The Coca‐Cola Company is truly global, and its main product is recognised and consumed worldwide. The Company organises and structures itself in a way that reflects that fact. At the same time, the Company looks to meet the particular needs of regional markets sensitively and its structure also needs to reflect that fact.
This Case Study illustrates the way in which the Company has built an organisational structure that is robust and yet also flexible enough to meet these particular requirements.
2. A global and local strategy
The Coca‐Cola Company is the world’s largest beverage company and is the leading producer and marketer of soft drinks. The Company markets four of the world’s top five soft drinks brands: Coca‐Cola, Diet Coke, Fanta and Sprite.
The success of The Coca‐Cola Company revolves around five main factors:
a. A unique and recognised brand ‐ Coca‐Cola is among the most recognised trademarks around the globe
b. Quality ‐ consistently offering consumers products of the highest quality
c. Marketing ‐ delivering creative and innovative marketing programmes worldwide
d. Global availability ‐ Coca‐Cola products are bottled and distributed worldwide
e. Ongoing innovation ‐ continually providing consumers with new product offerings e.g. Diet Coke (1982), Coca‐Cola Vanilla (2002).
The illustration shows the worldwide distribution of sales of Coca‐Cola products by quantity in 2003. Although
CocaCola is a global product with universal appeal, the Company actually operates in local environments around
the world, with each country having its own unique needs and requirements.
So, while Coca‐Cola is probably the only product in the world that is universally relevant in every corner of the globe, the Company feels that its responsibility is to ensure that with every single can or bottle of Coca‐Cola sold and enjoyed, individual connections are made with their consumer.
That can only be achieved at a local level. The challenge facing The Coca‐Cola Company today is therefore to continue to build an organisational structure that will deliver a global and local strategy.
3. The relationship between strategy and structure
An organisation’s strategy is its plan for the whole business that sets out how the organisation will use its major resources. An organisation’s structure is the way the pieces of the organisation fit together internally. It also covers the links with external organisations such as partners.
For the organisation to deliver its plans, the strategy and the structure must be woven together seamlessly. The goal of The Coca‐Cola Company is ‘to be the world’s leading provider of branded beverage solutions, to deliver consistent and profitable growth, and to have the highest quality products and processes.’ To achieve this goal, the Company has established six strategic priorities and has built these into every aspect of its business:
a. Accelerate carbonated soft drinks growth, led by Coca‐Cola
b. Broaden the family of products, wherever appropriate e.g. bottled water, tea, coffee, juices, energy drinks
c. Grow system profitability & capability together with the bottlers
d. Creatively serve customers (e.g. retailers) to build their businesses
e. Invest intelligently in market growth
f. Drive efficiency & cost effectiveness by using technology and large-scale production to control costs enabling our people to achieve extraordinary results every day.
There are many ways to structure an organisation. For example, a structure may be built around:
▪ Function: reflecting main specialisms e.g. marketing, finance, production, distribution
▪ Product: reflecting product categories e.g. bread, pies, cakes, biscuits
▪ Process: reflecting different processes e.g. storage, manufacturing, packing, delivery.
Organisational structures need to be designed to meet aims. They involve combining flexibility of decision making, and the sharing of best ideas across the organisation, with appropriate levels of management and control from the centre.
Modern organisations like The Coca‐Cola Company, have built flexible structures which, wherever possible, encourage teamwork. For example, at Coca‐Cola Great Britain any new product development (e.g. Coca‐Cola Vanilla) brings together teams of employees with different specialisms. At such team meetings, marketing specialists clarify the results of their market research and testing, food technologists describe what changes to a product are feasible, financial experts report on the cost implications of change.