Value Chain Management

Discuss about the Customer and Demand for Coca-Cola Company.

Over the past decades, business management have transformed through various changes to have profound development such as business process re-engineering, tactical administration, lean thinking and supply chain management among others. A good number of businesses supply their products to numerous places in the world (de Rosario et al 2017, p.728). The process always entails a lot in order to offer the end user a better experience, thus needs strategic management; which is received through supply chain management. The paper examines the supply chain of Coca-Cola Company, exploring the strategies, processes, business units and supply chain partners to use to satisfy demand from the customers.

A supply chain management primarily refers to a cluster of self-regulating organizations that are combined together through the products and services that they independently or jointly add value to enlarge consumer’s experience (Davis 2017, p.310). The management of supply chain entails the process of planning to implement controlling operations for serving customers as efficiently as possible (Choudhary et al. 2018, p.48). The control of supply chain has become so crucial in today’s business because unlike in the old days that the process only entailed purchasing activities and cost reduction activities, the process today involves more due to globalization that has created stiff competition hence heightening customer’s expectation to win the war.

Therefore, the fights have shifted from organization to the organization to supply chain against supply chain (Gold,Kunz & Reiner 2017,p.250.). Meaning that survival of any business in today’s market majorly depends on the capability to collaborate within the supply chain, hence the primary reason why supply chain is critical to any business.  The significant conditions for the existence of supply chain include: the presence of more than one participating company, the participating company belong to different business ownership with lawful neutrality in between; the organizations are always interconnected on a common objective of adding value to the product through the supply chain. Finally, the each of the enterprise moves in as transmuted inputs and departs as the value-added outputs.  

Unlike the supply chain, the value chain management is an integrated model and cross-functional decision-making approach that enable organizations to use the contemporary capabilities and knowledge as one to develop the resources that are necessary for improving and delivering superior value to consumers (Lee, Song & Cheong 2018, pp.3). The term established by Michael Porter in 1985 analyses the activities of an organization performs and bonds them. The Porter’s Value Chain model entails activities that are used to create the value of the product and services by an organization.

Coca-Cola Company

The events are always categorized as either primary, secondary depending on whether they are the primary business or the auxiliary functions of the company (Fang et al. 2018, p.13). The primary aim of these accomplishments is to provide a customer a high level of value that has the extra cost of the events, thus developing in increased revenue collection by the company. The primary activities cover five major parts that are inward bound logistics, operations, outward bound logistics, sales and marketing of products and services. All of the principal activities are directly or indirectly connected to the other four main support activities that are procurement, technology development, human resource management, infrastructures.  

 The term margin refers to the organization’s profit margin that depends on the ability to connect both the primary and the support activities in the value chain: that means that the customer has the capability to pay more than the total amount of the cost of all the events on the value chain. As much as every company contains different value chains, there is a principle that is common in all of them, and these are:

1.    Focus on the customers and consumers
2.    Get the product right every time

III.    Create, share, realize and protect the value

1.   Guarantee operative logistics
2.    Guarantee adequate information and communications approach is in the place
3.    Assemble and uphold a productive relationship

Coca-Cola Company forms the leading beverage company, chief producer, supplier and marketer of non-alcoholic beverage in the world. The enterprise found real foundation was in 1886 when Dr. John Permberton began to generate Coca-Cola syrup for customers in fountain drinks hence, building of a strong relationship with each of the franchise (Siorick 2016, p.951). The Coca-Cola products are consumed in the world at a high rate more than 700 million timers per day in the world, and the figure continues to rise, as a result of the tremendous steps made in the past in creating awareness and availability of the products to customers. Among the used techniques to achieve the global image and consumption is the specialization of the Coke as a beverage and spread it throughout the world.

The company owns more than 500 soft drinks brands between the licensed and the one that holds such as water, carbonates, tea, coffee, Fanta, Sprite, regular and diet coke. All these products have found their availability to the consumer through the well-established supply and value chain of the company (Linnander et al. 2017). The Coca-Cola Company has numerous partners that help in bottling, marketing, distribution and selling of the products.

Coca-Cola Company supply chain has the most significant power since it is the syrup producer .The Coca-Cola Company is the chief producer of the concentrate, the brand property owner and does the global marketing (Tornhill 2016, p.529).The bottlers do the product and selling of the final products, buy the concentrate from the TCCC and does the trade marketing through the local external marketing. The company has about 275 bottles that are all under the franchise model.

Value Chain of Coca-Cola

Coca-Cola strong brands that account for billions of dollars across the world is as a result of the well-created value chain. The Coca-Cola bottling system is based on the division of functions with various bottlers that aim at optimizing the production, marketing, and distribution of the products across the world. (Haraburda 2017, p.674)Each bottler creates the demand in each of the territories through a process called “anchor bottlers” such as the Coca-Cola Amatil, Coca-Cola HBC, Coca-Cola Bottler Philippines among others initial development of the anchor bottles, Coca-Cola provided support to the anchor bottlers.

The Coca-Cola Company has an ample supply chain that consists of about ten thousands of farmers and suppliers. The are suppliers are associated as business partners as they are the source of the raw material that is used in the production. This is achieved through set guidelines and understanding between the company and the suppliers that bound them to a specific code of behaviors and regulations (Haraburda 2017, p.677). The company requires these suppliers to comply with the applicable laws and guidelines such as being responsible for the environment, workplace policies and regulations. These set of rules have enabled an excellent relationship that has allowed the company to continue receiving raw material from the suppliers throughout the years without being interrupted. As a result, the customers are also capable of getting the finished predicts without any shortage in the market.

The operation function of the company entails the development of the concentrate and the administrative duties at the headquarters. The company as much as it is an international organization, it operates at the local scale in every society that it has its business running (Malik & Singh 2018,311). However, the company does not own and control all of the bottling companies. The company mains aim is to produce the beverage base and syrups and then sell to the bottling companies that do mass production and distribution of the products across the world.

The outbound logistics of Coca-Cola value chain entails of the bottling companies and the distributors. The bottling companies manufacture, package, merchandise and distribute the product to every customer and the lending partners (van Dam 2011, p.8). The vending partners also later sell the products to the customers that are far away from the bottling destructors. Coca-Cola company customers include restaurants, street sellers, movie playhouse grocery stores, , entertainment parks among many others. Therefore, both the vendors enable to facilitate the Coca-Cola company mission and visions to customers.

Primary Activities

The marketing consist of the company, the company’s bottling partners, and the distributions. Coca-Cola enterprise offers a broad marketing scale through the already built brand name of coke and logo (William 2015, p.452). Through the utilization of the social media and other digital services, the enterprise organizes campaigns from time to time to update the knowledge of the potential customers on the existing brands, the new brands, price update and discounts offered. These campaigns are also supported by the bottlers and vendors decorating their shops and shelves in an attractive way to promote the name of the company. Through these strategies, the product is currently consumed in more than 200 countries in the world.

Coca-Cola company success has its base on the embracement on the technology, research, and developments. The company has advanced technology throughout the stages from the production to the sales (Anastasiadis & van Dam 2017, p.660). Additionally, the company has invested in technological advancement through RF&D. The company owns six RF&D centers around the globe that are linked to external technology and valuation institutions and research centers. This interconnection enables the advancement of the brands and development of new products, new ways of production that cuts the cost such as packaging machines. The company, to optimize its operating value, it has entered into a partnership with other various industries that do extensive technological research for its development. 

Coca-Cola production and sales start from the farmers and end at the suppliers. Across all these partners, the company creates a good relationship that enables it to gain trust from the farmers hence the constant supply of raw materials throughout the seasons, and also with the bottlers and vendors to ensure that all the produced products reach the customers at the correct time (Hafezlkotob & Ghezavati 2015, p.810). The relationship is maintained with a set of procurement guidelines signed by the stakeholders. Coca-Cola Company has developed a program known as Sustainability Guiding Principles (SAGP) the farmers that establish a proper framework for sustainable sourcing. Infrastructure plays a significant role in the success of an organization. Coca-Cola Company has an essential foundation that entails the management, human resource, technological support, supplier’s education and so many.

The human resource management in every organization is responsible for the development of the human capital. The human resource management at Coca-Cola has both advantages and disadvantages (Tornhill 2016, p.532). The significant drawback is that it is unable to form a global policy that will ensure all the partners and vendors follow as each is of its entity and operates under different culture and political environments. The recruitment process is done in two ways: the internal and the external recruitment.

Inbound Logistics

Coca-Cola enhances its value chain by providing training and development of employees to acquire adequate knowledge on products and services, to improve the customer experience (Siew et al.2016, p.684). In collaboration with numerous institutions and developing programs such as Coca-Cola University, a global institution, the company provides earning the opportunity to people at all levels such as personal and business. The knowledge gained to have a positive impact on the society. The company promotes the suppliers by purchasing directly from them, concerning the signed rules and regulations. Additionally, the company encourages the development of the community through buying raw materials from the minority community and women. 

Conclusion

The management of supply chain is critical to all business organizations because the process entails more due to globalization that has created stiff competition hence heightening customer’s expectation to win the war. A supply chain management primarily refers to a group of independent organizations that are joined together through the products and services that they separately or jointly add value to increase experience to the end user. Value chain management is an integrated model and cross-functional decision-making approach that enable organizations to use the contemporary capabilities and knowledge as one to develop the resources that are necessary for improving and delivering superior value to consumers.

Cocoa-cola is an international company has received its enormous success from the development of adequate supply and value chains. By considering every stakeholder as a business partner, the company is capable of increasing the experience of the customers. Therefore, Coca-Cola has optimized the entire primary and the support activities to gain the competitive advantage over other competitors. The events linked to the other four main support activities that are procurement, technology development, human resource management, infrastructures.  Utilizing all these activities in the value chain, Coca-Cola has managed to add value to the consumers’ experience. 

List of References

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Operations

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