Coca-Cola is the world’s leading carbonated drinks manufacturers; the company’s management has withstood hard economic times like the World War II and the Asian Financial Crisis. To remain competitive, the company’s management keeps changing its strategies, policies, and products to meet customers’ expectations and enhance efficiency.
When adopting new strategies and policies, the company engages the services of its change management team. Change management is a structured approach which aims at translating/shifting an organization, functional teams, or individuals from current/past state to a desired future state.
The process of change starts by systematic diagnosis of the situation to transform and gauging the capability to change; the process involves all stakeholders at different levels (Newman 12-78). This paper examines the various changes that have occurred at Coca-Cola Corporation; it will further discuss the change management approach that the company has undertaken.
Coca-cola Corporation
Coca-cola was founded on 8th May, 1886 by a local pharmacists in Atlanta called John Pemberton,; initially Coca-cola, the product from the company, was sold as a drug to cure diseases like dyspepsia, morphine addiction, headache and impotence.
A year later, the drug was selling well in the market; Asa Griggs Candler noted the trend in the market and obtained a stake in the John Pemberton, invention. In 1887, Asa Griggs Candler advised that the production be done at a company level; jointly they incorporated a company and called it Coca-Cola.
To protect the formula, the company sort for legal rights and exclusive rights for the formula which was granted; since then the company has kept changing its business approached to remain competitive.
Over the years, people, systems, and environments have evolved; the only thing that has remained constant is change. Change is evident from the physical, environmental or situational attributes of the business environment.
It is enacted in either internal or external attributes of a business. Changes that have occurred at Coca-Cola can be classified products change, process change, internal structure, and processes changes and changes in markets (Coca-Cola Official Website).
The firm status before taking a decision of change
The status of Coca-Cola before a change varies with the condition of the market then; the main trigger of change at Coca-Cola has been the forces of the market and legislations that have likely affected the business. The business environment is challenged by competitors like Pepsi and other international carbonated beverages companies.
Trigger event that had forced this firm to feel the need for change
After the invention made by John Pemberton, Coca-Cola has been on the forefront coming up with products that fit the market effectively and beat its rivals. In 1961, the company was facing fiancé competition from a brand by Pepsi called 7 Up and decided to develop a product that specifically addressed the competition; they came up with Sprite.
With the product performing well in the competitive environment, the company in 1974 rebranded the brand to Sugar Free Sprite” in 1974, then was renamed to “Diet Sprite” in 1983, the rebranding was in the effort of creating more customer satisfaction and creating the impression that the product is superior than the original one.
In 2008, the company introduced a different taste of Sprite and named it as Sprite Green, the product was sweetened with Truvia in the effort of improving customer satisfaction.
The new changes and brand improvements that have been made at Sprite is an indication of how the company uses change to develop and improve quality of its products. the diagram below shows a packaging for Sprite:
In the year 1985, Coca-Cola was facing fiancé and aggressive competition from its rival Pepsi; the then management decided to reformulate its popular carbonated drink to suit their consumers. The decision that was arrived at is making of a sweeter soda which was named as new Coke.
Surprisingly even after the invention, the products was a market failure and the company had no option than revert back to its original product. With the revert to the older version, the management was determined to change and make the product look superior than the original product, they named the product as Coca-Cola Classic although it was the same product they had packaged earlier (Sadler and James 56-123).
The move of 1985, by the company to change and invent another products to fight its competition rhythms with the need for change; change is enacted to improve an organization’s competitiveness and improve its internal process.
The failure of the company’s change was an eye opener to the management on the quality and loyalty that its customers had with the products.
In a manner likely to boost consumers’ satisfaction, the management rebranded the consumer preferred products to Coca-Cola Classic, the rebranding was aimed at creating an impression that the product was superior to the other one. This was a psychological approach to customers through a change process.
In the year 2005, the United States was concerned about their population health situation; there was much advocacy on the kind of foods and drinks the people were eating.
Coca-Cola management realized the campaigns and the effects they had in the carbonated drinks markets and invented the Diet Coke and Coca-Cola Zero brands. The diagram below shows a diet coke parked in canes and also Coca-Cola Zero brands:
The brands were manufactured in a more special manner to enhance their quality and reduce any risk on human health and fitness. The move to Diet Coke and Coca-Cola Zero is seen as a responsive approach to changes affecting the industry; it came at the time that campaigners of good health and fitness were advocating for avoiding taking such carbonated products.
The attempt can be seen as a strategic management approach where the company sort to respond to changes in the market and devised products that were responding to the needs of its customers (Coca-Cola Official Website).
Main purpose of change
Change within Coca-Cola is triggered by either internal processes, regulatory sources, or the dimensions of the market. Generally the main reason why organizations need to change is to create better systems and procedures of its internal and external environment.
Change is aimed at improving current position of an organization to another better situation with the need or aim of taking advantage of opportunities offered by the market and mitigating any risks and threats as a result.
At Coca-Cola the following are the main purposes that change that has occurred has been done for:
- Change in technology being utilized; under the method, the company aims at adopting a technology level that is most efficient within the industry. When efficiency is maintained, then management is able to manage processes for quality, affordability, and cost management.
- Change in tastes and expectation of consumers, consumers are the backbone of an organization; to attain, maintain, and develop customer loyalty, the company keeps changing its products tastes.
- Changes to face competition; the carbonated soft drinks industry is highly competitive, to ensure that Coca-Cola remain competitive, the management has to keep coming up with formulae’s, and strategies to address the competition
- Changes in supply chain and distribution chains; when the world changes in the methods and systems to provide goods across different areas, the management has to align with the new methods for better approach.
Changes of legislation by the government and modifications in the economy whether locally or internationally; Coca Cola operates in more than 200 countries, with such a base the management has the role of responding to changes in both local and international markets (Kalmar 45).
Change implementation process
The success of change program is dependent on how well it has been implemented; implementation starts with the change planning and enactment of methods that will facilitate fast adjustment of stakeholders likely to be affected by the change.
Personnel attitude towards change determines the degree at which the change process will be effective; the following process is followed when implementing change at Coca- Cola:
- Planning change
Coca-Cola’s leaders who are mostly the change agents recognize the need for change, they analysis the prevailing condition in the industry to get the areas that need to be improved.
The need for a change is triggered by the need to move from current state to another better state; internal and external audit are conducted to ensure that current position in market is recognized. For example when faced with fiancé competition, the management analysis the situation to see the best method it can adopt to fight back the competition.
- Pilot study and management sensitisation
After current states that need to be changed has been recognized; the change agents discusses their findings and recommendations with the top management. The exercise is important since it improves the management understanding of the change.
The nature of the change to be adopted by Coca-Cola determines the kind of pilot study they will undertake. For example when the company has settled to develop new product, it tests them in the market to get the response of the people. It is through the response that it works and controls the change.
When changing risk areas should be established to ensure that mitigation measures have been established; some risks associated with change include staff resistance, and poor decisions by the change agents.
- Staff sensitization and involvement
The success of change process is determined by the degree at which human resources operating in an organization will adopt. From planning stage, the management should involve their subordinates and consider their inputs in the process. Initially employees are likely to have a number of questions regarding the change and how will be affected by the change.
Change agents should be well versed with the expected change results and the effects it is likely to have on employees; explanations sort by employees should be offered effectively and timely. In case some employees have some recommendations to the change, their views should not be locked out but should be included in the change process as long as they will not contradict the objectives targeted by the change.
When adopting change, Coca-Cola management understands that it’s a tension period thus they keep affirming to their employees that they are part and parcel of the change process and the process should not be implemented on them rather they should be fully involved in the change process.
Consolidating change
The last stage of change implementation is consolidation of the change; this stage is only done when all things are set to go and attitude of employees towards the perceived change is positive. In the event there are some issues that can be handled before implementation, Coca-Cola management addresses them in good time.
Before switching the old strategy of doing things, the new strategy and the old one should be run concurrently to test the new strategy. During testing, employees interact with both system and appreciate the differences and superiority of the new system.
Change management involves the numerous and continuous processes that management will be engaging in to ensure that the implemented change has been maintained and offer room for future changes. The method involves analysis situations occasionally and ensuring any differences on expectations have been addressed accordingly (Hiatt and Creasey 45-78).
The obstacles that firm might encounter and how it had overcome them
When undertaking a change, there are numerous challenges and obstacles that organizations face; at Coca-Cola the main challenges are staff resistance, diverse market, and organizational culture. When adopting internal process changes, the human resources of the company sometime repel or take some time before they adopt the change fully.
Personnel resistance to change is brought about by the power of inertia; this is the tendency that people have to stick to their usual way of operation and feel not willing to change their system of doing things.
Coca-Cola operates in more than 200 countries; all these countries have customers with different needs, expectations, and attitude towards the company’s products. When a change has been implemented, it is likely not to go well with all stakeholders and customers it will affect.
International customers are likely to repel a certain change that domestic customers have accepted. When such occurrences take place, then the company is challenged on the way forward as every change need to be supported by reliable market base for it to be economical.
Although Coca-Cola has an organizational culture that supports change, there are some instances that the culture affects it negatively. Where people are working together, there are always some opinion leaders whom in the event they are not okay with the decisions of change, they are likely to influence the entire team to repel change.
The best strategy to overcome change resistance at Coca-Cola is adopting and adhering to effective change management strategy. When adopting change, the management engages the service of consultants, market researchers, and other professionals related to the area of change.
By so doing both internal and external resistances/challenges to change are addressed effectively before the change has been fully implemented. So far the method has been successful and when failed the management was quick to act and change the process (Hayes 23-45).
The ultimate outcome of changes made at Coca-Cola
The changes that have been implemented at Coca-Cola Corporation have made the company maintain competitiveness in the industry.
The company has been successful for over 125 years despite hard economic times like the world war 1 , the World War 2, the Great Depression and recent Global Financial crisis. The success has been attained because of effective changes enacted by the management.
According to the company’s website, the company has about 500 brands that are served in over 200 countries; every day the company serves about 1.6 billion servings.
The improved product quality has created an impressive business for the company to qualify to be part of DJIA, theRussell 1000 Index, S&P 500 Index, and the Russell 1000 Growth Stock Index. To its investors and shareholders, the company has been able for pay dividends in the last 49 years consequently (Coca-Cola Official Website).
Works Cited
Coca-Cola Official Website. Coca-Cola Corporation. Coca-Cola Corporation, 2011. Web.
Hayes, Johns. The Theory and practice of Change Management. New York: Palgrave Macmillan, 2010. Print.
Hiatt, Jeff, and Creasey Timothy. Change management: the people side of change. Colorado: Prosci, 2003. Print.
Kalmar, Anthony. Human Resource Management, A Strategic Approach. South-Western, Thomson Learning, 2002. Print.
Newman, Janet. Modernising Governance. Belmont: SAGE Publications, 2001. Print.
Sadler, Philip, and James Craig. Strategic management. London: Kogan Page Publishers, 2003. Print.