KINGofColasThelongandslowdeclineoftheworld'sgreatestbrand

CocaColaislargestmultinationalbeveragecompanyandatthesametimetheworld'snumberone
producers and marketers of soft beverages drinks and the company with the most valuable and
recognisedbrandglobally.In2014,globalrevenuewas$46billion,down4%($2billionless)from
2012.It'snotjustCokeexperiencingthisissue,theentiresodamarketinUSisadmistthissituation.The
attentionisonCokebecauseitistheleaderofthesector.Itmayyetbedecadebeforepeoplestart
referringtoCokeinthesamewaytheydoKodak,anditsterminaldeclinemaynotevenhappenatall.
Butifthecompanydoesnotmakeabigstrategicmovesoon,amassivelymaturemarketcouldbe
comingtoanend.Thecompanyisstructuredonagloballevelwithflexibleadjustmentfeaturessoas
tocomplywithitsregionalmarketssensitivity.Thecompanyproducessyrupsandconcentrateswhich
arebeingsoldtotheauthorisedbottlingcompaniesthathavethemandatetoproduce,marketand
distribute products to the final consumers, this process is known and COCACOLA SYSTEM. The
externalrelationshipwithitsbottlingsubordinatesisoneofthecompany'skeystrength,theCocaCola
company work hand in hand with the bottling companies to ensure compliance with product
requirements,qualityandservices.AmultinationalglobalorganisationliketheCocaColaCompany
hasaflexiblestructurethatnotonlyfocusesonproduct,marketing,distributionoffinancebutalso
profoundlyencouragesteamworkineachoftheirinnovationsandtriestoincorporatepeoplewith
differentskillsets.
Ineveryproductdevelopmentthecompanyassembleanemployeeteamofdifferentspecialitiesto
analyseallthepossibilities.Insuchteams,marketingspecialistsisexpectedtoshedlightontheresult
ofhis/hermarketresearchinregardstothenewproduct,foodtechnologiestoclarifythechangesand
how feasible the new product is while the financial expert is to give report on the financial
implications as regards to the new product. In the recent times,the CocaCola product was the
traditional market leader in the cola category. They had achieved success through a strategy of
outsourcingmanufacturingandlogisticstolicensedbottlers,strongretailerrelationships,andbuilding
averystrongbrand.Initsearlyyears,Pepsipositioneditselfasadiscounterandsolditsproductfor
halfthepriceofCokeinalargerbottle.Thispositioninghadsomeimpactwithbudgetconscious
householdsandhelpedPepsibecometheathomedrink,whileCokeremainedthesocialdrink.To
reinforcetheirperceivedhigherproductquality,oneofCokessloganswasitstherealthing.Because
ofthisinitialrelativecompetitiveposition,Cokebelievedtheirproductwassuperiorandthattheyhad
anentitlementofbeingthemarketleader.Cokemadetheiremployeesbelieveintheirproduct.People
atcokehadtoundertakethecokeworkshopwhereinpeopleofalldepartmentslearnthowcokewas
madeandfinallybelievedthatitwastherealthing.Thecommunicationprocesswashighlydevloped
throughintranetanssocialmediaemployeesofcokemadetheworldbelievethatcokewasthereal
thingandtheKingofbeverages.WhereasPepsialwayssawthemselvesasthechallengerandtended
tobemoreaggressiveintheirmarketingtactics.Asidefromstructure,anorganisationisexpectedto
have culture. An organisational culture describes the norms and values of the organisation in its
dealingswithbothinternalandexternalsubordinates.TheCocaColaCompanyalsobaseditsculture
onenhancingandempoweringitsemployee,thisissobecausethecompanyconsideremployeeasits
most valuable asset.Motivated employee are often the engine drive in moving an organisation
forward, the CocaCola Company often organise its employee into teams in carrying out there
operations.Thismakestheemployeefeelvaluablewithintheteambycontributingdifferentideason
proposedoperationsatthesametimebybeinginnovative.
Thecompanybythisstrategycreatesafriendlyandinnovativeculture,whichmadeitpossibleforthe
companytodependonitsworkforceinmaintainingitbrandreputationglobally.Furthermore,trustis
beingestablishedaspartofitsculture.Thisisveryimportantineveryrelationship,asregardstothe
CocaColaCompany.Customersputtheirtrustonthecompanytoprovidegoodqualityproductand

highlevelofattentiontocustomersneeds,bottlingsubordinatestrustthecompanytooperateinthe
bestinterestsofCocaColaSystemandsoalsotheemployeestrusttheirvoicewillbeheardandtheir
variouscontributionsarebeingvalued.Anopenfreecommunicationsisbelieftobeameanstosustain
culture,basedonthattheCocaColaCompanyprovideagoodnumberofcommunicationchannels
thus;monthlyleadershipteammeetingsandworkersteambriefsessions,departmentalteammeetings
holding on weekly basis, each region have a consultative group with one European council
representativeandlastly,frequentsurveysarebeingsentouttomonitoremployeescomplainsor
suggestions.Theissuehittingcokeagainandagainisbeveragedietcokehasnowunderperformedthe
categoryforsixconsecutiveyears,andvolumehastumbledforeightyearsstraight.DietCoke,which
forseveralyearshadsurpassedPepsiinvolume,felltothirdoverallinthemarketlastyear.Market
sharedroppedto8.5%accordingtoBeverageDigest,thelowestlevelsince1999.CocaColaCosaidon
Thursdayitschiefexecutivedeclineda$2.5millionbonusin2014whileothertoplevelemployees
received lowerthanexpected compensation as the worlds largest soda maker struggles to boost
revenuesamidsluggishdemandforsoftdrinks.
WhileChiefExecutiveOfficerMuhtarKentstotalcompensation,whichincludessalary,stockoptions
andchangesinpensionvalue,rose23percentto$25.2millionfromthepreviousyear,hedidnttake
anannualbonusbecauseofdifficultbutnecessarydecisionstakentoacceleratesales.Excludinga
$7.1millionchangeinpensionvalue,hisactualremunerationwas$18.1million,downslightlyfrom
$18.2 million the previous year.Coke has struggled to increase sales as consumers in developed
markets shiftfrom sodato healthieroptions. Carbonated soft drink sales have been declining for
nearlyadecadeintheUnitedStates,accordingtothetradepublicationBeverageDigest.Cokehas
diversifiedintofastergrowingareassuchasteaandenergydrinksandannouncedcostcuttingplans
attheendof2014toeliminate1,600to1,800positionsasitaimstosave$3billionby2019.While
we saw a number of positives in 2014, the companys performance was not up to our high
expectations,CokesboardsaidinalettertoshareholdersonThursday.Thisperformanceisdirectly
reflectedincompensationdecisionsandhowpriorawardspayout.

Q1.

Doyouthinkcokewillmaintainbrandequityfollowingtheraodmapof2020.YouaretheHR
managerresponsiblefortheCokebrandandoverallorganizationalsuccess.FollowtheOB
modeltodriveorganisationexcellencebymaintainingabalancebetweenprofit&people.