The Coca-Cola Company’s Management Information Systems

Introduction

Background

The Coca Cola Company is one of the world’s largest and leading manufacturers, marketers, and retailers of syrups and nonalcoholic drinks and beverages (Pendergrast 22). It was established in Atlanta in 1886 (Dransfield 11). Currently, the company is listed on the New York Stock Exchange. It is part of the S&P 500 index, DJIA, and the Russell 1000 Index.

Coca Cola’s average annual revenue is more than $47 billion. In 2012, the company achieved a net profit before tax of $11.809 billion before dropping slightly to $11.477 billion in 2013 (The Coca Cola Company 13).

Company operations

Products and services

The Coca-Cola Company mainly deals with beverage and syrup products of different brands such as Coke, Fanta, Sprite, Zero, and Diet Coke.

Markets

The Coca-Cola Company sells its products in more than 200 nations spread all over the world (Dransfield 12). The expansion and entry into new markets are mainly through the franchise, where local and regional bottling companies are given licenses to receive Coca-Cola products in syrup form and add water and other ingredients before bottling them for distribution (The Coca Cola Company 9). These companies have the right to identify their own distributors and outlets or sell the products to independent distributors and retailers within the areas they cover. Currently, the company has more than 1.9 billion trademarks owned through licensing and wholly owned. It targets all the segments of a given market based on the product on sale.

Major competitors

Among the major competitors, Pepsi is Coca Cola’s main rival in the world beverage and soft drink industry. In addition, Dr Pepper Sneapple Group Nestle, Kraft Foods, Cadbury Schweppes, and Groupe Danone are also important competitors in the world market (Dransfield 12).

Coca Cola’s Organization and Management of Information Systems

Type of information systems used to conduct and organize business

Coca Cola uses information and information flow as an important aspect of its business management. The company has made huge investments in IT in order to fulfill its mission and achieve the vision. Software systems are the most important types of information systems that Coca Colas have been used to make fast and effective decisions, improve the quality of its products, and reduce the cost of operation. In its headquarters, Coca Cola has a SAP application that includes budgeting, accounting, procurement, planning, and employee service (The Coca Cola Company 6).

Major business processes

The company manages the large number of manufacturing plants using the Projects System. This is a variant of IS used to implement and drive a number of corporate function at the management level such as planning of production, management of materials, managing inventories and monitoring the sales and distribution systems. Currently, the IBM’s server RS600 is applied at Coca Cola where it serves more than 1,000 users at the same time (Jordan 1).

How the company can use IS to transform/enhance its business

Achieving a competitive advantage is the most important application of IS. Coca Cola has a competitive advantage over its rivals because it has an access to some special resources that the rivals lack, including its ability to use common formulae and product line to meet the needs of a global market.

Ethical/social issue in using IS in corporate business management

Privacy is the most important ethical issues facing IT professionals and organizational leaders in corporations. For example, reading private e-mails of the network users, especially employees, is a contentious issue. Corporate managers can read the e-mails to ensure that the corporate rules are not violated.

The potential dilemma is whether it is ethically right to disclose such information or use it against the employees involved.

Company IT Environment

One of the major problems associated with information technology is the threat of attacks, considering that the information system is an application of the internet technology that is highly prone to cyber threats. By upgrading the systems from time to time, a company is able to keep its information asset secure from the possible attacks, which secures that the competitive advantage attained through the system is secure, effective and reliable.

Nevertheless, the frequent upgrading the company’s IS exposes the infrastructure and data to errors and system failures. This may interfere with the business system, making the customers and other external parties look for alternative services or products from other companies.

Suggested strategies for improving a firm’s management of business using IS

Expertise is an important aspect of any information system because knowledgeable, efficient and innovative individuals are likely to ensure that the IS remains active, effective and reliable (Roche 38). Secondly, they are likely to solve problems associated with upgrading, external attacks and other technical issues that may affect the system.

How the internet has affected the business of the company

Coca Cola’s method of managing business has improved because the large organization is managed from a common location in Atlanta, which removes the need for managers to travel to other regions and countries in order to oversee the operation processes (Ives and Jarvenpaa 34). Therefore, the internet technology has created an opportunity for improving the business environment by making it possible to open several branches in various parts of the world.

Coca Cola’s ability to secure and protect customer information and privacy

The company uses the latest IT and a dedicated, knowledgeable and innovative IT experts, which makes it to achieve this objective.

Application of IS to manage the company’s business

Coca cola’s business chain is not highly diversified because it works with a large number of partners, especially bottlers and distributors located in various parts of the world. However, an effective IT system has allowed the company to centralize its managerial work. The centralized business chain is based on a strategy that allows the company to operate outlets under common processes, practices and capabilities regardless of the location of each outlet. The company states that it stores and delivers the products to more than 10 million retail outlets located in various parts of the world. The supply chain ensures that customers get the products in their locations, which makes the company appear as a local supplier to the customers (Jordan 1). Bottling is done locally, which ensures an effective response to the needs of the customers, despite the fact that the company is a global corporation. Therefore, Coca Cola has a customer-driven supply chain with the same formulae and strategy because the concentrates are derived from a few places around the world, but the products are sold in almost all parts of the world.

Coca Cola’s modern business system is inclined towards the e-commerce business system. For example, it uses the internet-based communication to engage its customers. It has an effective website that allows people to register and raise issues or offer some suggestions based on their perceptions of the company’s products and services. The company uses the platform to outsource information from the market and the industry in general. In e-commerce, the information is useful in critical decision-making procedures and improvement of the company’s competitive advantage (Gupta and Govindarajan 64).

In this case, the Coca Cola Company engages its customers, suppliers and other parties in an effective communication using the internet technologies, which are supported by the IBM servers.

Conclusion

This analysis reveals that the Coca Cola Company is a good example of large multinational corporations that have used IT to enhance their business, achieve a competitive advantage and centralize their diverse managerial work. The Coca Cola is one of the largest corporations in the modern world (Jordan 1). This means that it must strive to meet the diverse needs if the customers in different regions using the same formulae and product line. In addition, it means that the company must employ strong strategies for developing effective market and supply chains in order to ensure that customers obtain products from their local retail centers.

Moreover, the large organization needs an effective way of dealing with employees, customers, products, suppliers and retailers. Evidently, information and information flow are some of the most critical needs of the company’s management. The management must use and maintain an effective communication method because they have to manage more than 10 million supply centers and work with thousands of partners such as bottlers and employees located in various parts of the world (Pendergrast 156). Therefore, an effective information system is required to carry out these functions. It must provide an effective way of operating a large organization from a centralized location, where the managers need to have some updated information about the operations of all the outlets, bottling centers and employees of the company.

Works Cited

Dransfield, Robert. Corporate Strategy. Washington, DC: Heinemann, 2012. Print.

Gupta, Anil and Vijay Govindarajan. “Knowledge flows within multinational corporations.” Strategic management journal 21.4 (2010): 473-496. Print.

Ives, Blake and Sirkka Jarvenpaa. “Applications of global information technology: key issues for management.” Mis Quarterly 3.2 (2001): 33-49. Print

Jordan, Ben. From farm to the table: Sustainability in our supply chain. 2013. Web.

Pendergrast, Mark. For God, Country, and Coca-Cola: The definitive history of the great american soft drink and the company that makes it. New York: Basic Books, 2013. Print

Roche, Edward. Managing Information Technology in Multinational Corporations. New York: Barraclough, 2011. Print.

The Coca Cola Company. Company Annual 2013 Annual Report on Form 10-K. 2013. Web.