Report On:

Management Function and Environment Analysis of CocaCola

Submitted To:

Md. Rubel
Assistant Professor
Department of Management Studies
Jahangirnagar University.

Submitted By:

Shuvo Sharma
ID: 20202098

Course name: Principles of Management, EMBA-504

Section: D, Fall-2021

Date of Submission: 27th February, 2021

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 LETTER OF TRANSMITTAL

27th February, 2021

To,
Md. Rubel
Assistant Professor
Department of Management Studies
Jahangirnagar University.

Subject: Report Submission.

Dear Sir,

It is our immense pleasure to submit the report on “Management Function and Environment
Analysis of CocaCola” as a part of our EMBA curriculum. To prepare this report, we have gathered
what we believe to be the most complete information available. The journey will remain as a
valuable asset in our life.

It was an enormous opportunity for us to prepare the report under your instruction, which really
was a great experience for us. In order to make our report most perfect, we have collected various
information from our text books, websites and various newspapers.

We have worked hard preparing this report and sincerely tried to make the paper a comprehensive
one within the given time span. Any lacking or fault may arise as our unintentional mistakes. We
will be always available for answering any query regarding this paper. We believe that the
preparation to prepare our report will help us to work in our career.

Sincerely yours,

Shuvo Sharma
ID: 20202098

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 ACKNOWLEDGEMENT

One of the most pleasant parts of preparing this report is the opportunity to thanks those who have
contributed to it. Unfortunately, in any establishment, the list of expression of thanks-no matter
how all-embracing-is always imperfect and insufficient, this acknowledgement is alike other is not
an Immunity.

At first, I want to thank God who gave us energy, forbearance and also knowledge for making that
kind of report. Secondly, I want to express my gratitude to our course instructor Md. Rubel,
Assistant Professor (JU) without him I must be unable to make it.

I’m really grateful to the management of CocaCola for giving me a chance to coordinate with us
for making the report on their esteem organization.

I can never forget the unbelievable cooperation of all the officials of CocaCola, Head Office. I
think that, it was impossible for us to know and finally to make such a descriptive study and a
presentable report on such a wide aspect without their extended helping hands. I also would like
to appreciate and thankful who gave me a full co- ordination to enquiry and answer of numerous
questions.

Finally, I want to thank our friends and course mates who helped us for gaining information and
complete the report successfully.

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 EXECUTIVE SUMMARY

The Coca Cola company is perceived to be the most famous trademark on the globe, and it is
equally so. The company claims more than 400 brands that appeal to a wide range of individuals
throughout the world. They are in a position to fulfill needs of every one of their buyers making
their experience with their beverages a better one. The entity’s drinks entice a lot of people across
all races, age, and gender. Coca Cola is outstanding for its overall popularity as its items are sold
in over four hundred countries in the world, while major contenders like Pepsi are just available in
very few countries. Such a competitive advantage has placed. It is because of it's inexpensive to
purchase nature and its availability to the clients. Recent studies indicate that, lately, for one to
buy a soft drink there is an in-depth decision making required. The Coca-Cola organization has
made exemplary strides mainly to offer a variety of products to its clients even with the competitive
nature of the market. Consumers’ choice gets based on the brand aspect in which the organization
wins most customers' heart against its rivals. Even though a significant number of people deny
cases to having inclination picking between Coca-Cola items or its rivals', many have a strong
desire in some way. Many inclines toward Coca-Cola products since the organization has more
than hundred years of history and predictable brand image. This picture is engraved in a lot of
people subsequently end up purchasing their beverages. It is out rightly conspicuous in the
company’s high market share in the field of soft drinks.

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 TABLE OF CONTENTS
LETTER OF TRANSMITTAL ...................................................................................................2
ACKNOWLEDGEMENT ...........................................................................................................3
EXECUTIVE SUMMARY .........................................................................................................5
INTRODUCTION .......................................................................................................................6
Background of Coca-cola.........................................................................................................6
MANAGEMENT FUNCTION OF COCACOLA COMPANY ................................................6
Planning .....................................................................................................................................7
Organizing .................................................................................................................................7
Leading .......................................................................................................................................8
Controlling ................................................................................................................................9
EXTERNAL BUSINESS ENVIRONMENT .............................................................................10
General Environment ............................................................................................................10
Economic .............................................................................................................................10
Technological .......................................................................................................................10
Sociocultural ........................................................................................................................11
Political ................................................................................................................................11
Legal .....................................................................................................................................11
Task Environment ...................................................................................................................11
Competitor ..........................................................................................................................11
Customer ..............................................................................................................................12
Supplier ................................................................................................................................12
Strategic partners ................................................................................................................12
Regulator ..............................................................................................................................12

INTERNAL BUSINESS ENVIRONMENT ..............................................................................12

Value system ...........................................................................................................................12
Mission and vision and objectives .........................................................................................13
Management structure and nature .......................................................................................12
Human resource .....................................................................................................................12
Company image and brand equity .......................................................................................13
Physical asset & Facilities ......................................................................................................13
Marketing Resources .............................................................................................................13
Financial Factors ....................................................................................................................14
RECOMMENDATIONS AND CONCLUSION .......................................................................14

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INTRODUCTION

Background of Coca-cola -

Coca Cola was launched in 1886 in Atlanta, Georgia. In the international beverage market, Coca
Cola has established itself as the most prevalent and massive company. It has maintained its top
position in the international market of the non-alcoholic beverage industry by devising advanced
strategies in promotion, dissemination and manufacturing aspects. Several soft drink brands like
Sprite, Fanta, Diet Coke, Minute Maid, etc. comes under the Coca Cola company and contribute
an estimate of $ 14 billion profit to the company (Karan, 2010).

If compared to its competitors’ production and distribution network Coca Cola has positioned itself
at top position. Coca Cola since its inception, i.e. 133 years has sustained its impression and
goodwill among its customers. The primary motive of this enterprise is to amplify the value of its
market shares by keeping up an affable relationship with its partners. To suffice the needs and
requirements of the customers in the market, the marketing strategies are prepared by referring to
customer reviews and feedback. By adopting this approach, the company had eliminated many
risks in business operations, thereby providing a sound defense for the company assets.

MANAGEMENT FUNCTION OF COCACOLA-

Every business entity or organization, whether big or small, needs to develop and implement the
basic four management functions. The success of any business organization depends on how the
four functions of management are implemented. These management functions allow an
organization to handle its business strategy, tactical and operational decisions. The four functions
of management are crucial for an organization to succeed. Therefore, these functions should be
properly developed and implemented for an organization to succeed.

The four major functions of management of the Coca-Cola Company which are as follow: ·

• Planning
• Organizing
• Leading
• Controlling

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Planning

The vision of the Coca-Cola Corporation is to become the biggest and the best anchor bottler in
the world and its mission is to refresh everyone which guides its management team in the planning
process.

The top management of the company engages in formulating five year longer term plans as well
as shorter term planning for the next year or so. The idea behind this type of planning is to have a
strategic vision extending over a longer period as well as a flexible and adaptive strategy to change
according to the imperatives of its external environment.

Apart from this strategic planning, the top management at Coca-Cola also engages in tactical
planning in consultation with the middle management who in turn acts on the feedback from the
salespersons on the ground.

The planning at Coca-Cola entails setting targets for all employees at all levels that are periodically
reviewed for either success or failure in meeting the targets and in case of the latter, feedback is
sought from the managers and the employees who have failed to meet the targets about the reasons
for the same. This is then incorporated into the decision making loop so that the next year’s plan
can address and redress the shortcomings as well as set new targets taking into account these
aspects.

An example of how planning at Coca-Cola works can be gauged from this year’s target for the
managers to increase sales by 20% over last year’s target and increase the total customer based by
10%.

This is the micro level planning which is complemented by the macro level planning which can be
seen from the objectives of increasing market share ranging from 5 to 30% for the middle
management in the various markets in which it operates. Further, there are operational goals which
are set for the salespersons on the ground and which are to do with the point of sale and the other
front end supply chain interfacing roles to actualize coordination and cooperation among the
partners, bottlers, vendors, and distributors.

Organizing

Coca-Cola follows the decentralization within centralization model of organizing itself. This
means that while the global headquarters retains its overall decision making, the corporation is
divided into regions and geographical territories in which it operates. These regional divisions are
then organized into the functional departments which in its case comprise the Production,
Industrial Relations, Sales and Marketing, and Human Resources departments.

The key to understanding the organizing function at Coca-Cola is to recognize that employees with
similar skills and common work functions are grouped together. This helps the company avoid

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redundancies in problem solving processes as well as bestowing a certain functional autonomy at
all levels.

Further, the organizing function at Coca-Cola follows the maxim of the span of control not
exceeding five direct reports which means that no employee has more than five others reporting to
him or her. Having said that, it must be noted that there is cross functional reporting as well which
is in the case of the managers and the functional heads reporting to the other divisional heads in
addition to the country heads.

Moreover, the managers at all levels are afforded a high degree of autonomy which empowers
them to decide according to the specific local needs.

Finally, the organizational structure is such that redundant layers in the hierarchy are eliminated
and the layers of direct and dotted line reporting ensure that information flows through the
organization without the clogging of the organizational arteries due to bureaucratic mindsets as
well as blockages due to communication gaps.

The overall responsibility for each country or region is with the country or regional head and the
functional heads under him or her also report to the global functional heads. Similarly, the
responsibilities are clearly defined which means that accountability is taken care of as is the aspect
of transparency.

Leading

Though Coca-Cola is organized around geographical regions and then the various departments for
each region, the company emphasizes the importance of transformative leadership at both the
Global and the Local levels.

This means that local managers and the heads of departments in addition to the Country Heads in
the various markets that the company operates in are free to decide on the appropriate strategies
for their territories as long as they conform to the global norms and global culture that permeates
the organization. This decentralization within centralization is the hallmark of the Glocal approach
which has been stated in the thesis.

Apart from this, the leadership at Coca-Cola believes in a democratic and laissez faire approach to
leading which is necessary considering the business it is in which is heavily dependent on both the
macro level vision and mission that need to be translated and transformed into micro level
execution.

Typically, the General Manager is at the top of the regional hierarchy who in turn reports to the
country head. These general managers have other managerial subordinates such as the ones
referenced for this article who have mentioned how the organization practices behavioral
leadership that is based on acting on the specifics of the situation at the micro level.

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The managerial styles of these managers also follow the incentive-based system for actualizing
peak performance from the salespersons. In this system, monetary and non-monetary incentives
are provided to the salespersons to motivate them and make them meet or even exceed their sales
targets.

The monetary incentives include pay hikes, bonuses, and commissions based on the sales achieved
whereas the non-monetary incentives include vouchers for vacations, travel, and discounted
holiday packages for the employee and his or her immediate family.

Controlling

The controlling function in Coca-Cola is done through periodic reviews of managerial and
salespersons performance. Towards this end, an appraisal system based on objective evaluation of
whether the employee being appraised has met his or her targets forms the backbone of the
controlling function in the company.

Though managerial performance goes beyond evaluation of targets and their compliance as the
managers typically perform other roles such as people management and strategic planning, the
salespersons are appraised based on the Sales Person’s reporting system and the Sales Person’s
evaluation system.

The former tracks the activities of the salesperson on a daily basis whereas the latter is done
according to the appraisal cycle and the results of which are used to determine promotions,
bonuses, and other incentives. The evaluation period is usually a year for sales managers whereas
it is a quarterly cycle for the market development roles, and a monthly cycle for the salespersons.

Apart from these performance measures, the employees are also evaluated according to their
contribution to the actualization of the overall goals of the organization as well as on their soft
skills including communication, people management, coordination, and service quality.

Further, the controlling function also ensures that a performance development plan is prepared
which takes into account the salespersons meeting the targets such as growth in sales, market
development, and completion of customer and partner calls including conversion of cold calling,
attendance, and the punctuality of the salesperson.

The key point to note about Coca-Cola’s controlling function is that it follows a Glocal approach
wherein the performance measures vary according to the local conditions of the markets in which
it operates.

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External Environment Analysis of Coca Cola

Doctor John Pemberton, a pharmacist, was the person who invented the recipe for Coca Cola. The
recipe of Coca Cola includes ingredients like carbonated water, sugar cane syrup, caffeine and
extracts of cola leaves.
The exterior environment of a company could be segregated into the Macro environment and
Microenvironment. The macro-environment in the case of Coca Cola denotes the factors which
are uncontrollable and peripheral in the manner and have the potential to vary the business,
strategies, and decision making. These factors are majorly technical, political, social, economic,
and legal. The features like corporate social responsibility, environmental forces, and
demographics come beneath these features. If considered the microenvironment of Coca Cola, the
factors which affects the daily operations are trends in the market, suppliers, the structure of the
market, customers and competition. The detailed study of these factors regarding Coca Cola will
give an overview of how the giant companies take control of the circumstances by efficiently
dealing with the obstructions.

General Environment:

Economical

After the introduction of New Economic Policy in the Bangladesh economy, the financial
condition of the country has become very stable. The introduction of this policy has abridged the
issuance of an industrial license. The liberalization in the policy of foreign capital had attracted
more foreign direct investments which have improved the national economy. As compared to the
statistics of 2013 the economy has achieved 5% growth which is 5.07 trillion approximately.
Since the economy is in stable condition and is in the path of positive growth, Bangladesh is a
very potential market for Coca Cola.

Technological

Although Bangladesh is a developing country, it has made great advancements in the field of
Information Technology. The technology in Bangladesh is synchronized and adapted for the use
of 4G and 5G networks.
The space and research technology of Bangladesh has achieved many milestones and hence self-
sufficient in providing the updated solution. These conditions provide confidence to Coca Cola
to further expand its business in Bangladesh.

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Sociocultural

The majority of the Bangladesh population is youth and possess high purchasing power. As the
Bangladesh population is growing exponentially, the number of customers will also increase.
The young generation of Bangladesh gives more importance to the health and their health-
conscious nature is driving them to choose healthy and refreshing drinks.
Being a sub-tropical country, the weather of Bangladesh is very hot and insists the people buy a
cold refreshing bottle of beverage to quench their thirst. The affinity of the Bangladesh
population towards foreign products is very favorable for Coca Cola.

Political

Like other developing countries the market of Bangladesh is susceptible to the aspects like
ideologies followed by the political parties and various policies by the government. By the new
economic policy of Bangladesh, the idea of liberalization and globalization were introduced in
the market which paved the way for Coca Cola’s entry. For the reason that the political system of
Bangladesh is very corrupted and dishonored, the company had to face intense coercion from the
political parties.

Legal

Because of the rapid growth of the FMCG market in Bangladesh, the legislation has introduced
many amendments in the law pertaining to it. These changes have made a positive impact on the
economy by which the FMCG market has shown rapid growth.
To support the investing companies the government of Bangladesh has introduced the idea of
excise free zones. This is a great relief to the companies since it will allow them to concentrate
primarily on the manufacturing process rather than outsourcing. These legal proceedings provide
are providing a very healthy environment for Coca Cola.

Task Environment:

Competitors:

Competition not only include the other firms that produce same product but also those firms which
compete for the income of the consumers the competition here among these products may be said
as desire competition as the primary task here is to fulfill the desire of the customers. The
competition that satisfies a particular category desire then it is called generic competition.

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Customer

The major task of a business is to create and sustain customers. A business exists only because of
its customers. The choice of customer segments should be made by considering a number of factors
including the relative profitability, dependability, stability of demand, growth prospects and the
extent of competition.

Suppliers

An important force in the micro environment of a company is the suppliers, i.e., those who supply
the inputs like raw materials and components to the company. The importance of reliable
source/sources of supply to the smooth functioning of the business is obvious.

Regulator

Regulators can be involved up-stream of the procurement process, by removing legal barriers to
entry (which include license restrictions and access fees to the market in order to control the
number of firms serving the market), technical barriers to entry (which include sunk costs) and by
organizing auctions to decide which operator is best able to provide value for
customers. Regulators can provide sector expertise and ensure transparency in the
procurement process.

Internal environment:

The internal environment is the environment that has a direct impact on the business. Here there
are some internal factors which are generally controllable because the company has control over
these factors. It can alter or modify such factors as its personnel, physical facilities, and
organization and functional means, like marketing, to suit the environment. The important internal
factors which have a bearing on the strategy and other decisions of internal organization are
discussed below.

Value system

The value system of the founders and those at the helm of affairs has important bearing on the
choice of business, the mission and the objectives of the organization, business policies and
practices.

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Mission and vision and objectives

Vision means the ability to think about the future with imagination and wisdom. Vision is an
important factor in achieving the objectives of the organization. The mission is the medium
through which the objectives are achieved.

Management structure and nature

The structure of the organization also influences the business decisions. The organizational
structure like the composition of board of directors, influences the decisions of business as they
are internal factors.

Human resource

The human resource is the important factor for any organization as it contributes to the strength
and weakness of any organization. the human resource in any organization must have
characteristics like skills, quality, high morale, commitment towards the work, attitude, etc. The
involvement and initiative of the people in an organization at different levels may vary from
organization to organization. The organizational culture and overall environment have bearing on
them.

Company image and brand equity

The image of the company in the outside market has the impact on the internal environment of
the company. It helps in raising the finance, making joint ventures, other alliances, expansions
and acquisitions, entering sale and purchase contracts, launching new products, etc. Brand equity
also helps the company in same way.

Physical asset & Facilities

facilities like production capacity, technology are among the factors which influences the
competitiveness of the firm. The proper working of the assets is indeed for free flow of working
of the company.

Marketing Resources

Resources like the organization for marketing, quality of the marketing men, brand equity and
distribution network have direct bearing on marketing efficiency of the company.

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Financial Factors

Factors like financial policies. financial positions and capital structure are also important internal
environment affecting business performances, strategies and decisions

Recommendations and Conclusion:

In this External Environment Analysis, we have given initially a brief introduction to the Coca
Cola Company. After that, a detailed analysis of its operations and products in the global market
is conducted. Various trends and hidden threats influencing the productivity and existence of Coca
Cola company could be identified by conducting this test and thus aid the company to attain its
goal. According to the observations of Fahad in 2013, since the company has still potent challenges
present in the international market, it has to devise new strategies, and policies to overcome the
obstruction and maintain its top position.

It has been observed in this External Environment Analysis that while carrying on its operation in
the global market the company had always placed the customer base on the top priority. Although
the preferences and palate of the customer change daily they the company follows the policy to
always value them. It was being understood and observed by the company that to sustain and be
successful in the market they have to deeply analyze and observe the taste and trends of the
Bangladesh society and hence bring new products that match the liking and requirement of the
demographic. Since there are a lot of cheap substitutes available in the market, there is a strong
chance of shifting the choice of product, if the requirements of the customers remained unfulfilled.
It has been observed that the customers of Bangladesh are not loyal to a certain brand for a long
period, so it is imperial that the management should keep analyzing the exterior factors to sustain
the top position in the market.

It could be concluded in this External Environment Analysis that the Coca Cola company has been
successful in maintaining its top position in the international market by keeping in watch the
factors like environmental pollution, introducing health-conscious drinks like Diet Coke and Light
Coke, maintaining excellent operational environment, etc. The growth of the Coca Cola Company
has been also induced by the growth rate of particular operative countries.

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