IBADAT International University Islamabad

Department of Management Sciences

Semester: BBA--I Course Title: Principles of Management

Time Allowed: Next Class Semester: Spring-2023
Total Marks: 10 Instructor’s Name: Munibah Munir

Assignment # 02

Instructions:

 Answer the following questions

Case Study:

The Coca-Cola Company (Coke) is in a league by itself. As the world’s largest and number
one non-alcoholic beverage company, Coke makes or licenses more than 3,500 drinks in
more than 200 countries. Coke has built 15 billion-dollar brands and also claims four of the
top five soft-drink brands (Coke, Diet Coke, Fanta, and Sprite). Although it fell to the
number-three spot in 2013, each year since 2001, global brand consulting firm Interbrand, in
conjunction with Bloomberg BusinessWeek, has identified Coke as the number-one best
global brand. Coke’s executives and managers are focusing on ambitious, long-term growth
for the company—doubling Coke’s business by 2020. A big part of achieving this goal is
building up its Simply Orange juice business into a powerful global juice brand. Decision
making is playing a crucial role as managers try to beat rival PepsiCo, which has a 40
percent market share in the not-from-concentrate juice category compared to Coke’s 28
percent share. And those managers aren’t leaving anything to chance in this hot—umm, cold
—pursuit! You’d think that making orange juice (OJ) would be relatively simple—pick,
squeeze, pour. While that would probably be the case in your own kitchen, in Coke’s case,
that glass of 100 percent OJ is possible only through “satellite imagery, complicated data
algorithms, and even a juice pipeline.” The purchasing director for Coke’s massive Florida
juice packaging facility says, “Mother Nature doesn’t like to be standardized.” Yet,
standardization is what it takes for Coke to make this work profitably. And producing a juice
beverage is far more complicated than bottling soda.
 Using what is calls its “Black Book model,” Coke wants to ensure that
customers have consistently fresh, tasty OJ 12 months a year despite a peak growing season
that’s only three months long. To help in this, Coke is relying on a “revenue analytic
consultant.” He says, “Orange juice is definitely one of the most complex applications of
business analytics.” To consistently deliver an optimal blend given the challenges of nature
requires some 1 quintillion (that’s 1 followed by 18 zeroes) decisions. There’s no secret
formula to Black Book, it’s simply an algorithm. It includes detailed data about the more than
600 different flavours that make up an orange and about customer preferences. This data is
correlated to a profile of each batch of raw juice. The algorithm then determines how to blend
batches to match a certain taste and consistency. At the juice bottling plant, “blend
technicians carry out Black Book instructions prior to bottling.” The weekly OJ recipe they
use is “tweaked” constantly. Black Book also includes data on external factors such as
weather patterns, crop yields, and other cost pressures. This is useful for Coke’s decision
makers as they ensure they’ll have enough supplies for at least 15 months. One Coke
executive says, “If we have a hurricane or freeze, we can quickly replan the business in 5 or
10 minutes just because we’ve mathematically modelled it.”

Questions:

1. Which decisions in this story could be considered unstructured problems? Structured

problems?
2. How does the Black Book help Coke’s managers and other employees in decision
making?
3. What does Coke’s big data have to do with its goals?