. In this way we can move swiftly to prepare for what is to come. In anticipation for what may come tomorrow we have to get ready today. This is the foundation of our 2020 vision. We at Coca-Cola have an enduring mission that declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. We endeavor to always refresh the world, inspire moments of optimism and happiness, and create value and make difference. We always focus on the needs of our customers and franchise partners and are ever ready to get out into the market and listen (The Coca-Cola Company, 2010).
Coca-Cola Business Problems
Muhtar Kent, the current Coca-Cola CEO has tried to rejuvenate an inward-looking, arrogant corporate culture at coca-cola by re-investing cost cutting dividends in brand development. Kent has since admitted that Coca-Cola had lost belief in itself and in its core business. Coca-Cola had become arrogant. When Kent became the Coca-Cola CEO in 2008 he undertook to establish a long-term vision and restore growth in North America (Adi, 2011). Other than the problems that are unique to North America, we are also facing huge credibility problem in China if reports to the effect that Coca-Cola bottling plant in Shanxi Province was closed due to chlorine contamination is anything to go by. We at Coke, however, reiterated that the levels of chlorine was well within statutory limits and proceeded to give a statement to the effect that the rise in chlorine levels were occasioned by pipeline modifications as part of the plant's water conservation plans.
The surge in chlorine levels was attributed to an operational error that resulted into water that is typically used for rinsing purposes to be mistakenly mixed with water used in making the drinks. That aside, our marketing campaigns have also had some challenges. The diet coke ad that featured a young girl skating along the beach was so uplifting; however, it was so disgusting to see spots showing a teenager on board a train from a concert rubbing a coke can under his armpit (Dean, 2005). In 2005, PepsiCo market capitalization soared to $97.9 billion. This put it at less than a billion dollar behind Coca-Cola and put a lot of pressure on Coke. This prompted Coke to launch a new Marketing Campaign in March 2006. The advertisements however relied on marginal brand extensions rather than breakthrough new products.
Consumers continued shift from soda which is coke's stronghold to other alternative beverages like Juice Tea and Water also presented us with a fair share of challenges. We badly need a breakthrough hit. The problem is whether our new catchy ads will put the fizz back into coke. However, we have remained optimistic that our ads will recapture Coke's old magic. We have currently taken to using celebrity endorsers in our advertising gimmick, an art that our major competitor PepsiCo had perfected. We also continue to make the Coke's contour bottle the star because it is still believed to be unique hence the assertion that "There are certain times during the day when only coke will do" (Dean, 2005). A TV commercial where two males shaking and spraying bottle of Coke Zero into face of a friend some up our advertisement woes. It was not one of the best. It was not well thought out. It had many misses as hits.
When we came up with carbonated coffee packaged as Coca-Cola Blak which we pitched as an afternoon pick-me-up for 35-and-over set, it never pulled people away from their afternoon Frappucino fix. Vault, another of our brand, has had problems unseating Mountain Dew among the teens. Some of the new brands that have recently been launched are just brand extensions. Think of Coke Blak and Coke Zero, Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke. Talk of the juiced-up version of sprite, Sprite 3G that was to be introduced into France. That was just a brand extension of Sprite (Dean, 2005).
Financial implications of SAP and Coca-Cola collaboration to manage supply chain networks
SAP provides business software solutions that meet demands of companies of all sizes ranging from small and medium sized business to multinational corporations. It is powered by SAP NetWeaverTM open integration and application platform. The SAP reduces complexity and total cost of ownership By empowering business change and innovation.
The SAPTM business suit solutions helps enterprises to improve customer relationships, enhance partner collaboration, and create efficiency across supply chains and business operations (SAP, 2004). When Coca-Cola implements Systems Application Process, SAP, it stands to eliminate unnecessary paperwork, ensuring that there are proper cash settlement hence minimize waste on cargo space in delivery lorries. Embracing the Direct Store Delivery by Coca-Cola would ensure that delivery productivity is improved hence reduced costs. Coca-Cola Enterprises announced that they would partner with SAP AG in February 12, 2004 (SAP, 2004).
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