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PRISCA BANGO
BBA - F1308 - 0322
BBA PGSM
Operation Management
Dr. Roger
Coca Cola Global Operational Strategy
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Table of Content
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Question 1:
Evaluate two aspects of operations management that Coca-Cola selected to
implement its global strategy.

Question 2:
The company engages its bottling business associates to manufacture the products across the
globe. Describe two strategic reasons for it to do so.

INTRODUCTION
Operations at Coca-Cola involve the management of the organizations resources; production
system; deal with the design and management of products, processes, services and supply
chains. It considers the acquisition, development, and utilization of resources to deliver the
goods and services to the consumers. The companys management ranges at strategic,
tactical, and at operational levels. Strategic issues include determining the size two and
location

of

manufacturing

plants;

deciding

on

the

structure

of

service

and

telecommunications networks; and the design of the technological supply chains. Tactical
issues include plant layout and structure; project management methods; and equipment
selection and replacement. However, there are reasons for Coca Cola continuous monitoring
and control of all there line of production.
This report will highlight some of the strategy behind Coca Cola mode of operation,
implementation of their global strategy and why it engages companies around the world in
bottling will be vividly discussed in the paragraphs below.

QUESTION 1
One of the various aspects of operations management that Coca-Cola
selected to implement its global strategy is the continuous refining of the
requirements to insure that the bottlers conform to the most recent and
stringent manufacturing processes.
Coca-Cola believes in producing product to the highest standards by using
processes that ensure consistent product quality and safety for the
consumers. It constantly monitor and test their products to make sure that
are of the best quality and will meet consumers expectations. Consistency
and reliability is crucial to coca-cola business because they all want to
give the same great experience with every Coca-Cola product consumed.
However, to ensure such consistency and reliability, the Coca-Cola
system, is governed by The Coca-Cola Management System (TCCMS), they
are also know the Quality Control team. TCCMS is the integrated quality
management program, which holds all of Coca-Cola's operations system
wide to the same standards for production and distribution of all CocaCola beverages. It guarantees the highest standards in the management
of product quality, the environment, and health and safety throughout the
Coca-Cola

system.

TCCMS

has

endorsement

from

all

leadership

throughout the Coca-Cola system. It guides all the product safety and
quality by integrating and aligning business and quality objectives with
consistent metrics to monitor performance; integrating preventive action
as a management tool, including more rigorous demands when planning
new product and service introductions; incorporating Hazard Analysis and
Critical Control Points (HACCP) into their system standards; and defining
problem-solving tactic and tools to drive continuous product safety and
quality improvements.
To stay current with new regulations, industry best practices and
marketplace conditions, Coca -Cola consistently reassess the relevance of
all their product safety and quality guidelines in The Coca-Cola
Management System (TCCMS). Given the increased awareness of the
importance of food safety, not only in manufacturing but also throughout

the entire supply chain, the company is refining its requirements to further
ensure

that

TCCMS

embodies

the

most

recent

and

stringent

manufacturing processes. In accordance with TCCMS. This strategy is been

effective since Coca-Cola was established and still maintains a safety and
quality system. Also, the company encourage a work environment of open
communication and to effectively solicit and leverage innovative ideas,
engaging in frequent dialogue with associates around the world. Such
dialogue provides valuable information, increases awareness, promotes
business strategies, shares successes and opportunities, and solicits
employee opinions. For example, global associates and bottling partners
have contributed ideas to major initiatives, such as our 2008 Beijing
Summer Olympic Games activation. And, employee input was a key
ingredient to our Company's Mission, Vision & Values.
Another global strategy implemented by Coca-Cola company is the
division of its management structure into five geographical group. The
Coca Cola company realizes that it needs to be able to meet the ever
changing demands of its customers. This is why the company pushed
towards decentralization in the nineties and even more so in 2013.
The organisation has three operating groups called Coca-Cola Americas,
Coca-Cola International and Bottling Investments Group which is part of
the continuous exercise. there are also operating groups divided by
different regions such as Africa, Eurasia, European Union, Latin America,
North America and Pacific. Each of these divisions is again divided into
geographic regions. By allowing decisions to be made on a more local
level, the organisation can quickly respond to changing market demands,
and higher level management can focus more on long term planning.
Certain division of the company such as finance, human resources,
innovation, marketing and strategy and planning are centrally located
within the corporate division of the company. Some of these functions
takes place at lower level in each of the regions of the company, however
most decisions are made at the top of the hierarchy

Face-to-face meetings were held regularly at the local levels so

employees could remain informed. Besides the use of teams and
meetings, the intranet was refurbished to provide a source of real-time
sharing of information. The use of complex integrating mechanisms is
important in such a tall and wide organization. It is important that each
function of the country is able to share up to date information quickly with
each other. The organisation seems to be doing an excellent job of
balancing standardization and mutual adjustment.
This balance is essential because it allows Coca Cola employees some
flexibility but also the

organisation some predictability. The company

structure is a hybrid of both mechanistic and organic models. The focal

point of the Coca Cola company is on responsiveness. The complex
integrating mechanism previously discussed are characteristic of an
organic structure. The surveys and interview used by the company
allowed information to flow from the bottom up and the intranet allows for
information to be exchanged laterally. It also caused the Coca Cola
company to pursue simplification and standardization. Centralization and
high standardization are associated with a mechanistic structure.
Corporate Social Responsibility (CSR) is another strategy Coca Cola is
using to implement its global strategy. The Coca-Cola Company and the
U.K. Government of International Development (DFID) today announced a
partnership to help young women living in Nigeria by providing them with
the access to education and business skills that will help them succeed.
Together, The Coca-Cola Company and DFID will invest more than 7
million to provide opportunities for these Nigerian young women. They are
working in partnership with implementing partner Mercy Corps to launch
the Educating Nigerian Girls in New Enterprises (ENGINE) program.
ENGINE will empower more than 10,000 young women by providing them
with training programs designed to build their financial, entrepreneurial
and leadership skills. Upon completion, each woman has the opportunity
to choose from a number of businesses and employment opportunities,

including assistance in starting their own businesses as micro retailers of

Coca-Cola products.
Coca-Cola, believe that the company is as strong and sustainable as the
communities in which we operate, and that investing in womens
education and careers spurs economic growth and fosters sustainable
development. This partnership demonstrates Coca-Colas belief that many
of the worlds most pressing challenges can best be addressed by
governments, business and civil society working together as partners to
create lasting, sustainable solutions.
The Coca-Cola Company is contributing to the program through 5 by 20,
its global commitment to enable the economic empowerment of five
million women entrepreneurs across the Companys value chain by 2020.
Launched in four markets in 2010, 5by20 now has programs in more than
20 countries. By the end of 2012, approximately 300,000 women from
around the world were impacted in total through the initiative.
NUMBER 2
The company engages its bottling business associates to manufacture
the products across the globe. Describe two strategic reasons for it to
do so.
Coca cola strategic reason for engaging its bottling business associates to
manufacture the products across the globe is because of its large pool of
employees and capital required to set up on each country. According to Forbes in
2013, Coca Cola has about 130,600 employees around the globe with about 250
manufacturing plants or bottlers. The more than 250 bottlers provide the
required capital for investments in land, buildings, machinery, equipment, trucks,
bottles and packaging. Coca-Cola may not be in a position to invest, manage and
control on these facilities if they were to do all these by themselves. Coca cola
decentralize its organisational design into continents and to the national levels
for easy management and supervision of employee performance and to
understand consumers need and concerns. Apart from the capital intensive
nature of the business, Coca Cola want to glocal their strategy by using things
peculiar to each environment for example, using celebrities from the region as

the product ambassador. However, there are some countries policies that is
against Foreign Direct Invest which may force Coca Cola to go into Joint ventures
with local investors. Furthermore, employees from each region are managed and
rewarded the codes of conduct of their jurisdiction. Despite all this, the company
always instil their product standard and quality on every of its manufacturing
plants. Coca Cola strategy of bottling in different part of the world could also be
because of the cost involved in exporting to the location.

Another vivid strategic reason behind Coca Cola engaging its business
associates to manufacture the product across the globe is to focus on the
software which includes the production system that will ensure highest
quality and consistency standards will be maintained by bottlers.
Growth through acquisition has factored heavily in the more than 100
years of Coca-Cola Bottling Company, and the company was suffering
from little or no business process standardization. The Coca-Cola Bottling
Company integrate SAP software into their operations to ease the path to
future standardization. With SAP in day-to-day operation, information now
only has to be entered once in one place and it becomes available
everywhere and business analytical report can be find in one place and
everything needed. On the manufacturing side, by improving the
production scheduling and forecasting, inventory levels drop considerably,
which in turn reduced the need for working capital. This alone has helped
offset the cost of the solution.
Coca Cola only allocate the physical facilities to the bottling associates
and offer them Product manufacturing assistance, quality control, plant
and equipment design, marketing and personnel training are some of the
areas in which the company shares its expertise to its business associates.
The company engage in providing intellectual property ideas because it is
more concerned with standardization and uniformity of the all its products
around the globe.
However, the huge investment and commitment of the bottlers to achieve
their business growths helps to meet Coca-Colas global strategic goals in
terms of worldwide production, supply chain, sales and marketing.

The

Coca-Cola System, the system business model delivers value to the

company and to its bottling partners. By working together, the system

focuses on growing the overall profits from the beverage category in order
to provide strong returns. To achieve a safe working environment, the
company implements a rigorous set of controls to manage the operational
risks in the infrastructures, and manufacturing processes. The company
also sets up an internal audit process in ensuring the effective
implementation of the operational controls and management routines. The
use of the internal audit control is to monitor production activities and
employees performance at all time, so as to determine if routine are still
carried out as it was laid in the modus operandi of the company. This
method keeps employees and bottlers on their top performance all the
time to avoid breach in agreement.

However, the company only

recognized external audit firms to assess the compliance status of the

manufacturing operation with applicable laws and regulations; company
occupational safety standards; health regulations; and loss-prevention
policy.

CONCLUSION
The Coca-Cola Company has been a dynamic company, always moving to
anticipate and meet the present and future desires of customers and
consumers. The world is changing with blinding speed in countless ways:
technologically, educationally, culturally and economically. Coca-Cola
Company has been able to meet these changes seeing them as new
opportunities. They have taken a global approach to different countries
trying to reach as wide market as it could, giving them quite standardized
products, which are produced locally. With the changes taking place in the
global market, companies must try to remain as close to the customers
and consumers as it can in order to meet their different desires in the best
way. Due to that the Coca-Cola Company has also changed its strategy
from global marketing and local manufacturing to local marketing and
local manufacturing. This will help the company to differentiate its
products in more specific way, which will result in meeting the different
needs and desires of consumers and the market situation in a particular
country as well.

REFERENCES
Financial Times "Coca-Cola has tended to keep its bottlers at arms length" (Accessed 30th
June, 2014),
Coca-Cola Enterprises homepage "The World's Largest Bottler" (Accessed 30th June, 2014),
Coca-Cola Hellenic - geographic footprint Interactive Map. (Accessed 30th June, 2014),
David T., (2010). Professor of Marketing Strategy at the Haas School of Business at the
University of California at Berkeley