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Essay: Coca Cola

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Introduction and Operations Background
Coca Cola is in a global business that operates in a local scale in every community where business is made. With local reach, Coca Cola was able to reach globally because of the strength of its system which is the composition of tis 250 bottling plant partner across the globe. There is no complete and absolute control and ownership by Coca Cola on all of its bottling plant, although the Coca Cola system is not a single entity from a managerial or a legal perspective. To the consumers, the company is viewed as Coca Cola, however internally the Coca Cola System operates through multiple local channels. Concentrates, syrups and beverages are manufactured by Coca Cola as well as bottling operations. The brand is owned by the company and is the one responsible for marketing initiatives for brand consumers. The manufacture, packaging, and merchandise distribution are done by the bottling partners distributes it toward the vending partners and customers who then sell it to the final consumers. The local customers such as restaurants, street vendors, grocery stores, movie theatres, amusement parks and convenience stores collaborate with the bottling partners for the purpose of having the localized strategies can be implemented to develop a long term partnership with the brand. Coca Cola boasts of a rate of 1.9 billion serving of these customers in a day. The company-owned bottling operations in Janauary 2006 were merged together to create the Bottling Investments Operations Group which happens to be Coca Cola’s second largest bottling partner in terms of unit case volume.
Coca Cola owns and market four of the top five non-alcoholic sparkling beverage brands in the world such as Coca-Cola, Diet Coke, Fanta and Sprite. Coca Cola seeks growth opportunities and efficacies in line with its Vision 2020 strategy. In 2013, Coca Cola adopted a new global operating structure of which it classified three segments of operation: Coca Cola Americas, Coca Cola Bottling Investment Group (BIG) and Coca Cola International. The Europe, Eurasa, Africa and Pacific groups consist the international business of Coca Cola while the Latin and North America consists the Coca Cola Americas. The maximization of the efficiency on the other hand of the production distribution had been the Bottling Investment Group focus and concentration. In Mexico’s bottler Coca Cola and is now considered as the largest independent bottler of Cole, FEMSA, they included a 29% stake while it include 23% of Hellenic Bottling in European bottler and 29% of Amatil Coca-Cola, which is both a distributor and bottler in Australia, New Zealand and surrounding countries of Coke.
The System wide Performance of Cocal Cola
Associates from the Coca Cola Company and several of its largest bottling partners met in April 2007 for the first time to plan the development of a core set of performance indicators for the system of Coca Cola. Work groups of company associates and bottling partner representatives had been formed to establish feasibility due to the complexities in terms of legal and management as well as environmental issues involved.
Bottling Investment Group
The division of Coca Cola that is dedicated towards the Coca Cola bottling investment operations across the globe. Leadership is provided by the Bottling Investment Group in order for critical market growths to be driven and to have a fast venture on capital and so that structured or ownership challenges are sometimes amended. BIG is centered on long-term sustainable growth and facilitates as if they were the primary stakeholder of the company. The BIG is present in 19 countries and works to maintain franchise and company owned bottlers in a healthy balance of the system,
The Product Life Cycle
The product life concept is taken from the fact that the taste of the consumer as well as technology are changing and takes time to adopt to the preferences of the consumer. When a new product is being launched and while time is consumed before it is accepted widely by a very significant majority of customer based and at that point in time only will the revenue and sales will commence to grow. As new products is started to be introduced by certain companies, a saturation point will be reached in the market and eventually decline and consumer switch to the new product. This is the point where the use of the product life cycle is relevant and it can be best used as it can distinguish a particular brand, a group of products or a single product. There are cases where the product life had been very fast like the electronic products where there is a rapid proceed of the product life cycle and may only last for a few months only as new models had begun to enter into the market. There are cases also that the product life cycle of a particular product may last many years, a 100 years. Take the case of Coca Cola the product life cycle of a particular product may require a century to complete its life cycle. Take the case for example of the basic product life cycle for an internal combustion engine (ICE) may last for many years without alterations such as improved batteries and fuel system. The product life cycle is consist of five stages and is as follows:
1. Product Development
2. Introduction Stage
3. Maturity Stage
4. Saturation
5. Decline
(Source: Stephen, 2013)
The graph above best describes the normal curve of a product life cycle. Coca Cola has too many brands to be evaluated in the most accurate manner, hence in this product life cycle, the top and most well-known brands shall be considered which can potentially as well generate a significant turnover for Coca Cola. Here are few of the list:
1. Coke (lemon, Diet, caffeine freecherry, lime, vanilla etc.)
2. Dr. Pepper (recently purchased off of Cadburys Schweppes)
3. Oasis (Also bought off Cadburys Schweppes such as summer fruits, Berry and Apple, and Oasis Light, Berry and Citrus Burst.)
4. Dasani (various flavors of water)
5. Sprite (lemon and lime carbonated soft drink)
6. Fanta (Diet, Berry burst, fruit twist, apple splash.)
1. Product Development
This is the stage where there is the occurrence of the majority of the marketing planning. The product is being selected and developed by the marketing. The marketing also identify and select the target market as well as the ones responsible for the marketing mix and marketing plan. Although it is considered to have a pre-launch so that there will be attempts to build a good awareness among customers most particularly if such product they released is a radical new innovation. It is expected at this point in time that Coca Cola may not be making profit at this point of time as a lot of investment is going on the promotion of the product, the costs of setting up and production. The design of the product and planning of the product are proceeding on this stage as well as the market research.
2. Introduction Stage
When the product is first launched and has been made known in the public starts the introduction stage of the product sales and revenues are probably low at this point in time, customers on the other hand have not had much contact with the product and can be slow to recognize the product as a superior to previous offerings. Advertising cost is expected to increase
It is expected to have high advertising cost such as companies are trying to increase their levels of awareness of the customers as well as the acceptance of the customer of the new product. Announcing the product before it is being launched is one of the best strategy that can be used by the company to build up anticipation of the product although the risk of alerting competitors who can develop products that can compete. As such, this strategy is intended often only done when a company has a unique offering, computer game, new film, computer game or technologically superior device such as the iPod or iPhone.
3. Growth Stage
Once customer awareness and acceptance of the product has grown, the growth stage has been commencing and hence there will be a phenomenon that an ever increasing customers being to buy the product and thus there will be a rapid growth of revenue. The self-reinforcement cycle happens during this stage: as customers demand the product more distribution channels offer it, which further increases the level of awareness and hence increases customer demand. It is the stage were growth could be experienced in a gradual manner in Coca Cola. At this stage, the product is still not making a lot of money gained from sales as being injected back into the promotion of the product. At this stage the product is becoming well known and beginning to pay back some of the setup costs.
4. Maturity Stage
Customer demand is generally more stable when a market reaches maturity, and thus this stage is actually the stage where Coca Cola is expected to be most profitable as the company as generally established its position in the market and its share in the market and can work things out to exploit it. There is less incentive for new entrants to enter the market as the rate of sales growth slows in this phase and therefore the incumbent can concentrate on the maximization of profits. This will be helped by strong levels of brand awareness built in the growth phase, which mean that companies do not need to advertise as much. However, competitive pressures may still be strong as existing incumbents battle for market share and continue to try to demonstrate the superiority of their product. As the market develops to competing products will become increasingly similar as companies understand better the demands of the customer and being to reproduce the most successful product. This can result to the strong focus of Coca Cola towards the differentiation of products from competing offerrin as well as the encouragement of customers to switch to their offerrings. For Coca, there is now a fulfilled initial demand, of which it cannot just sit back and relax now because of competition is nw going in to come into the market to share a price of their pie. There is now a reduction in the sales increases as well as an indication of a profit drop.
5. Saturation and Decline Stage
Sales levels eventually will begin to fall as the level of competition may be starting to increase as high as Coca Cola had started developing new products to attract out of the market the customers. The product may become obsolete in one way or another, in addition, and the taste of the customer has a high chance of changing. Brand loyalty that are superior in some products will tend to maintain longer the profitability as will be a good help as competitors may enter the market. The market will shrink subsequently so much that most firms exit the market, leaving just a few left to serve greatly reduced customer demand. The product may disappear altogether if it is completely unprofitable, however the product often remains on the market as a collector’s item or to serve people who depend on it.
Maintenance Task Analysis (MTA)
In Coca Cola, Maintenance Task Analysis (MTA) is the formal, official and proper identification of the different steps, materials, spares and tools, support equipment, skills level, personnel as well as any other issues that should and must be considered for a given repair task (Dap.dau.mil, 2015). A given MTA for Coca Cola also involved the elapse time for the performance and eventually the completion of each task. Both corrective and/or preventive actions are covered under the MTA and when it is achieved, it identifies all the physical resources that are needed to support a system (Dap.dau.mil, 2015). The practice of MTA in Coca Cola starts with the proper identification of each step of the repair process. The steps are analyzed and a description written as to how they would be performed in the physical sense, resources to perform the tasks are identified and may include(Dap.dau.mil, 2015) :
1. Person or persons participating in each step including a narrative description of what they are doing
2. Time duration of each person’s participation
3. Tools or support equipment required
4. Parts and materials needed for the step
Below is a sample Maintenance Task Analysis of Coca Cola with regards to the bottling of the products as listed above:
(Source: Wildeanalysis.co.uk, 2015)
The results are analyzed to determine the following once the activities above are complete:
1. The total elapsed time for the task; start to completion.
2. The skill level of the person (or persons) required to perform the task based on their minimum technical capabilities, knowledge and experience.
3. Any additional training that must be provided to ensure proper task performance
4. Any facility implications such as space limitations, environmental controls, health hazards or minimum capacity requirements.
Lastly, the results of the MTA is analyzed to evaluate the items that had complied with the issues of supportability such as the ease of maintenance or accessibility and standardization that may have been established by analytical tools or functional evaluation earlier. The requirement documents such as the ICD, CDD and CPD are the source of comparison of the physical support requirements. Many of the design limitations may be derived from the actual state requirements. Reports must be made with regards to shortfalls or noncompliant features to the vendor for correction This closes the loop between requirements for the design and the actual results of the design process.
Operational Capabilities
The culture in the operational aspect of Coca Cola had been greatly influenced by the geographic location where it is altered towards the different regions’ employees. The distribution of Coca Cola products had been strengthened by the strategic location of the company as well as it enhances the distribution of their products (Ukessays.com, 2015). Coca Cola at some locations uses their benefit incentives from the government in the process of decentralization of their operations. This had allowed the company to reduce significantly in their operating costs (Ukessays.com, 2015) .
A huge role had been played by the brand image of Coca Cola. In the same manner the high morale of the employees play a huge role in the goodwill growth of Coca Cola. This positive and intangible asset could lead to higher production volume which could in turn influence the financial statements of the company. Due to the economic storm and the fluctuations of the currency as well as the negative outlook from the financial statements, the company was able to achieve growth (Ukessays.com, 2015).
Coca Cola had been using an internal tool in the context of business termed as the VRIO framework. The VRIO is an term that are used to denote the four questions about a capability or a resource to determine the competitive potential such as the question of (Ukessays.com, 2015):
1. Value
2. Rarity
3. Imitability (the degree of difficulty to be imitated)
4. Organization (exploitation ability of other resource or capability)
The manufacturing process of Coca Cola was added value through the innovation and efficiency in the other resources such as location, environment culture and human resource, goodwill, brand image and financial capacity which are all exploited, aligned and organized in Coca Cola (Ukessays.com, 2015). The Human Resource is one of the rarest resources of Coca Cola and is not possessed by the competitors. Customers and competitors cannot replicate goodwill although such resource is not rate which means it can still sustain a good competitive advantage. If assuming given a particular length time, money and resource despite its capacity as well as other resource such as location, financial prosperity and brand image can be emulated as competitive parity (Ukessays.com, 2015).
Key success factors that are required for the success of Coca Cola in the market is that the use of the celebrities must be continued in the campaign for advertising (Ukessays.com, 2015). This would help to attact more customers towards the product. The company can focus on widening their distribution channels as they expand their portfolio. This would help inject additional revenue into the company (Ukessays.com, 2015).
Maintenance Challenges
One of the most vital challenges in the facilities of Coca Cola is that it should be done in a safe and effective manner. It is always emphasized by Safety Officers and Compliance Officers at Coca Cola that one of the most costly element in the facility operation of the company is the maintenance. If there is no proper response it could be a significant yet potential issue in the overall organization of Coca Cola. There are three common types of maintenance in Coca Cola:
1. When something breaks beyond the plan ‘ it is called Emergency Repair
2. Preventive Maintenance
3. Predictive Maintenance
A number of selected challenges, regardless of the type of maintenance and is potentially to happen whenever the maintenance is about to take place in the Coca Cola Plant such as the following:
1. Isolation is required for equipment that is selected for maintenance. This requires the proper turning off of all sources of electrical power to the equipment. It must be disconnected and tagged OFF (Nonprofitrisk.org, 2015). ‘(The source of power should be tagged “OFF ‘ UNIT UNDER REPAIR” with date and signature of person authorizing the procedure.) It implies that nobody shall be tagging ON until the maintenance had been done. The equipment must also be isolated from the other equipment in the same system. The challenge comes when this is not possible because the running batches might be affected which could be costly(Nonprofitrisk.org, 2015) .
2. For all equipment, maintenance procedure must be developed(Nonprofitrisk.org, 2015) . The recommendations coming from the manufacturers must be followed as well as all the drawings, instructions and list of all parts needed. The problem can arise from the lack of resources to allocated a 100% maintenance procedure for all the equipment in the bottling plant of Coca Cola (Nonprofitrisk.org, 2015).
3. Even emergency repairs, there must be a sound planning for the maintenance of Coca Cola plants. The time that is needed for a particular maintenance job to be planned, , read the procedure of the maintenance and get the needed safety equipment will made in the safety of the job and ease in the job completion (Nonprofitrisk.org, 2015). A little planning goes a long way in doing safe maintenance. It is inviting disaster when rushing into an emergency repair. What makes it a challenge is that whenever there are emergency repairs, it is a real emergency that it takes only a matter of time before and the batches will become a discarded? Hence there will be neglect in the preparation and planning (Nonprofitrisk.org, 2015).
4. There must be training on the equipment by the personnel. The proper equipment must be used to carry out the maintenance in a safe manner. Proper safety equipment such as gloves, eye protection and hard hats should always be used. The challenge here is the resource of the company which are sometimes cannot meet such a requirement and hence training and the provision of resources are sometimes neglected (Nonprofitrisk.org, 2015).
5. There must be a complete removal of any safety devices or shields during maintenance. And prior to the maintenance completion, such must be restored properly. Regardless of the type of shield, it must not be left off to “make it easier to fix the next time.” Same as the problem as above, sometimes there is a required training here (Nonprofitrisk.org, 2015).
6. A supervisor who is familiar with the equipment must be present physically prior to the return of the equipment, who must be present to check that equipment to insure that the maintenance is finished, the reassembly of equipment is done, all safety equipment and any tools used in the maintenance have been removed. Plants have only one supervisors which may not be present during nighttime maintenance and hence this is sometimes overlooked (Nonprofitrisk.org, 2015).
7. Before the return to service of equipment, a supervisor who is familiar with the equipment and the maintenance should check the equipment to insure that the maintenance is complete, the equipment is properly reassembled, all safety equipment and any tools used in the maintenance have been removed (Nonprofitrisk.org, 2015) .
Proposed Solutions
The only recommendation is to create a sound maintenance plan activity. The plan must be inclusive of all the safety procedures that are accepted internationally for bottling plants as well as the inclusion of procedures, the needed equipment for the maintenance such as googles and visors, helmets and hard hats and all other personal protective equipment, the MTA identifications of the ones who will conduct the maintenance including their qualification and identification of the supervisor to sign off whenever the job has been completed. If the maintenance is carried out in a repeated manner, this plan can be reused. If it is an emergency or one time repair, before the maintenance is started, the plan should be complete and thorough.
Dap.dau.mil,. (2015). Maintenance Task Analysis (MTA). Retrieved 30 April 2015, from https://dap.dau.mil/acquipedia/Pages/ArticleDetails.aspx?aid=185b16dc-6185-42e4-aa82-d24f1c170869
Nonprofitrisk.org,. (2015). Coca Cola Workplace Safety Toolkit. Retrieved 30 April 2015, from https://nonprofitrisk.org/tools/workplace-safety/nonprofit/c4/maintenance.htm
Stephen, A. (2013). Marketing Diary – Annette Stephen: Product Life Cycle. Annettestephen-marketingjournal.blogspot.ae. Retrieved 30 April 2015, from http://annettestephen-marketingjournal.blogspot.ae/2013/09/product-life-cycle.html
Ukessays.com,. (2015). The operations of the Coca-Cola Company. Retrieved 30 April 2015, from http://www.ukessays.com/essays/business/the-operations-of-the-cocacola-company-business-essay.php
Wildeanalysis.co.uk,. (2015). Coca Cola Maintenance Task Analysis. Retrieved 30 April 2015, from http://wildeanalysis.co.uk/system/photos/2808/original/Figure2-Generic_Plant_Task.gif?1395311356
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