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BP6903 Organizational Behavior

Coca Cola
Group Project
Presented to:
Submitted on: January 30, 2014

Submitted by:




Section: 88
Assumption University of Thailand
Semester 1/2015
Table of content
Executive summary ------------------------------------------------------------------------------3
Part 1 Introduction
1.1 Company profile ------------------------------------------------------------------------------4
1.2 Industry overview-----------------------------------------------------------------------------5
Part 2 Situation analysis
2.1 Five force analysis ---------------------------------------------------------------------------6

2.2 PEST analysis --------------------------------------------------------------------------------7

2.3 SWOT analysis-------------------------------------------------------------------------------8
2.4 STP analysis ----------------------------------------------------------------------------------9
2.5 Strategy management -----------------------------------------------------------------------10
Part 3 Organizational behavior
3.1 Organizational structure and culture -----------------------------------------------------12
3.2 The organizational commitment used within the organization------------------------15
3.3 The motivation theory used within the organization------------------------------------17
3.4 The stress issue in the organization--------------------------------------------------------18

Executive Summary
This report will study the Coca-Cola Company, and report divided into two part, part one base on the
marketing view, to do the situation analysis. To provide the company profile and identify the
overview of the company. Secondly, to do the external environment and external analysis. PEST
analysis and Porters Five Forces Model analysis the general environment of Coca-Cola Company.
To do the STP analysis and to introduce that how the company. For the global environment to
specific the strength, weakness, opportunity and threat.
The second part base on the management view, to study the implication organizational behavior. To
introduce the organization structure of company, and study the organizational culture effect the
employee. The motivation theory with the organization to introduce motivate process and how to
motivate the employee and improve the job performance. To introduce how to increase the
organizational commitment, based on three types of commitment and reduce the withdraw activity.

Finally to introduce the stress issue within the organization.

Part 1 Introduction
1.1 Company profile

The Coca Cola Company


Industries served



Asa Griggs Candler, John Pembertoncreated the soft


drink/beverage "Coca-Cola", but it was Asa Candler, who

founded The Coca-Cola Company.



Geographic areas served



Atlanta, Georgia, United States

Current CEO

Muhtar Kent


$ 46.854 billon (2013)

Operating income

$ 10.228 billion (2013)

Net income

$8.584 billion (2013)

Total assets

$90.055 billion (2013)

Total equity

$33.44 billion (2013)


146,200 (2012)

Main Competitors

PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever,

Groupe Danone, Kraft Foods Inc., Nestl S.A. and many

Industry overview
Coca-Cola is the global brand of carbonated soft drink producer. It considered as the most valuable
brand in the world. The Coca Cola is originated in United State, in the late 19th century by John
Pemberton. At first, this carbonated soft drink was invented as a patent medicine. Later, Asa Griggs
Candler brought over Coca Cola and entered to soft drink market in 20th century. Coke was
registered as a trademark for Coca-Cola Company in March 27, 19441.
As a global leader in the beverage industry, the Coca Cola Company offers hundreds of brands,
including soft drinks, fruit juices, sports drinks and other beverages. Coca Cola is targeted mainly on
kids, students, teenagers and families of all classes of people.
Nowadays, Coke is available in more than 200 countries. The consumption rate of Coke is
approximately 1.8 billion serving per day. Coca-Cola is the multinational company that used to sell
soft drink throughout the world via stores, restaurants and vending machines. It is the global business
that operates in the local scale and sells licensed to Coca-Cola bottlers. The company have more than
300 bottling partners worldwide under Coca-Cola system2.


Part 2 Situation analysis

2.1 Five force analysis
Low threat of new entrants
a) Threat of new entrants is low, the high investment require on the bottling processes and
manufacturing plant. The high cost for the production, warehouse, transportation, and market
activity. It not easy for new entrants to have the enough financial support to run the business3.
b) The agreement with Coca Cola and Pepsi, as the largest soft drink produce in the world, they
negotiation the sales territory. Also the Coca cola buy the significant own ship of bottling
company. To reduce the competition of the new entrant4.
High threat of substitute product
Many substitute product of Coca Cola, such as the sports drinks, bottled water, and coffee.
a) The increase health conscious of the customer, they prefer to drink the health drink, the
consumption of bottled water and sports drinks was increased. In Thailand, such as the Mount
water, Chang water, and red bull. They are both available at convenience shop and supermarket.
b) Also the coffee have the same ingredient with Coca Cola, they both include the caffeine, the
available shop of coffee. In Thailand, such as the true coffee. Starbucks coffee, they provide the
add-on services inside the shop. But for Coca Cola, even though it can buy in everywhere, but
less competitive than coffee.
Moderate bargaining power of buyer
a) The customer can buy the Coca Cola product everywhere, such as the convenience shop,
supermarket and the restaurant.
b) The wholesaler and retailer buy the product form the Coca Cola Company and sell to the
customer. They buy in lager quantity, they have the bargaining power to force the price.
c) The many variety of competitors product, the low customer for the customer switch to other
Low bargaining power of supplier
The major supplier of Coca Cola is ingredients suppliers and bottlers

a) For the ingredients suppliers, the raw material to produce the Coca Cola is generally produce
around the world. The raw materials to produce the concentrate like color, flavor, caffeine or
additives, sugar. The Coca Cola can easy to switch the supplier. Also Coca Cola negotiate with
same supplier to get the low price.
b) For the bottler suppliers, Coca Cola have own factory to support the bottle. The Coca-Cola
Enterprises is one of the worlds largest Coca-Cola bottlers, Coca Cola have the significant
percent ownership for this company.
High intensity of competitive rivalry
High competition in beverage industry, the main competitor for Coca Cola is the Pepsi, it take lager
market share around the world. They mostly have the same product. The both company aim to
expand the market, the completion for the two company never end.
2.2 Pest analysis
1) Political:
They are some of the factors that could cause Coca-Cola Companys actual results to differ
materially. In the international environment changes in laws and regulations, including changes in
accounting, and taxation requirements. It is about competitive product and pricing pressures and their
ability to gain or maintain share of sales in the global market as a result of action by competitors.
Political conditions, especially in the international market, developing countries and emerging
markets, also depends on the economic and political conditions, as well as acquisitions or strategic
business alliances with local manufacturers, make the necessary infrastructure to improve production
facilities, distribution networks, sales equipment and technology.
2) Economic
The Coca-Cola Company in the international economic development is strong. However, the
international economic development has changed. The global financial crisis, the Coca-Cola
Company has also been affected.The Coca-Cola Company to explore new market economy, in many
major international market economy improving, such as Japan, Brazil and Germany. These markets
will continue to play a major role in the success and stable growth for a majority of the non-alcoholic
beverage industry5.
3) Social:
In modern society, people pay more attention to a healthy lifestyle. This affect the non-alcoholic
beverage industry, many people turn to bottled water and a diet coke instead of beer and other

alcoholic beverages. Such as bottled water and other more convenient and healthy products6. Many
reaching an older age in life they are increasingly concerned about their lives. This will continue to
affect the non-alcoholic beverage industry by increasing the overall demand and healthier drinks.
4) Technological
Some factors that cause company's actual results to differ materially. Coca-Cola's advertising
effectiveness, marketing and promotion plans. Make some products look attractive. This will help
sales. This advertisement make the product attractive. With more and more advanced technology, the
introduction of new machinery. Due to the introduction of machinery production, the Coca-Cola
Company has greatly increased the development of new products, to ensure product quality and
2.3 SWOT analysis
1. World well brand, high brand value. Base on the Interbrand, the Coca Cola Company is the
most valued brand in the world (about $77,839 billion)7.
2. The largest market share in beverage in the world. It holds the 40% beverage market
share around the world.
3. Good marketing and advertising. The high advertising expenses spending, more than $3
billion in 2013, to help increase the brand recognition and companys sales8.
4. Extensive beverage distribution channel. Coca Cola serves more than 200 countries and
more than 1.7 billion servings a day9.
1. Lack of diversification. Coca Cola focus on produce and selling beverage, the company is
difficult to penetrate to other market, to remain the level of company growth.
2. Focus on carbonated drinks. Carbonated drinks have large amounts of sugar, calories .The
carbonate drink easy to cause the obesity.
3. The high debt level. For CCEs acquisition project, the Coca Cola have almost $8 billion of
debt, the high borrowing costs10.
4. Brand failures to make revenue, weak to introduce new drink. The Coca Cola have more

8 n

than 500 brands, but only few brand have result more than $1 billion sales11.
1. ASEAN 2015. The globalization create good economic environment, the less entry barrier and
low tariff for Coca Cola. Also the cheaper labor cost.
2. Government support. Government set some incentive policy to stimulate the Thai economic.
Such as low the corporate tax rate-20% in 201412.
3. The beverages consumption is increased, the market share of Coca Cola was continuous to
1. Change in customer behavior-health concern. The customer prefer for to drink the health
drink. The disadvantage for the Coca Cola produce the carbonated drinks.
2. Water management. Due to the scarce of water, the control of water for production in same
area, such as the Africa.
3. High raw material costs. Due to the increase material cost, the profit of Coca Cola was
4. High Competition. PepsiCo is compete with Coca Cola over market share.
2.4 STP Analysis
Demographic segmentation
Demographic segmentation of coke focuses on all different age groups of people a. For young
generation what Coca- Cola does are produces advertisements and promotion schemes like lucky
draw and all to attract that segment of customers. For old people coke has launched producing coke
zero and diet coke so that they can consume more.
Psychographic Segmentation
Such as one slogan of Coca- Cola The great national temperance beverage describes the
psychographic segmentation of Coca- Cola13. The people there were brought up in a way of choosing
Coca- Cola over other drinks. Thus, coke definitely pressurizes on all the different groups of people
of the US.
Coca-Cola is targeted mainly on kids, students, teenagers and families of all classes of people. The

standardized marketing which creates same marketing mix for a broad market. The Coca-Cola was
the major drink preferred by all the people.
Coca Cola has positioned it available drink for all generations. Such as advertisements were
produced to drag the attention of all the people from throughout the world. For all age groups of
people are into junks which Coca-Cola thought that they could furthermore target and position its
products as a product for all. The company is make sure all the group of people can pay for all the
different products that it produces and this brand more recognizable for people of all ages.
2.5 Strategy management
Product Strategies: Standardized products
Coca-Cola produces a standardized product in the US market from which they adapt in other Asian
countries and other markets. Coca-Cola launched Coke Vanilla in the US market and the North
American market in 2007. They also launched new Coke zero in the US market in affiliation with the
Hollywood movie Skyfall.
Advertising Strategy: Emotional Approach
The concept of this advertisement is Merry Christmas Everyone. The TVC is derived from
traditional Christmas. The campaign was launched before Christmas holidays 2012. The campaign
had an emotional touch with an adaptation of the Christmas time in the US. For instance, the colors,
the lights are all related to Christmas and the US culture.
Pricing strategy:
The price of coke in most countries depends on a few factors which includes the cost of resources
and production. The price is then adjusted with the inflation in order to get the marked up selling
price. In countries like US the price of coke is marked up by a higher certain percentage than in
China, this is basically because of the industry differences in the US and Chinese market. One of the
major difference is industry standard which also plays a key role in determining the price of coke per
Distribution strategy: Unlike other strategies, Coca-Cola maintains a constant strategy for
distribution throughout the world. For example, Coca-Cola in China produces the products which are
then distributed by their own transport service to miscellaneous wholesalers and retailers (7-11, Wall
Mart and etc)14.
Coca-Cola maintains the strategy in US, the products are distributed to their customers (B2B) by

their own distribution system; there are major restaurants, food distributors, theaters, and amusement

Part 3 Organizational behavior

3.1 Organizational structure and culture
Organizational culture
The Coca-Cola Company have more than 130,600 employee up to December 2013. The Coca-Cola
Companys structure is a tall structure, and hybrid structure include the organic models and
mechanistic models. The company have the centralized structure, but it move to decentralization in
recent years, to adapt easy management in regions. The company make the information flow from
bottom to up, and the company intranet let the information to exchange later. The organization
become more standardization and simplification.
The organization may have some communication problem, the employee and company lack clear
goals. The tall hierarchies will cause some motivation problems, Coca-Cola is attempting to engage
the employee, and to increase the use of companys intranet will increase the communication
between each level. And the upper manager to effective communication with the low level manager
and employee.


The Coca Cola has the separate international division structure. There are five continental divisionEurasia & Africa, Europe, Pacific, North America, Latin America. The company has tight control
over its operations from head office 15. The vice president of each continental division control the sub
division depend on countries and region. And response to the top president of Coca Cola.
The multidivisional matrix is suited for The Coca-Cola Company. The structure increase
coordination between corporate and divisional levels, the manager at different level can work
together to find solution for the problem.
The Coca-Cola change to decentralization, the new offices open to facilitate decision making that
close to the local market. The organization also centralize some department, such as the Bottling
Investments division was created to establish internal organization for our consolidated bottling
operations and our unconsolidated bottling investments16. The organization become to hybrid
structure, to combine the mechanistic and organic.
The Coca cola has a flexible structure. The Coca-Cola not only focus on the product, distribution and
marketing, but also the organizational encourage the innovation of team work, for example, the
product development of Coca-Cola Zero, the company assemble an employee team different
specialties to analysis all the possibilities. For other team, the marketing specialists is to analysis the
base on the market research of new product, the financial expert is report the financial implication of
the new product, the food technologies identify how feasible and clarity the changes of the new

Organization culture
The organizational culture describes the values and norms that organization deal with the internal
and external subordinates. Base on the resource theory, Coca-Cola consider their employee as most
valuable asset to the company, to empowering and enhancing its employee.
The company often assign its employee into team to carry out the operation. Let employee feel
valuable in the team, to encourage the employee to contribute different ideas for the proposed
operations, to be more innovative.
The company remain the sustain culture, aim at an open free communication with the organization,
the Coca-Cola company have many communication channel with manger and employee. Such as the
monthly leadership team meeting and worker team brief session, the monthly regional department
meeting; to do the frequent surveys to analysis the suggestion and complains form the employee.
Coca Cola Companys Organization Culture are18:
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, its up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
From these values, we can see the Coca Cola displays a high individualistic culture, in which
individual goals and management of individuals are emphasized. Leadership, collaboration, integrity,
accountability, passion, diversity and quality are the companys seven individual goals. In an
individualistic culture, taking care of oneself comes first because one believes that once he is taken
care of, then the group is also taken care of. It can be seen that the Passion and Diversity of Coca
Cola directly demonstrate Coca Colas anticipation on its people--to love your work and to be
innovative at work. Hence, Coca Colas culture has a trend of individualism.
Coca Colas culture is also a typical American style culture which is activity oriented, person
oriented, open and loose. Holding such culture, Coca Cola has developed more smoothly and
successfully than other MNCs.


3.2 The organizational commitment used within the organization

High organizational commitment will lead good job performance for the organization. To let them
inside the organization, reduce the turnover rate for the company and withdraw behavior.
There are three types of commitment, this topic will introduce how the company to increase
Affective commitment
For emotion base, let the employee feel a sense of affective commitment identify with the
organization, accept that organizations goals and values, and are more willing to exert extra effort on
behalf of the organization.
The energizing work environment and atmosphere that Coca-Cola provide to their employee. The job
is very rewarding, as the employee in Coca-Cola, they have many benefit. On site, employees have
access to a cafeteria, dry cleaning, a credit union, a store and free parking. Different Coca-Cola work
sites offer different perks. Such as in US, the Coca-Cola headquarters includes free drinks and fruit,
special hours during the summer and an on-site gym. Also Coca-Cola provide the flexible working
schedule, every week have the employee form, and the employee will not feel boring for their work. ,
Continuance commitment
The cost based, the continuance commitment exists when there is a profit associated with staying and
a cost associated with leaving.
The Coca-Cola provide many benefit to increase the commitment of the employee. The employee
deserve to get pay form their work. Coca-Cola Company is the one of the highest paying company
around world. The company use this strategy to attract and keep the employee. A Coca-Cola Red Tag
program provide employees with travel and merchandise as a way to recognize exceptional
performance. Employees also get tuition reimbursement, and their children can qualify for
scholarship funds. Car discounts, free parking and employee discount programs are also offered19.
Normative commitment
For the obligation base. The sense that people should stay with their current employers may result

from personal work philosophies or more general codes of right and wrong developed over the
course of their lives.
Coca-Cola give many opportunity to the employee to improve themselves. The company provide
both professional and personal development for the employee. Allowing employees the opportunity
to grow in their skills and be trained to do even more is a big focus at Coca-Cola. The company
offers a number of development programs to encourage and motivate employees. Developmental
forums offer teaching opportunities; and functional developments let employees build job skills for
their area of focus. Coca-Cola University is an online teaching environment for employees. In
addition, employees are given short-term assignments that give them a chance to work in a field
different from their own, whether it's a different department or a different country20.
The organization help the employee to develop their career, the employee will feel inside the
organization, to increase the retention rate of the employee.

3.3 The motivation theory used within the organization

To use the Clayton Alderfers ERG theory to identify the motivation system of Coca Cola. The ERG
theory include the existence, relatedness, and growth.

Firstly, the existence needs of the employees, it can be define those need have desired physical effect
for the employee. The employee should be harmony within the organization, they should have a
sense of stability in their current position, as well as a potential for growth within the organization.
The employees want to satisfy with what they work. The company provide many program to fulfill
the need for the employee. For example, the company offers cultural awareness programs and
employee forums; these forums consist of employees that share similar interest or backgrounds. The
individuals within these forums provide both professional and personal growth to one another. The
Coca-Cola Company motivates their employees with incentives and occupational opportunities on a
daily basis21.
Secondly, the relatedness which desires for satisfying interpersonal relationships. The organization
try to connect the employee and remain the relationship. The Coca-Cola Company use the one to on
approach between the manager and employee. The employee report to the team leader, the problem
in the workplace. To create the positive environment, to build the trusting relationship with other
coworker. It can help to improve the company productivity, because the employee express their
personal need that could affect their performance at work. Another reason why The Coca-Cola
Company uses the relatedness need is to build meaningful relationships between co-workers. If an
individual likes who he or she is working with, they tend to be more motivated to continue to come
to work for the personal relationship and networking22.
Thirdly, the growth need, state as the desire for continued personal growth and development. The
Coca-Cola Company provide the promotion to the employee, the company implement the training
program to encourage the individual to move ahead in the company.
The company also practices several incentive and reward programs to help motivate the employees
to continuously improve productivity. To understand the needs of each individual .Understanding an
employees needs is crucial in maintaining a high morale within the organization. As a result, a
company that maintains a high morale among its employees is able to become more productive in the
long run.
3.4 The stress issue in the organization
1. Stress Management
Popular the world over 110 years of the Coca-Cola Company is the world's largest beverage
company, is also soft drinks sales market leader and pioneer. In an increasingly competitive era of
new economy, the Coca-Cola company employees facing the life stress, working stress and to
increase, pressure has become the enterprise management must face the tough questions.

The Coca-Cola company attaches great importance to the staff stress management, implement the
occupational stress management program, has become an important aspect of enterprise human
resources management, can help enterprise managers from the height of the strategy to improve the
staff stress management, for the enterprise development.23
2 .The main factors of employee pressure
The Coca-Cola system is regular, whole, comprehensive training, its purpose is to let everyone feel
this is a big family, in addition to work, also can promote the personal growth.
In general, stress comes from four aspects 1Work Hindrance Stress 2 Non-work Hindrance Stress
3Work Challenge Stress 4Non-work Challenge Stress
Non-work Hindrance Stress
1) Personal factors
For employees, the biggest threat is unemployment pressure. Employees hope to have the
opportunity to learn a lot in Coca-Cola Company, there are a lot of training and development
opportunities, to realize own value. And have the chance of promotion, is very important for
employees, but not sure. So can bring pressure to employee.
2) Family and life issues
Marriage, divorce, and economically to make ends meet, plus housing and property prices rose,
children go to school and employment will brings great pressure to employees, and make the
employees in the work had to be taken into account when the trouble back at home 24. So the CocaCola Company by creating a harmonious pleasant working environment, reduce the pressure of
3) Individual differences
Pressure source can lead to stress reaction, can lead to much pressure intensity, critical look at the
basic tendency of personality. Pressure personality differences. The Coca-Cola company by creating
a harmonious pleasant working environment to cultivate employees' team spirit is advantageous to
the communication between the employees and training staff team consciousness
Work Hindrance Stress
1) Work burden
There are too many tasks to be done, or doing nothing will cause employees to stress at work. The
Coca-Cola Company to have a clear division of responsibilities, each employee will be focused on
post professional skills training.

2) Role conflict and ambiguity

Coca-Cola system training is regular, company-wide. As for the new salesman, the old business
backbone regularly or irregularly within this unit for business training; for the old business backbone
is partial to the upper management to attend training, constantly from the summary of practice and
theoretical guidance on business skills.
3) Interpersonal demands
The Coca-Cola Company and employees often organize some group activities, such as football team,
here is both supervisor and department, everybody together in the game, fully embody the team
4) Organizational change
How organizations whether lack of justice in distribution system, rewards and punishment system, to
not give employees a sense of security, and so on, these are important source of stress.
Main seize potential in the Coca-Cola company's training is good, strong ability of employees to
focus on training, the training is mainly to provide them with more knowledge and skills in the field
of new, promoted the demand of jobs in order to achieve. And carefully explain the system of the
Non-work Challenge Stress

The strategy of management personal work pressure

1) Mentality emotion management

Self-regulation, hypnosis, biofeedback, and relaxation activities, employees can relieve tension
2) Self-bear pressure
Stop comparing with others, cherish what you have. Learn positive self-talk, write a resume, the
advantages are listed up to a week browsing, as self-talk.
3) Time management.
According to the priorities of time management, work list, the complex things into each part,
understand and learn to apply the basic principles of time management help staff work better cope
with stress.
4) To expand the social support network.
Through chatting with friends, family, and colleagues can relieve pressure
Enterprise staff management strategy work pressure
1) Create a social support system decompression
Coca-Cola also send employees to us headquarters, communicate with other colleagues to learn;

Coca-Cola China to Hong Kong regional office training headquarters.

2) Job redesign decompression. The number of staff to complete various tasks, give employees
A chance to display a variety of skills, increase the corresponding economic compensation, job
enlargement help redefine roles, role conflict and fuzzy25. Cokes professional skills training, main
seize potential well in the training, the ability of employees to focus on training, the training is
mainly to provide them with more knowledge and skills in the field of new, promoted the demand of
jobs in order to achieve. The Coca-Cola Companys internal recruitment.

Good organizational behavior will bring profit to the organizational. Employee is the valuable asset
for the company. The Coca Cola Company have good design for the organizational structure, move
to decentralize, to adapt local market, and reduce hierocracy, let operation become more
effectiveness.. The sustainable organizational culture to remain communication with the
organization, listen voice form the employee.
Let employee feel belong to the organization, to improve the organizational commitment. To provide
the motivation system, fulfill the need of the employee, and improve their job performance. Also the
stress issue within Coca cola , to do the stress management.
Coca-Cola is one of longest historical company since late 20th century. It has produced soft drink for
global consumers over 200 countries. The company has contributed too many aspects; until its
become successful like nowadays. The Coca-Cola did accessed to local market perfectly, it can
promote the right image to those mass target market in each country.
Even though the product of Coca-Cola is standardize product, but theres adaptation in marketing
activities. Thats why Coca-Cola is good example for the concept of think globally, act locally.