Analysis of strategy implementation at the Coca-Cola Corporation

This research paper examines the organizational design of the Coca Cola Company and describes its structure of organization. The organizational structure of the Coca Cola Company is clearly unique. Regional managers employed by the company are given powers to make decisions. The company has ensured that it responds quickly to the changes in market demands by allowing localized decision making. The management at higher level is, consequently, given the time they need to think through long term strategies and plans. Although Coca Cola has made significant efforts to reinvent its brand and products on the market, its growth has slacked in recent day. There is an indication that the company should rethink its strategy for products if it is to remain relevant and competitive on the market. This study sums up by pointing out the changes recommended to keep the company growing fast.

It is evident that Coca Cola remains the one with the soft drinks that sell the most in most countries where it operates. Even the Middle East; the only region in the world where Coca Cola is not the top soft drink, it still controls 25% share of the market. It also recorded a double-digit growth in the year 2013. This study examines the design, strategy for implementation and structure of the Coca Cola Company. The primary aim is to figure out how the mission strategy of the company relates to the organization’s components for implementation. Of importance is to understand whether the employed strategy is anchored on the values, vision, mission and the organizational structure.

Coca Cola, as a company features a separate International Division. The international staff of the company works separately, and is isolated from the on goings at the head office in their activities. Coca Cola has numerous divisions across the globe. It also features presidents in charge of continental divisions. There are five continental divisions at Coca Cola (Coca Cola Company, 2018).
· The North America Group
· Latin America Group
· Pacific Group
· Eurasia &Africa Group
· Europe Group (Coca Cola Company, 2018)
There is a vice president allocated for each continental division, they control are in charge of the subdivisions based on countries or regions. The structure works effectively for Coca Cola because it is a giant company (Coca Cola Company, 2018).
Coca Cola is regarded as an ethnocentric MNC since it operations internationally are significantly similar to their local ones. Coca Cola sells the same soft drinks, and operates the same way regardless of the country, continent or region. The head office is fully in touch and control of the company’s operations (Coca Cola Company, 2018).

Coca Cola has realized that there is a need to meet the changing customer demands. In the nineties and even recently, the company advocated for the decentralization of its operations for that purpose. Two operating groups suffice for Coca Cola, i.e. the Corporate and the Bottling Investments (Narayan, 2010). Other operating groups split on the basis of the various regions including European Union, Eurasia, North America, Africa and the Pacific. The regions are further split into geographical areas (Coca Cola Company, 2018). Through decentralizing their decision-making process, they can respond fast to the ever-changing demands of the market. The management at higher level is allowed time to concentrate on long term plans. Some company divisions such as innovation, human resource, strategy planning and finance are located within the company’s corporate division. Some of the functions are carried out at lower levels in the various regions of the company. Nevertheless, the highest-level staffs make most of the decisions (Narayan, 2010). A recent example is the decision to sponsor the World Cup. It was made at the corporate boardrooms. Still, it is the corporate headquarters that gave permission to the local divisions to design commercials and advertisements that would impress the local markets.

In 2004, Neville Isdell was chosen as Chairman of the Coca Cola Company. He started using complex mechanisms for integration. Isdell made use of top manager teams to tackle the problem of the organization’s painfully slow growth. Meetings were held at the local level, and he made sure that employees were kept posted on the new developments and decisions. He also made sure that the intranet was completely changed to enable the company find a medium that could allow real-time information sharing. Complex integration mechanisms are the best when it comes to big organizations such as Coca Cola. Each section of the organization should be empowered to quickly share information (Chokheli, 2015). The organization appears to be succeeding in balancing mutual adjustment and standardization.

A guidebook for all employees to study and internalize how everyone in the company should operate is provided. If there is a case of improper conduct, the culpable employee is subjected to disciplinary action. Mutual adjustment has increased in the company’s operations. The turnover of staff has reduced (Chokheli, 2015). Following the changes initiated by Isdell, the company has started witnessing faster growth. Indeed, the equity return for stock traders moved from a negative return to 20% (Narayan, 2010). Such a balance is critical because it gives flexibility to employees. On the positive side it gives a working environment that is predictable (Chokheli, 2015).

The organizational structure sports both organic and hybrid characteristics. The company places heavy premium on responsiveness. Complex integrating mechanisms in use are reminiscent of a structure that is organic. The information gathering methods make it possible for a bottom-up flow of information. The intranet, on its part gives room for information to flow laterally (Chokheli, 2015). Through surveys, the company has seen the need for standardization and simplification. High standardization and centralization are linked to the mechanistic structure. The bonding of the two structure types appears to work perfectly for the firm (Narayan, 2010). It is important to be flexible when dealing with vast and diverse markets. High standardization helps the organization to maintain efficiency in its production sphere. Integrating mechanisms help the company to coordinate more easily for such a huge conglomerate (Chokheli, 2015). The choices that he organization makes are made to remain in line with the goals through centralization. Since there is free information flow in the company, top management will access information faster; something that will enhance responsiveness and flexibility (Chokheli, 2015).

Coca Cola has a workforce of about 94800(Narayan, 2010). The organizational chart shows that there are over five corporate hierarchical levels (Coca Cola Company, 2018). The tall hierarchical structure means that there are some communication issues. A survey revealed that one of the problems the company faces is that the staffs do not have a clear set of goals to accomplish. Another problem of tall hierarchies is that people lack motivation. These are the issues that have informed the company’s decision to engage more with its staff at the local level

When intranet is improved in its functions, it will enhance communication across every level, vertically and horizontally. The management at the higher level will be in touch with the employees at the frontline (Narayan, 2010). A report released in 2006 indicates that the operational span appears slim for the company’s CEO. The CEO is part of the Senior Leadership. The team constitutes heads of the eight groups of operation. It also includes top officers from segments such as technology and marketing and innovation (Narayan, 2010). The leadership team enables the CEO to receive feedback from a wide range of sources spread across the wings of the company (Narayan, 2010).

The decentralization move has led to a change in the structural organization of the Coca Cola Company. There are now new offices to make it easier for implementation of decisions made at the local level. Some departments have been centralized (Chokheli, 2015). From the creation of the Bottling Investments Division, it is apparent that the company is adopting a hybrid organizational structure so as to exploit both organic and mechanistic structures, even as they reduce the negative effects of the two (Narayan, 2010). The structural changes undertaken by the company in recent years have impacted positively on the company’s growth. The employees are also satisfied more.

Relationship between Coca Cola Company's mission, strategy, and organizational components crucial to implementation

The path followed by Coca Cola is inspired by its mission. It outlines the company’s purpose and presents the standard used to measure the actions undertaken by the company (The Coca-Cola Company, 2018).
· To refresh the world
· To create value and cause a difference
· To inspire happiness... (The Coca-Cola Company, 2018).
Five Strategic Actions
1. Aim at profit growth and revenue push
2. Invest in our business and brands
3. Simplify our company
4. Keep focus on our core model of business
5. Improve efficiency The Coca-Cola Company, 2016)
It is clear from the organization structure and design above that the objective is to implement the mission statement and the strategic plan. Owing to effective structures, the management remains stable. Decentralization has helped to solve the human resource and culture challenges. Consequently, the company has maintained profitability in the harshest of environments.
Coca Cola Company ethical "prescriptions" as embedded within The Company’s strategic management process
1. Articulate a complete strategy, including purpose (Schulman, 2006).
The strategic action of Coca Cola as a company encompasses simplicity, efficiency, growth of revenue and the core business model refocusing. The strategic organizational design of the company remains sound, and tweaked to make sure that it achieves the strategic objectives.
2. Explicitly articulate values as a key component to the strategy. Values must also be real, and must reflect actual behaviour, especially among the organization's leaders (Schulman, 2006).
The Company’s values guide its every action. A summary of the core values includes
· Quality: we do well what we have to do
· Collaboration: take advantage of the collective genius
· Accountability: it starts with me
· Diversity: remain as inclusive as the brands we produce
· Passion: heart and mind commitment
· Integrity: remain real
· Leadership: shape a brighter future

Management and decision-making efficiency remains a central focus for Coca Cola. The structure of leadership is inspired by its core values mentioned above. Adherence to these values has sustained the company business.
3. Have the right organizational structure (Schulman, 2006).
The organizational structure of Coca Cola is holistic, focused and detail-based. Leadership, the decision-making process and communication channels have been redesigned over the years to make it more efficient.
Changes I would make as the CEO of Coca Cola

According to the research report by Vartanian (2007), consumption of soft drinks and added sugars has risen alongside the rise in people’s body weights and intake of energy in the US. Owing to the multiple sources of energy provided in the normal diet, a single energy source can significantly contribute to the total energy intake. The finding is a basis to encourage a reduction in the consumption of soft drinks (Vartanian, 2007). Since soft drinks provide energy with little nutrition, they are the main culprits in the rise of a range of health conditions including diabetes; good reasons to recommend soft drink consumption cuts (Vartanian, 2007).

The findings by Vartanian (2007) are just but part of the widespread health concerns about high sugar and carbonated drinks. Medical experts are on record for recommending more consumption of organic juices and use of mineral water. The Coca Cola Company has maintained a consistent focus on carbonated drinks over the years. As a CEO, I would explore new product areas that address the current health concerns. I would venture into the vegetable and fruit juices, and the use of mineral water. I would reinvigorate Dasani water as a brand, so as to reflect a positive and more market-sensitive approach to business. Basing my argument on the need to diversify, I would vouch for local managers to consider locally popular and available beverages and drinks such as apple juice, grape juice and tea, among others. Such a move would cushion Coca Cola against the imminent drop in the consumption of high energy and carbonated drinks. According to Nasdaq (2018), the annual financial performance of the Coca Cola Company has declined as shown below
Table 1
Period Ending:
Trend
12/31/2016
12/31/2015
12/31/2014
12/31/2013
Total Revenue
$41,863,000
$44,294,000
$45,998,000
$46,854,000
Net Income Applicable to Common Shareholders
$6,527,000
$7,351,000
$7,098,000
$8,584,000