Business Case Study: Management at Coca-Cola

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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

This lesson examines and analyzes how the management process and strategy at Coca-Cola have developed. We look at the current organizational structure and learn how it developed from a unique combination of organizational structures and management models.

Coca-Cola (Coke) Grows a Global Brand

'I'd like to buy the world a Coke.' 'Red, white, and you!' 'Coke is it!' 'Share a coke.' 'Happiness delivered.' 'Always real.' Any of these ring a bell? When we hear these slogans, we think of a tall, cold, refreshing beverage. It seems like Coke has been a part of our lives forever. Well, the company is banking on its roadmap for growth to help it remain a staple in our lives.

This roadmap is part of the company's strategic plan, which is called 2020 Vision. It gives us insight into how Coke is adapting its management model to grow its brand. With a desire to squelch new international competition, the company is leaving its core products untouched. This is the Coke, Sprite, Fanta, Minute Maid, or Dasani we can't live without. Now, the company wants to unleash new growth potential by changing its management process, not its products. Let's look at how Coke got here.

Beginning in 1886, Coke started as a syrup concentrate company. Now, the company has grown into a global industry that has a long history of making a wide range of products, including its most famous of soft drinks. Many older products are now even collector's items. With 20 billion dollars' worth of brands and over 700,000 system employees, Coke is the world's largest beverage company. Since its inception, the company's management process looked very much the same until the eighties. Let's look at Coke's strategy.

Organizational Structure Before the 1980s

Up until the 1980s, Coke had virtually the same centralized organizational structure where the main divisions like manufacturing, marketing, and finance, along with corporate staff, made the important decisions. All strategic decisions were made in these departments. In the '80s this changed to where the company started focusing on key geographical strongholds so that it could expand in those regions. The monumental task of implementing the company's management strategy and making day-to-day decisions fell to each division in a separate territory.

Coke developed divisions in Eurasia and Africa, Europe, Latin America, the Pacific, and North America. This helped local managers be more flexible in meeting the demands of their regional markets. This is still important to Coke because it wants to integrate local customs and values as much as possible. The belief was that if the company connects to its customers on a local level, it will increase its international market share. Corporate decision-makers concentrated on the company's long-term strategic goals while regional markets and local subdivisions focused on making quick decisions. Much of this still remains for divisions outside of North America.

As recently as 2014, Coke made management and organizational changes to refocus its managers on lowering costs and increasing efficiency. In the face of this development, Coke had two goals that remained: 1) Grow globally, and 2) provide a quality product. Let's examine and analyze Coke's new management process and strategy.

Current Management Process and Strategy

Coke has modernized its overall vision. Its mission is to 'inspire moments of optimism and happiness, while creating value for shareowners and making a difference across the globe.' To support this, the company undertook an initiative to change its management process and flatten its North American branch, which is where the company is forecasting the most growth potential. The company also wanted to centralize its bottling operations under this division.

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