Coca-Colastrategic based analysis
Thecompany I chose for my strategic based analysis is Coca-Cola. I chosethis company because it is the biggest bottled beverage producer withindustry footprints all over the world. Second, I chose Coca-Colabecause it is a company I admire and would love to work theresometime. In this paper, I will be examining whether or not Coca-Colashould use recycled materials to build their packaging withoutmodifying or re-dying the materials in any manner. Coca-Cola as anestablishment accidentally began in 1886 when one curious AtlantaPharmacist, Dr. John Pemberton, first created a distinctive tastingsyrup. He took it to a pharmacy in his neighborhood, where it wasmixed with carbonated water. The result was termed excellent by thosewho tasted it. Pemberton`s assistant, Robinson Frank, then named thebeverage "Coca-Cola" and designed the logo that is stillbeing used today (Vrontis & Sharp, 2003, p 289).
Beforehis demise in 1888, Dr. John sold parts of his business to differentparties. However, an Atlanta businessman by the name Asa Candlerpurchased a majority of the company’s portions. Under theindustrious leadership of Candler, Coca-Cola expanded its territoriesbeyond the confines of Canada. In 1894, Joseph Biedenharn installedthe very first bottling machine in the back of his fountain of sodain Mississippi. He was the first person to bottle Coca-Cola. Fiveyears later, large-scale bottling of Coca-Cola began after threebusinessmen secured exclusive rights to bottle and sell Coca-Cola (p.291).
Aftera while, the three businessmen purchased all of Candler`s rights tothe business and released him from the management duties of thecompany. Lupton John, Joseph Whitehead, and Thomas Benjamin thendeveloped what became to be the Coca-Cola global bottling system.Coca-Cola currently operates in more than 200 countries worldwide,and it is well acknowledged for its soft drink "Coca-Cola". It`s headquartered in Atlanta, Georgia. Its holdings employ morethan 40,000 people globally. It is an undeniable fact that Coca-Colais one of the most visible companies in the world. Even if theenterprise started in the United States, 80% of its revenue is raisedby company profits from outside the United States (Vrontis &Sharp, 2003, p. 295).
Theworld`s soft drink market is controlled by three major householdnames Coca-Cola, Cadbury-Schweppes, and PepsiCo. However, a lion`sshare of 47% of the global market is claimed by Coca-Cola, comparedto PepsiCo`s 21% and Cadbury-Schweppes` 8% (p. 291). Therefore, it isevident that Coca-Cola is the dominant player in the internationalsoft drink market with the pole position. Coca-Cola`sall-encompassing organizational culture is defined by seven corevalues passion, leadership, collaboration, integrity, quality,accountability, and diversity. The mission of Coca-Cola is to refreshthe world, inspire moments of happiness and optimism and creatingvalue that makes a difference. The company`s vision is sustainableand quality growth (Vrontis & Sharp, 2003).
ForCoca-Cola to uphold and keep its vision and mission, the companymaintains that two assets are most valuable their people and brand.Considering the fact that Coca-Cola is an international company, thecompany leverages and sources an international team comprised ofdiverse people with innovative ideas and talents from all over theworld. Coca-Cola`s diverse workplace strategy entails programs thatattract, develop and retain talent educate all associates andemployees on the skills necessary to achieve sustainable growth. Inaddition to this, Coca-Cola upholds and maintains its vision andmission by ensuring that their product consumers have the bestqualities of soft drinks.
Asa business entity, Coca-Cola works hard to deliver their qualitydrinks as sustainably a possible. Therefore, they have asustainability program in play. One of the many sustainabilityinitiatives is recycling and reusing. We all know that Coca-Cola`sproducts are presented in either glass or plastic bottles. All thesepackaging items contain substantial amounts of carbon to leave adisastrous carbon footprint in the wake of their improper handling.Therefore, to ensure sustainability, Coca-Cola engages in reducingand recycling of bottles and cans. Coca-Cola`s glass bottles containabout 38% recycled glass while more than half of their aluminum cansare recycled (Vrontis & Sharp, 2003).
Usingmetals in their raw state saves roughly 95% of the energy required tomanufacture it from its ground state. To increase the quantity ofrecyclable materials, Coca-Cola invested in Continuum Recycling inLincolnshire, a plant for collecting and reprocessing plasticmaterials in a joint scheme with ECO Plastics (Vrontis & Sharp,2003, p. 301). Ever since the start of this initiative in 2009, morethan 20% of Coca-Cola establishments have managed to hit a 99.5% zerowaste to landfill target. Packaging is a valuable and significantresource, although it is sometimes cast-off to landfill. Coca-Cola iscommitted to supporting a circular economy where re-usable resourcesare recycled for as long as possible, filtering back into the economyunnecessary losses to ensure they obtain maximum value from theirpackaging (p. 300).
Accordingto Vrontis and Sharp (2003), Coca-Cola`s recycling costs account for18% of the company`s average operating expenses. In 2014, Coca-Cola`snet operating costs were 45, 998 billion dollars. 18% of 45, 998 isapproximately 8 billion dollars (p. 298). This figure represents thecost of recycling materials without any modifications on thematerials in any way. Supposing Coca-Cola considers recyclingmaterials factoring in the idea of changes the implication is thatthe operating expenses will substantially scale upwards. This isbecause the modification of materials will require the injection ofmore capital to install manufacturing and processing systems thatwill be used to modify the materials being recycled to the desiredgrades.
Byso doing, Coca-Cola would be increasing the operating expenseswithout the guarantee that they will recoup the investments made fromthe sales of soft drinks with these modified packages. And if changeswere to be made, the pricing of their products would be the firstfactor affected because soft drinks would be made more expensive tooffset the costs of producing their packaging materials. The rippleeffect of this is consumers going for alternative products that arecheap but will still serve the same purpose.
Therefore,although Coca-Cola supports sustainability initiatives, adopting asystem of modifying recycled materials for them to build theirpackaging materials would be disadvantageous to the company. Takingthis action means that operating expenses will skydive while revenuesremain at probably the same level. The management should sweep thisinitiative under the carpet until they receive a green light from apanel of experienced financial advisors and economists after thoroughresearch and consultations. Even if a green light is awarded, themanagement should, first of all, apply it to some their manufacturingplants and not all of them. The stakeholders, who would not wanttheir dividends to dip, should also shut down the idea until it iscertified by professionals that modifying raw materials whenrecycling them would support the company`s sustainabilityinitiatives.
Vrontis,D., & Sharp, I. (2003). The Strategic Positioning of Coca-Cola intheir Global Marketing Operation. TheMarketing Review Mark. Rev.,3(3),289-309. Retrieved March 6, 2016.