Coca-Cola Company’s Operations Management Analysis

Executive Summary

Operational control at the Coca-Cola Company may be analyzed from various aspects, and such its areas as supply chain management, inventory, and quality management will be assessed. Based on the comparison of the corporation with McDonald’s, another brand of global importance, the effectiveness of the organization’s activities will be evaluated. As criteria for analysis, such aspects as volume, variety, variation, and visibility will be used. Based on the review of academic sources, the current Coca-Cola’s business will be assessed and described. Also, recommendations will be proposed regarding the possible ways of improving the operational performance of the corporation. In general, the activities of the company can be described as successful and productive.

Introduction

Management strategies employed by large corporations primarily determine the success of their work and help directors to control the activities of subordinates effectively. As a world-renowned organization where the right principles of leadership are an integral component of success, the Coca-Cola Company will be taken as a basis. The analysis of the approaches to the management of this corporation may help to assess the relevance of decisions taken to maintain a stable position in the market.

Moreover, comparing leadership principles in this company with another large organization’s approach can contribute to identifying strengths and weaknesses and determining specific areas for potentially beneficial intervention. The evaluation will be based on the principles of the supply chain, inventory, and quality management. The data obtained in the analysis process may be used to compile a comprehensive picture of the success of control strategies and factors influencing the maintenance of consumer interest.

Operation Management Decision Areas

Coca-Cola is one of the most recognizable brands in the world not without reason. The management policy of this corporation, as Anni (2017) notes, is aimed at monitoring compliance with the highest standards of product safety. A long time in the market has allowed corporation specialists to study the interests of consumers well enough and create a product that can satisfy the market needs. According to Karnani (2014), regimes and initiatives emanating from the representatives of this organization allow solving many challenges encountered in the process of promoting their products.

As a result of fruitful work, Coca-Cola’s management has been able to establish a sophisticated and, at the same time, a complex business system that is recognized around the world (Parmigiani & Rivera-Santos 2015). As Lee and Tang (2017) remark, constant concern about whether customers are satisfied with the quality of the company’s products makes Coca-Cola the corporation that fulfills its obligations responsibly. Based on the analysis of the specific principles of leadership, it is possible to assess the activity of the organization and its key areas of work.

Supply Chain Management

The supply chain management system of Coca-Cola is stable since the products of this brand can be found in almost any country. For instance, Linnander et al. (2017) give an example of Tanzania and argue that one of the strengths of the corporation is building partnerships. It is a rather successful initiative, and according to Bhardwaj (2016, p. 456), large firms strive for different ways of maintaining business stability, “including sustainable supplier co-operation.”

As Ghosh and Janat (2015) note, Coca-Cola’s case demonstrates how vendors and focal firms can collaborate successfully. Such an approach to work allows the management to maintain the interest of investors and partners and also encourages customers to acquire the company’s products, delivering goods to all the parts of the world. As Hasan (2013) remarks, the practice of such a large company as Coca-Cola is an example of the productive work of managers who are responsible for logistics. Consequently, the supply chain control system is good and advanced in Coca-Cola.

Inventory Management

The process of introducing relevant products to the market is the feature that characterizes the company in question. According to Andini and Simatupang (2014, p. 67), “in inventory planning and control, an integrated and aligned process that involves related organizational divisions is needed”. The use of current innovations, for example, specific updated packaging for beverages, allows attracting consumers’ attention. As Pan et al. (2018) note, to maintain constant activity in the market and meet the requirements of customers, it is required to establish the correct replacement mechanisms work.

In the case of Coca-Cola, enough attention is paid to both product design and other essential aspects, for example, advertising campaigns that are developed regularly. The corporation has come to work in such a way that it can provide consumers with their favorite non-alcoholic beverages for twelve months a year (Mazzei & Noble 2017). As Van Alstyne and Parker (2017) argue, the world’s largest companies adhere to the classical principle of organizing the process of introducing innovations, focusing exclusively on mass production within their own business. This principle allows Coca-Cola not to be distracted by unnecessary goals and focus on internal objectives.

Quality Management

One of the successful strategies that allow Coca-Cola’s executives to carry out efficient and quality work is customer connectivity (Gehani 2016). Another essential aspect is the “assurance of product quality” in accordance with mobyards (Kohli, Suri & Kapoor 2015, p. 39). In case consumers are confident in the product they purchase, it increases the chances of any company to earn trust and, thereby, ensure a stable demand for t goods provided.

The activities of Coca-Cola for over a century allow speaking of buyers’ complete confidence in the products that the corporation produces. The industry of soft drinks production cannot be irrelevant, and the company in question has occupied a stable niche in this field. (Provasnek, Schmid & Steiner 2018). According to Sheth (2017, p. 9), “performance value is created by quality”, and much attention is to be paid to this criterion. Therefore, Coca-Cola’s policy about the class of manufactured products may be described as successful.

Coca-Cola vs. McDonald’s: Operations Management Approaches

As the assessment of the Coca-Cola Company, another large corporation, McDonald’s, maybe analyzed, and the table with results is given in Appendix A. Some conclusions can be made based on 4 Vs – volume, variety, variation, and visibility. According to Nadolny and Ryan (2015), like Coca-Cola, McDonald’s annually recruits a large staff, which indicates a large volume of production. Raghavendra and Nijaguna (2015) offer a fast-food brand to increase the variety of products. Excessive variability is a negative feature that is observed in McDonald’s but is absent in Coca-Cola (Weiss & Tucker 2018). Finally, the fast-food brand is recognizable, and its visibility is high like that of Coca-Cola (Uggla 2014). Thus, McDonald’s is inferior to certain characteristics of the organization in question.

Ways to Improve Operational Performance Within the Coca-Cola Company

Despite the success of the Coca-Cola Corporation in its field, some aspects of work may be improved to achieve higher rates of operational performance. In particular, the emphasis on product personalization can be made to attract additional consumer attention and increase sales growth. According to Chavez et al. (2016, p. 210), specific “customer-centric” models of work may allow achieving better productivity.

Coca-Cola is known as the brand positioning itself as the producer of drinks for the whole family. Nevertheless, one of the ways to increase sales growth may be an attempt to create new product samples while taking into account the interests of different categories of the population. In case buyers see that the company seeks to satisfy all consumers without exception, it will provide the organization with more reliable support from the target market and will have a positive impact on the outcomes of the corporation’s activities.

Another aspect of work that can be the basis for increasing operational performance is employee commitment. In particular, stimulating the activity of subordinates and motivating personnel to achieve good production results may be the target intervention processes. According to Griffin and Mechanic (2014, p. 33) who review the Coca-Cola corporation in Nigeria, “there is a fairly high relationship between employee commitment and organizational performance”. Moreover, as Cheptegei and Yabs (2016) remark, such an initiative will allow managing existing resources better due to the stable work of staff regarding brand promotion.

In case the employees of the corporation see that their work is valued adequately, they will have enough desire to help the company as much as possible. It can be achieved by introducing additional bonuses for productive workers or through material incentives for high activity. Such a measure may have a corresponding effect and may allow the management of the corporation to promote the organization’s products in the market successfully and with even greater profit.

Conclusion

The analysis conducted is a rather effective mechanism for evaluating the performance of Coca-Cola and the management approaches followed by the leadership of the corporation. The organization’s productivity is high, and compared to McDonald’s, another world-famous brand, Coca-Cola’s success is more obvious. However, the operational performance of the company may be enhanced through specific approaches, for instance, product personalization and additional employee motivation. Following modern business management standards allows the corporation to be one of the world leaders.

Reference List

Andini, RA & Simatupang, TM 2014, ‘A process simulation of inventory planning and control for Minute Maid Pulpy at Coca-Cola’, International Journal of Logistics Systems and Management, vol. 17, no. 1, pp. 66-82.

Anni, G 2017, Operations at Coca Cola. Web.

Bhardwaj, BR 2016, ‘Role of green policy on sustainable supply chain management: a model for implementing corporate social responsibility (CSR)’, Benchmarking: An International Journal, vol. 23, no. 2, pp. 456-468.

Chavez, R, Yu, W, Feng, M & Wiengarten, F 2016, ‘The effect of customer-centric green supply chain management on operational performance and customer satisfaction’, Business Strategy and the Environment, vol. 25, no. 3, pp. 205-220.

Cheptegei, DK & Yabs, J 2016, ‘Foreign market entry strategies used by multinational corporations in Kenya: a case of Coca Cola Kenya Ltd’, European Journal of Business and Strategic Management, vol. 1, no. 2, pp. 71-85.

Gehani, RR 2016, ‘Corporate brand value shifting from identity to innovation capability: from Coca-Cola to Apple’, Journal of Technology Management & Innovation, vol. 11, no. 3, pp. 11-20.

Ghosh, D & Janat, S 2015, ‘Supply chain analysis under green sensitive consumer demand and cost sharing contract’, International Journal of Production Economics, vol. 164, pp. 319-329.

Hasan, M 2013, ‘Sustainable supply chain management practices and operational performance’, American Journal of Industrial and Business Management, vol. 3, no. 1, pp. 42-48.

Irefin, P & Mechanic, MA 2014, ‘Effect of employee commitment on organizational performance in Coca Cola Nigeria Limited Maiduguri, Borno state’, Journal of Humanities and Social Science, vol. 19, no. 3, pp. 33-41.

Karnani, A 2014, ‘Corporate social responsibility does not avert the tragedy of the commons. Case study: Coca-Cola India’, Economics, Management and Financial Markets, vol. 9, no. 3, pp. 11-23.

Kohli, C, Suri, R & Kapoor, A 2015, ‘Will social media kill branding?’, Business Horizons, vol. 58, no. 1, pp. 35-44.

Lee, HL & Tang, CS 2017, ‘Socially and environmentally responsible value chain innovations: new operations management research opportunities’, Management Science, vol. 64, no. 3, pp. 983-996.

Linnander, E, Yuan, CT, Ahmed, S, Cherlin, E, Talbert-Slagle, K & Curry, LA 2017, ‘Process evaluation of knowledge transfer across industries: leveraging Coca-Cola’s supply chain expertise for medicine availability in Tanzania’, PloS One, vol. 12, no. 11, pp. e0186832.

Mazzei, MJ & Noble, D 2017, ‘Big data dreams: a framework for corporate strategy’, Business Horizons, vol. 60, no. 3, pp. 405-414.

Nadolny, A & Ryan, S 2015, ‘McUniversities revisited: a comparison of university and McDonald’s casual employee experiences in Australia’, Studies in Higher Education, vol. 40, no. 1, pp. 142-157.

Pan, QH, He, X, Skouri, K, Chen, SC & Teng, JT 2018, ‘An inventory replenishment system with two inventory-based substitutable products’, International Journal of Production Economics, vol. 204, pp. 135-147.

Parmigiani, A & Rivera-Santos, M 2015, ‘Sourcing for the base of the pyramid: constructing supply chains to address voids in subsistence markets’, Journal of Operations Management, vol. 33, pp. 60-70.

Provasnek, AK, Schmid, E & Steiner, G 2018, ‘Stakeholder engagement: keeping business legitimate in Austria’s natural mineral water bottling industry’, Journal of Business Ethics, vol. 150, no. 2, pp. 467-484.

Raghavendra, AN & Nijaguna, G 2015, ‘Supply chain management in hospitality industry: impact on service quality in Mcdonald’s restaurants, Bangalore’, Global Journal of Commerce and Management Perspective, vol. 4, no. 2, pp. 22-29.

Sheth, J 2017, ‘Revitalizing relationship marketing’, Journal of Services Marketing, vol. 31, no. 1, pp. 6-10.

Uggla, H 2014, ‘Make or buy the brand: strategic direction of brand management’, Strategic Direction, vol. 30, no. 3, pp. 1-3.

Van Alstyne, M & Parker, G 2017, ‘Platform business: from resources to relationships’, GfK Marketing Intelligence Review, vol. 9, no. 1, 24-29.

Weiss, EN & Tucker, C 2018, ‘Queue management: elimination, expectation, and enhancement’, Business Horizons, vol. 61, no. 5, pp. 671-678.

Appendix A

Table 1: Comparison and Contrast of Coca-Cola and McDonald’s with 4 Vs.

Company Criterion Coca-Cola McDonald’s
Volume Large production centers around the world Worldwide sales and service points
Variety Narrowly focused production (carbonated soft drinks) Foodstuffs of the same profile (fast food)
Variation Many variations and individual brands Not a wide range of products
Visibility Around the World Around the World