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Introduction To The Coca Cola Business Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 5368 words Published: 1st Jan 2015

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John Pemberton invented Coca Cola in 1886, which then was brought out by Asa Griggs Cangler, a business man, whose marketing strategies made coca cola, top soft drink in the 20th century. Coca Cola is a carbonated soft drink, often called as coke, is produced by the Coca-Cola Company in more than 200 countries. Coca Cola introduced other colas under the brand name like Zero, Diet, used flavours like Vanilla, Cherry, etc.

Introduction to HRM

An organisation has many resources like IT, financial, knowledge, human, etc. HRM is related to managing human resource, which plays a very important role in the organisation. HRM can be defined as, an organization’s strategy to managing and motivating its employees and processes to increase organization’s ability to enhance skill and attract more employees.

Introduction to Marketing

According to Kotler (1991), “marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others.” Marketing is a strategy developed by an organization to identify, anticipate and satisfy customer needs, requirements profitably. It also deals with techniques to increase sales, businesses, and communication. It helps organization to build strong customer relationships by creating value for customers and organizations.

Task 1: Employee relations

Employees are very important assets and employee satisfaction plays a vital role in the development of the organization. Satisfaction from the job helps and motivates employees to work more effectively and efficiently. And if employees are not satisfied from the job, they will lose their motivation and cannot perform effectively and efficiently. So, employee relationship is very important for the organization. Coca Cola has huge human resource, as it is spread around 200 countries, so it is highly concerned regarding HRM.

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Employees are the driving force of business, their dedication increases operational excellence, new innovations, and other perspectives. Coca Cola understands this, so it offers employees a great place to work, where employees work to fulfil the organizational objectives but can also work to improve their personality and education, here employees are considered as associates. Coca Cola University is a virtual global university which helps employees to increase their capabilities and education, it provides practical skills and knowledge to employees to win markets and increase production, marketing, etc. Company also helps and encourages employees to pursue higher education, with providing reimbursements for undergraduate and graduate studies.

Improvement in the working environment standards, which supports human rights and labour rights made coca cola, a signatory to the United Nations Global Compact Citizenship. Some other provisions are like employees are shareholders in the company, regular communications with employees to understand their problems and satisfactions, team meeting to upraise their performance, employee survey to understand the needs of employees every two years.

Task 2: Communication approaches with the workforce and Grievance management

Coca cola designed and launched a new system, to take care of disputes between employees and employee litigations, known as “Solutions”, which not only solves the problems but increases employee relationship, it practices grievance policy to get better solution which is appreciated by both organization and employee, formally or informally. Solutions is a process to identify a problem, create a solution for the problem, implement the solution and check how effective and efficient the solution is, which can help to resolve the conflict within the organization. If “Solutions” fails to resolve the problem then it will move to second level known as “Support”. Support is a process where employee will be talk to a mediator, but the mediator is within the organization itself. Here employee can talk to human resource officials or other resources given by the organization to resolve the problem. If “Support” fails to resolve the problem, then it will be moved to the third level known as “Mediator”. Mediaton is a stage where organization appoints a mediator to resolve the problem. And if this process also fails to resolve this situation then employees can get their own mediators, who get paid by the organization. Coca cola encourages employees to participate in this process to resolve the problems as it is the mandated grievance solution for the organization. Organization also provides training to employees who are interested.

Task 3: Benefits of performance, rewards, role of performance appraisal, and recognising achievement

In an organization every employee has a particular task to do which helps the organization to reach its goal, mainly business goals or short term goals. Performance recognition is considered as a process to measure the effectiveness and efficiency of the employee’s performance. Employee’s performance is directly proportional to organization’s growth so, coca cola formulates a strategy which relates individual performance with the organization’s growth and if individuals perform well, they will receive rewards and appraisals which not only encourage employees to perform efficiently and efficiently but also make them loyal to the organization for recognizing their performance.

Coca cola follows a strategy where strategic goals are formed at top level management, after that there are many individual departments, so top level management develops a strategy for each and every department which then will be taken care by the department head. Department head then develops and organizes plans, which are followed by the unit managers. Unit managers develop plans for supervisors and employees to get executed. This kind of management sets goals for each and every employee; this is what makes coca cola a leading organization. Coca cola not only helps employees to study and develop but also creates new offers and challenges for those who want to take responsibility for the organization. The rewards are set in different levels like monthly, half-yearly, and yearly. Performance rewards mainly include bonuses, increment in salary, increment in position, or change in designation.

Coca cola uses PMS, which is managed through 4 stages during business cycle and has multiple objectives like annual performance review where organization appreciates top accomplishers, plan performance for the year where organization finalizes current year developments and accomplishments, rewards and recognitions where again organization recognize top performers, mid-term reviews where organizations prepares plans for competencies and gives feedback to support employees.

Task 4: Performance appraisal and reward management

Definitions: Reward management and Performance appraisal Armstrong and Murlis (2004) said “reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.” Performance appraisal is process with the help of which, management examines and evaluates employee’s effectiveness and efficiency, which can help management to learn about employees, how to improve their work order, etc. Mainly it is used to take decision about promotions, demotions, etc.

Objectives of reward system and Coca cola’s reward system

In general rewards should support organization’s strategy, should help organization to recruit more people and continue to have experienced people, increase motivation, increase psychological and emotional contract, etc. Employee’s motivation and determination in work plays a vital role in organization’s development and growth, one of the best ways to increase motivation and determination is acknowledging the employee’s hard work in terms of rewards. Which not only increases confidence of that employee but it also motivates other employees.

Reward management is an internal part of Human resource management in coca cola; it is not only designed to support business strategies but also designed to take care of motivating employees, increasing the performance of employees, in long term process for the organization. When employee realises that organization is monitoring and acknowledging his/her activities, employee would make sure to give the best performance he/she can give. That is exactly what the organization wants.

Task 5: Financial and non-financial rewards

Rewards, in general are of two types extrinsic and intrinsic. Extrinsic rewards / financial rewards consist of performance bonus, special prizes to increase performance, presenting gifts in festivals to increase attachment with employees. Non-financial rewards include experience of autonomy, choice of which employee wants to work with or allowing employee to choose area he/she wants to work in or department they want to work in, this approach believes that financial rewards are not necessary for employees to work more effectively.

Coca cola’s intrinsic reward system

Coca cola provides monthly, half-yearly, yearly rewards. it provides AIP, annual incentive plan and annual appraisal for personal progress report for performance, employee salary increment, designation change reward. The organization provides health insurances for its employees with respect to their health and safety, and also provides protection and coverage for their vision, dental, disability, etc. Other provisions include life insurance, pension plans, saving plans, paid time off, maternity leave with half and full pay, etc. Under non-financial, organization also allows its employees to study further in their interested areas in Coca Cola University. Provides training to increase performance of the employees with respect to their jobs and knowledge. Some of the key areas to judge employee efficiency are work environment and quality, work presence / working hours, problem solving, customer satisfaction, improvement in work performance.

Task 6: Marketing planning with respect to strategy development

Marketing planning alone, without strategic planning makes no or less sense, strategic planning is an annual process, some times more or less. In general marketing plan consists of organization’s marketing strategies; it may be used on an individual product or all the products in the organization to cover many views like, Executive overview, which helps coca cola to learn about its grip as a soft drink, on the market when compared to its competitors. Coca cola, with the help of the results can evaluate its production quality, quantity, performance, and what else it has to do to achieve more. Market review, market is an ever changing entity, so keeping track of the trends of the market is very important for coca cola’s survival and growth and not all the markets are same. Coca cola uses market segments, to localize itself to various markets and learns about the markets and provides its products with respect to market requirements. It also helps to learn about new threats and opportunities in the market and finding new markets and new products. SWOT analysis is used to learn about coca cola’s strengths and weaknesses which are internal objects i.e. the factors that organization can control and deal with, and opportunities and threats that coca cola is going to face, which are external factors i.e. organization has no or limited control over them. Goals and objectives, which helps coca cola’s mission and vision and sales objectives, that deal with how many products should be developed and how to market them and how this sale is going to help the organization to grow and develop, and it also helps coca cola to develop marketing objectives to keep tract of sales and in its growth. Marketing plan also helps to develop strategies like coca cola’s positioning, its products, its pricing, its distribution strategies, communication strategies, action plan and implementation, and many more.

Task 7: Operational zing marketing strategy and marketing mix in coca cola

Marketing mix or 4P’s is made up of product, price, promotion, and place which helps to develop business marketing strategy. Marketing mix is connected to external and internal environment so it helps to full fill the coca cola’s marketing objectives and plans, keeping track of changes in internal and external markets or environments. Product: A product can be a physical good or service; coca cola’s main products are soft drinks. Four types of products are potential, augmented, tangible, and core products. Coca cola’s core product is wide range of soft drinks; it also offers services like phone service, complaint about dealer, takes feedback from the customers about the product, etc. which comes under augmented products. Price: Coca cola’s prising strategy takes care of both the demand of the product and competitive advantage i.e. price of the soft drink is not too high that a targeted customer cannot buy and competitors can produce similar products with less price or low price that can affect the organizations growth. Some pricing strategies, that organization follows are competition-based pricing, cost-plus pricing, limit pricing, market-oriented pricing, etc. Place: Coca cola has wholesalers, distributors in more than 200 countries. It produces the soft drink and delivers to wholesalers and distributors with licenses, and then they will follow the organization strategies for marketing and promoting the product. Coca cola is a global organization, but it projects as it is local by taking care of local needs and producing products to support local tastes and trends. Promotion: promotion can be divided as international promotion and local promotion, coca cola as a global organization has international promotion strategy and also has local promotion strategies to attract local people like using local film, pop stars to advertise the product. Positioning also plays a role to set the image of the product, which controls the minds and feelings of the customers, it also helps in competitive advantage.

Task 8 & 9: Supply chain and Delivery management, and Marketing plans in Coca cola

According to Harland (1996), “supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customer.” Supply chain management involves process like, gathering raw materials, storing raw materials, work process inventory, and finished goods from the point of origin to point of delivery. Delivery management is a broader scale of project management which includes organization, administration, human resource, business functions, tactical goals, etc, that are needed to achieve what client is looking or expecting from the organization. Coca cola produces soft drink using sugar, citrus, coffee, water, and other flavours, various products are brought from the various suppliers, and supply the product to bottling partners, who manufacture bottles, to package and they product goes to wholesale and local distributors. One more important thing is developing a proper business unit to take care of this supply chain, in 2004 coca cola combined three business units in North America to make one effective and efficient integrated unit. Coca cola company doesn’t has its own bottling company but it has 35% share in the largest bottling company, even though the company doesn’t have a controlling share in the bottlers it does work closely with the bottling organization to monitor and evaluate their situations. Developing a perfect strategy helps organization to keep track of distributors in more than 200 countries, some of the factors that influence supply chain and delivery are like, amount of the product with respect to distributor, marketing strategies in local markets, and many more which will be taken care by the local business units located in respective local areas.

Marketing plan of Coca cola

Coca cola, after carefully analysing the internal and external environments and the industry/market chooses most suitable strategies which can help the organization to grow. The organization appointed many administrators to administer execution of these strategies and monitor for any changes in the market, which can be opportunities or threats.

Situational analysis

Here coca cola carefully gathers information about its internal and external business environments, keep track of changes and trends in the market, what the organization originally wants to do and what are the new changes or strategies to follow to overcome any radical changes in the business environment. This information contains many other aspects, one important aspect is about competitors, keeping track of competitor’s growth and development and activities help coca cola to stay as number one soft drink company. SWOT analysis is a powerful tool which can analyse these factors for the organization.

Internal Business Environment

Internal business environment consists of factors which are under the control of the organization i.e. the organization can modify them; they are Strengths and Weaknesses of the organization. Some of Coca cola’s strengths include, coca cola has been in the market for long time, more than 100 years, and people are emotionally attached to it. Even though it is a global organization it projects as it is local using its business units, which takes care of local needs and demands. It has a very high brand name and spread throughout the world. Some of Coca cola’s weaknesses include, keeping prices low and maintaining effective productivity throughout the world is not easy, organization has to keep track of all the areas, and when it is more than 200 countries it is too difficult and distracting, as organization cannot concentrate on all the areas simultaneously. The soft drink has some adverse affects on health like gas problem and caffeine which is not suitable for teenagers. Some of Coca cola’s opportunities include, it is world’s leading soft drink manufacturer and brand name, its name is recognised anywhere in the world which gives it a serious competitive advantage. With this recognition it is not hard for the organization to launch any new product or enter into any new market. Some of Coca cola’s threats include new and local competitors and as its products are spread worldwide, many countries are not stable with respect to economy and politics, so any radical change in those countries can give adverse affects on the organization. Its competitor in the soft drink Pepsi also has a huge market and the competition between these companies is like forever, so slightest price change may result in losing the market share.

Task 10: Information technology on marketing in Coca cola

Coca cola uses SAP, world leading enterprise Software Corporation, which delivers variety of business solutions like FICO, which takes care of financial accounting, asset management, treasury, asset accounting, etc. HR, which takes care of human resource, employee management, payroll, workforce planning, etc. SAP Logical and Manufacturing, which takes care material management, sales and distribution, service management, etc,. SAP PLM, to take care of product life cycle management, quality planning, quality management, etc. Governance, risk, and compliance, etc. Technical components like ABAP, advanced business application programming, NetWeaver apps, to take care of business process management, knowledge management and collaboration, etc. SAP IS to take care of information system management like master data management, etc. Using this kind of extra-ordinary software Coca cola, was able to maintain it operations all over the world. As new technology growing more and more, marketing strategies changed a lot, these new technologies helped global organizations like Coca cola to expand themselves and grow more. With the help of SAP supply chain management, organization was able to develop itself and manage many products and many distributors simultaneously, which helped it to grow. Other software products which are designed to take care of specific departments of an organization helped organizations like Coca cola to expand itself more. Internet marketing of Coca cola helped it to grow, in early 20th century it was too costly to make advertisements and to present them in TV, but it changed with internet which decreased the prises of advertisement and helped organization to reach its customers more rapidly and more efficiently, technology helped Coca cola to make reviews and take feedbacks from its customers and helped it to analyse data from the customers and sales and delivery which helps organization to make stronger strategies which can take care of rapidly evolving and ever changing external environments.

Task 11: Portfolio model on Coca cola

BCG on Coca cola, Boston Consulting Group is four celled matrix tool to analyse corporate portfolio. It provides information for an organization to test different businesses in its portfolio on the basis of related market and industry growth rate, in other words it helps to analyse business potential and evaluation of market.

Star: Coca cola’s business units in many developing countries have a large market share, but the industry is growing fast and also has serious competition from other soft drink providers. Coca cola is making advertisements using local celebrities to increase their production which is somewhat costly, to maintain their lead.

Question Marks: Generally these business units have low relative market share and located in a fast growing market. Coca cola is all over the world, and some countries have less economical stability and under developed, the business units in those places have to gain more market share, however they may take large investment.

Cash Cows: these are business units which are matured and the industries they live in are slowly growing. In developed countries coca cola is so famous, everyone know about the soft drink, so it has less competitors to fear and has a strong grip on the market, these business units are matured and has a good profit rate.

Dogs: these business units have weak market share in low-growth markets; Coca cola units in those countries which are losing political stability, economical stability, and recession for prolonged years can lead to weak market growth as well as because of instability business units may lose their identity or market share. Normally in this case businesses liquidate these units or develop new strategies for them.

Task 12: Market segmentation in Coca cola

As no two markets in two different places are same, an organization needs different marketing strategies to follow up in different markets. Market segmentation is a process by which an organization learns about individual markets and answers some question like, what is purchasing power of the customers in the market, what are their interests, number of soft drinks in the market, number of teenagers and families in the market/society, with the help of which organization can produce relevant products which thus can increase organization’s growth.

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Coca cola has distribution centres in more than 200 countries, one of the main reasons to keep many distribution centres and local offices is to understand and act according to the local communities. One way to motivate locals is through advertising where coca cola uses local celebrities to endorse its products. Second, learning the market trends, when market started to move towards food products with less fat, coca cola launched coke zero with less than one calorie. Coca cola also introduced caffeine free coke, when health care institutions warned people about the adverse affects of caffeine. Many more products in different markets to suit the needs of the customers and to satisfy customers, coca cola uses market segmentation. Advantages with this process is, coca cola can stay on top of other soft drink companies and keep a close relation with local people, where people can get connect to the product, which increases the product’s and organization’s growth and value in the local market, which again helps organization to face new competitors.

Task 13: Market structure

Market structure is the order in which the market is organized; it mainly depends on number of sellers, who sell identical products or services, and buyers, competition between the sellers, and the behaviour and economical strength of buyers. There are four basic market structures namely Perfect competition, Oligopoly, Monopoly, and Monophony which deal with different ratios of buyers and sellers.

Undifferentiated markets: Even though Coca cola has many products, in the beginning it is mainly known for coke, a soft drink. Even coke comes in few flavours but flavoured coke wasn’t a successful product for Coca cola. Worldwide the core product coke has similar taste and people recognise the taste, which helped coca cola a lot in its growth. Here the organization has to concentrate on only one product, to produce, market, advertise, and distribute, so organization doesn’t need to concentrate differences within the markets and conceders whole market as single. It also helps organization to control the price of the product and maintaining products.

Differentiated markets: it is a strategy which helps organization to grow sales by producing different products with respect to different market segments. Coca cola developed a strategy to produce same product with different flavours, flavours with respect to markets and communities like, vanilla flavour, cherry flavour, etc, which ware not that successful as its base product coke. However the products like zero coke, caffeine free coke, were successful in some markets.

Monopoly Market: is a market where there is only one seller so, the seller has control over the product, supply and the price. Ideally this kind of markets doesn’t exist in the present world. Coca cola has one major competitor in the global market, Pepsi which has similar popularity and brand name as coke. It is also a global organization, spread through many countries challenging coke at every step.

Task 14: brand identity of Coca cola

There are many strategies for branding, coca cola uses individual brand strategy i.e. major products designed by Coca cola has their own brand names and images like Sprit, Fanta, Thums Up, etc. and all these products operate under the name, Coca cola. Brand identity is a process in which an organization develops its unique brand name or symbol to represent all its products, in other words it is a symbol or name with which customers identifies the organization producing the product. An organization’s value is directly proportional to its brand identity, i.e. how many people recognize the particular brand and how much emotionally and personally they are connected to that brand. For example Coca cola is in the market for more than 100 years, so generations lived through the development of this organization, and today many people are attached to this brand emotionally. This is a strong support for the organization, and this helps the organization to produce or experiment to produce new products and enter new markets. Even a new product, if comes under a brand name customers will buy the new product, not because they can identify the product but they identify the brand name. It also helps organization to reach its customers and understand what customers are looking from the organization. Coca cola mainly has a single product and is there for many years which helped its brand image to develop, with the help of globalization and rapid growth in technology, today coke can be found anywhere in the world, which is strengthening the brand name and identity. Few steps to follow to develop branding in general are, defining the brand, defining the brand’s objectives, focusing on targeted customers, identifying and removing brand barriers, and packaging and identity of the brand.

Task 15: Stages of Product Life Cycle and Strategies for PLC in Coca cola

PLC is group of stages or levels that a product goes through, mainly used by organization to measure life of product. PLC compares any product life with general living beings i.e. they take birth, grow, reach a maturity stage and then they die, same applies to products, products gets designed, they grow in market and reach a stage where they support organization to grow and then they die by losing its identity. PLC has 4 stages as follows

Introduction: In this stage, an organization introduces a new product in to the market, in this stage the profit organization is gaining from the new product would be less than what they have invested in the production of that product. Organizations use marketing techniques like advertisement and brand name to influence the product sales. New products help global organizations like Coca cola to face competitors in the local and global markets, it also helps them to increase customer relation in the product is targeted for particular market. Customers review plays a vital role in launching new products, for example coca cola launched vanilla flavoured coke as its new product, the organization learned from the feedback of customers it learned that the new product was not a success.

Growth: it is a stage where sales of the product increases in the market. In late 20th century coca cola in India increased rapidly, one main factor which increased the sales is through growing awareness about the product to people. One main strategy they followed is through movies, as coca cola realised the popularity of movies in India, they placed their products in movies, showing celebrities drinking and enjoying, which boosted its sales.

Maturity: is a stage, where products earn good profits and started helping its organization to grow. In 21st century Coca cola in India reached maturity level i.e. people are aware of this product throughout the country, people are recognizing the brand name and coke as a soft drink and other products by the organization. It today holds many customers mainly in summer it has many sales in the country.

Decline: is a stage where the product reaches a stage where organization has to stop producing the product. For example vanilla flavoured coke is the product released by Coca cola which didn’t gain the popularity from the people and failed to grow in the market, even though Coca cola used marketing strategies to improve the sales, customers didn’t like the product so, it has to stop producing the product, however the original product coke is still on top and Coca cola uses many strategies and advertisements to keep the product on top.

Some strategies used in product life cycle are, skimming price strategy in introduction stage, in growth stage many strategies are implement to grow the awareness of the product, maturity stage implements strategies to learn any new trends but lessens development of strategies on increasing awareness of the product. And in the final stage organizations implement strategies like cost-cutting, inventing new products or revitalizing the product.


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