Understanding Organizations: Group Assignment on Organization

Effectiveness

 Coca-Cola, US based beverage company was founded in May, 1886 by

Atlanta pharmacist, Dr. John S. Pemberton. In just two years it become the
world’s No. 1-selling sparkling beverage.
 Did you know? The first servings of Coca-Cola were sold for 5 cents per
glass. During the first year, sales averaged a modest nine servings per day
in Atlanta. Today, the daily servings are estimated at 1.9 billion globally.
 Revenue: US$ 41.863 billion (2016).

To Create Value and Make a

To Inspire Moments of Happiness
Difference
 You don’t get to be 126 years old and the world’s most-
valuable brand without making some major changes along
the way.
Over the years, Coca-Cola faced a number of challenges

• Nine years after its launch, Frank Robinson realized they

Target were advertising to the few when we ought to advertise to
Customers the masses.”
• New Slogan: “Drink Coca-Cola. Delicious and refreshing.”

• No uniformity in how the product looked as there were many different

The bottle bottle designs.
challenge. • Coca-Cola held a contest to design a bottle and the winner produced
the world’s most-famous package designs, the contour bottle.

• Coca-Cola’s market share slowly eroded.

The Pepsi • It took 16 years for Coke to respond to the Pepsi challenge by
challenge introducing larger-size bottles and another five years before
introducing a 12-oz. can, today’s dominant cola package.

• Diet-Rite cola hit the market.

• But this time, Coca-Cola reacted quickly. The following year, the
The diet company launched Tab.
challenge • Eighteen years later, the year Coca-Cola introduced Diet Coke.
• why would Coca-Cola introduce Diet Coke when it already had the
leading diet-cola brand? As it turned out, Diet Coke could be one of
its best-ever decisions.
 Restructuring
 Since the environment is unstable and complex , restructure
decision taken in April 2017.
Reasons for Restructuring:
 During 2016-17, sales in volume remained muted.
 Though there was growth of 3% in April – June, In India, in July-
September 2016 quarter, Coca-Cola reported a 4% year on
year decline in unit case volume growth due to slowing
discretionary spends in rural areas and stiff competition from
healthier and functional beverages in urban areas.( October-
December firm did not relieve data in India).
 Declining sales reflected in financial results.
 Operational Strategy for Restructuring:

 Cost cutting by selling back its bottling and distribution

operations to independent bottlers. (Low cost Leadership)
 Plans to cut about 20% of it corporate workforce due to
failing demand for its sugary drinks.
Upcoming Strategies:
 Separate division for niche and premium beverages- smart
water, frozen fruit deserts, mixers and tonic water, etc.
 Amalgamating the existing Alternate Beverages Division to
the mainstream distribution system.
 Expansion from 5 zones to 7 zones to focus on sales and
supply chain.
 Impact
 Due to restructuring strategy, company expected drop in profits in
2017 but in second quarter the revenue was $9.702 billion
compared with forecast of $9.652 billion.
 Cost cutting strategy was also meant for increase in saving and
it’s expecting to save $3.8 billion by 2019.
 One million new outlets by 2020 in India.

Submitted by Group number 14:

1. Priyanka Kadam P38037
2. Pushpanjali Gupta P38038
3. Sneha Skaria P38050