Organizational Strategy - Case Study Example

Organizational Strategy Introduction Many organizations today are affected by the current economic recession in one way or another. The recent economic downturn has had impacts on many organizations' human resource management; on both service and production. Human resources are significant elements of the organizational strategy, and that success of a business depends widely on the type of management and the nature of the organization strategy. The Coca Cola Company has been one of the organizations that have managed to have sustainable business, even in uncertain climate that threatens the stability of the company. It has been affected by the economic recession that is experienced world wide just like any other company. This paper will discuss how the economic recession has affected the strategic management of the organization, and how it has survived the economic pressures that could otherwise downturn the business (Bateson 2005, p. 98). Content Coca-cola Company is one of the most successful companies that have laid down some fundamental strategies in order to promote its growth and sustainability. It is the leading manufacturer, marketer and distributor of non-alcoholic beverage in the world. The company believes that consumers are the life of their business. It operates in more than two hundred countries, including Britain with four hundred brands. These brands include water, juice drinks, coffees, teas, sports drinks, energy drinks, diet beverage and many others. They connect to future consumer by providing high quality products. Their employees are skilled and the materials they use are of high quality (www.cocacola.com). Economic recession has had impact on the human resource management strategy of the Company's organization. It has led to higher unemployment, inflation, as well as the cost of living expenses. On the consumer side, economic recession has led to lower disposable income and lower purchasing power. The weakened economy has negatively affected the bottling companies; hence threaten the stability of the company due to the dependent relationship. Moreover, it has led to increased activity at the lower ends of Coca Cola product price in Britain (Bateson 2005, p. 102). The rate of interests has raised the depressing business, hence causing lower spending levels and redundancies. The 2008 economic analysis for Coca Cola Company shows that the economy was strong and nearly every part of it was growing and doing well. The economic crisis which was suggested by several important indicators of economic downturn in Britain include high oil prices, which led to high food prices, as well as using ethanol and biodiesel as an alternative to petroleum (www.cocacola.com). The company has tried to fight the economic pressures; it has significant opportunities that develop and encourage more sustainable practices to benefit their customers, suppliers and consumers throughout the supply chain. The company's system is among the world's leading purchasers of sugar, coffee and citrus; for this reason, its organizational strategy is not affected by the economic recession because agriculture has a large environmental and social footprint in the world (Bateson 2005, p. 112). As the population increases, the sector of agriculture will need to produce more food, both stressing supply, hence increasing the footprint. Agriculture products are ingredients in many of their beverages, thus the sustainability of the company depends on the agriculture supply chain. For this reason, their bottling partners and the procurement teams are working together to incorporate sustainability criteria into the long term purchasing plans. Coca-Cola Company has worked hard to generate high pricing growth and acquire operating expenses and effectiveness in their strategic plans. This has enabled them stabilize their business for proper managing of their targets. The company has continued to plan for useful marketing strategies and approaches that would enable overcome consumer and market trends that impact the business, including health concerns, growth of deep retail discount and weak retail trends in most markets. The company has come up with new marketing approaches that deal with the hard discounters, brand innovation plan, organization initiatives as well as country specific brand. This has strengthened the ability and efficiency to serve valued and loyal worldwide consumers (Bateson 2005, p. 132). Moreover, it has collaborated with other bottling organizations to venture into many countries with maximizing value through affordable price and volume approach. In order to develop its human resource management strategies, the company has integrated its operations into a single unit. This has been done through management approaches that enable the company to realize the business objectives and promote quality customer relationship. The marketing strategies are essential to fulfil the vision in the future and to fulfil the need for a complete drink taste in all the countries (www.cocacola.com). They have successfully communicated to the market status for the required development of the company in many countries since the company has produced excellent operating revenues as it continue to outpace the cola soft-drinks. Its top management has promoted increase in sales and market shares with strong business presentation (Bateson 2005, p.56-59). Economic recession has motivated the Coca Cola Company; the company has come up with good marketing strategies and planning that would enable it to face the economic challenges, hence giving the best to the business in its totality. Quality management would ensure that the company is well-positioned hence meet the customers' needs and continue to experience strong growth through new goods and stretched distribution. Coca- cola has highlighted their operating sector to work with other partners like bottling partners in order to accomplish the price strategies that would reinforce their financial results, provide customers with choices that would satisfy their needs and deliver value for the consumers. The coca- cola company can integrate the possible required steps for the development of effective strategies that is responsive to the needs of the customers worldwide. Their perfect structure reflects the way product choices are made and unifies the company's procurement and supply procession systems to increase effectiveness, get rid of redundancies and link the company's activities with those of their business partners (Bateson 2005, p. 86). The Coca-Cola Company is on a bold journey, inspired by the recent economic recession. They have set goals that would enable them fulfil their desires: they will revive growth for their company and will inspire people especially their customers and employees. Their entry strategy is to accomplish their goals by building a range of branded beverages, anchored within their product name and by enhancing a better market implementation locally and even globally, aligning the power of their network for sustainable growth (www.cocacola.com). The challenge of increasing costs and a weak economic environment have made the Company become very popular; for instance, in the international market due to its deep knowledge of strategic planning and marketing, as well as availability of local communities that could best serve in many countries. The company's understanding of the local communities makes it retain the top position in the international market for soft drinks. Its readiness to highly participate on the marketing effort enhances winning over the market of the soft drink worldwide. Coca-Cola believes that the soul of their project is always the consumers. It will continue to use the quality marketing strategies in all countries in order to maintain the top position of soft drink and beverage production worldwide. Despite these challenges, the company has remained profitable; it has the best and exclusive marketing strategies and research operation units in many countries that will enable the company to be the most powerful marketer in soft drinks industry. According to Bateson (2005, 77), the most fundamental concept underlying marketing is the one for human needs. These human needs include physical needs, social needs, and personal needs; they are basic part of human makeup. Coca-Cola Company has a wide market for its products since it manufacturers and also promotes beverages worldwide. There are three markets that can be applied by the company in order to venture successfully in many countries: mass market, product variety market and target market. In mass market, the seller mass-promotes, mass-produces and mass-distribute one product to a single consumer and that it will appeal to everyone. They promote low costs, low prices and large potential market. In product variety market, the seller produces many products with different features, styles, quality and sizes. The Coca-Cola Company produces various packages of soft drinks in different sizes, containers and shapes that can be designed for variety of buyers, as the taste of customer's changes with time (Bateson 2005, p. 125). The company recognizes market strategies and selects the suitable and develops products and marketing varieties modified to each as the company produces soft drinks for other segments. Coca Cola holds special position in the minds of the people. This is attributed by the way the commodity is defined by the consumer relative to competing product. It has become a routine for the young people to satisfy their thirst; only Coca Cola can satisfy thirst because of its incredible marketing efforts. Moreover, it takes care of the customer, having variety of product. It is the leading industry of beverages unless a prevailing firm enjoys a official monopoly. Its existence is not easy since other firms keep on challenging its strength for its limitations. However, having a wide knowledge in business and marketing, the company will remain the king of beverages and soft-drinks (www.cocacola.com). In order to win the economic recession, Coca-Cola Company has retooled the business system to gain a competitive advantage in the current contracting market. It has used the leadership strategies to meet with its competitors in the world of beverages and soft drinks. The focus on brand management and extensive distribution will enable the company to be the leading and the most profitable beverage company. Coca Cola can divide its market basing on geography and demography. It runs on both local and international basis as it leads due to its deep imminent of various marketing strategies. In demographic perspective, Coca Cola can focus on different people basing on their age, and promotes their product according to the available market (Bateson 2005, p.129). Economic recession has made the citizens less selective when it comes to job opportunities. As a result of this, the company has basically invested in many countries in order to utilize the available human resources, hence promote the international growth and stability. Moreover, it has promoted customer relationship strategy, which is essential for the business to grow in a country where business is dictated by power of the authorities. Customer relationship need to be controlled and that providing customer with what they need will promote the relationship between them and the company (www.cocacola.com). The company requires segmentation since the customers' tastes differs from one individual to another. Segmentation enhances quality services to the customer and employees of the company. Coca Cola Company and other companies face a lot of challenges in the process of strategic management. These challenges would hinder the achievement of the formulated objectives. However, Coca-Cola's products are very sensitive to the customer's disposal income. The company's management has reported two trends that would serve to shape its strategic planning related to the external environment of the company's economic (Bateson 2005, p. 133). The first one is that, coke customers view the soft drinks as less expensive enjoyment; researchers suggest that consumers of low income are likely to go for soft drinks rather than hard drinks because they are cheaper. The second trend is that, Coca Cola tends to monitor the disposal income in more than two hundred countries where it sells soft drinks. According to Bateson (2005, 144), disposal income is gradually rising around the world; this means more purchase of the consumer products, especially in countries where the product purchasing has been minimal. Inflation is a crucial factor in many markets globally and it definitely affects the way the company operates. The company has to adjust the prices in order to counteract the effects of rising costs and produce adequate cash flow to maintain the production capacity. Conclusion In today's unsteady economy, many organizations have realised that they have inadequate processes to handle the demand planning. Regarding with resource management, Coca Cola Company has a very minimal turnover, loyal work force and powerful affinity to promote from within. Generally, it provides smart compensation; it places a great emphasis on training their employees indoctrinating into the 'coke way' (Bateson, 2005, 146). For this reason, its employees worldwide will be able to share a comparable thinking and appreciation for what the product seeks to be in the minds of the consumers. In other words the company places a lot of emphasis on winning the economic recession. The company will have to demonstrate their extensive progress in expansion of their business in order for its human resource management to drive important operating outcomes worldwide, through combination of the progress within their brand and the new products. References Bateson, G 2005, Steps to Quality Management: A revolutionary approach in Coca Cola Company, Jessica Kingsley Publishers, New York. Read More