Executive Summary
The Coca Cola HBC implements a strategic marketing plan to keep its current lead in the European non-alcoholic beverage market segment. The research centers o the strategic operations of Coca-Cola HBC. The company’s operations management enables CCHBC to reach its prescribed targets. MIS helps CCHBC achieve its availability benchmarks. CCHBC’s acceptability factor demands to create effective customer service. Indeed, Coca Cola HBC’s synergy with its supply chain partners contributes to its successful strategic marketing partners. The recommendations include continuing its current marketing strategy, retaining its strong supply synergy, and enhancing CCHBC inter-department cooperation.
Introduction
The Coca-Cola HBC focuses on executing a marketing plan to keep its current lead in the European non-alcoholic beverage market segment. The research focuses on the strategic operations of CCHBC. The research delves into the relationship between CCHBC and its suppliers. The study concerns CCHBC’s acceptability factor demands. Coca Cola HBC’s successful strategic marketing and is grounded on its synergy with its supply chain partners.
The CCHBC Company implements strategic operations management policies to achieve its prescribed strategic aims. The company sets into motion its credos to retain the CCHBC clients’ high demand for Coke products. One of the operational practices includes maximizing its supply chain network. This is the company’s first credo. The company ensures the availability of its products at the right time and in the right place. The ensure availability, the company sells its products in some groceries and other food display outlets that stay open 7 days a week. Some stores sell coke products 24 hours a day. A supply chain is the set of interconnected relationships between all parties that supply the inputs and receive outputs from the entire coke distribution system within the European market segment. The supply chain network includes the tiers of suppliers, transport companies, and customers. Other supply chain parties include the CCHBC production department, CCHBC marketing department, CCHBC management, CCHBC accounting department, CCCBC board of directors, and CCHBC employees. With its supply network working smoothly, the clients do not have to exert extra effort to grab another bottle of coke beverage. Currently, the CCHBC enterprise sells its products in Tesco Plc and other sales outlets. The use of information technology helps management determine the current position of its inventories within the supply chain network (Hartline 2011).
The CCHBC Company places importance to implement a responsive supply chain. The supply chain includes all individuals or parties contributing to the financial success or financial failure of the company. A viable supply chain has the required flexibility to adapt to the ever-changing business environment. For example, the company must effectively react to delays caused by unexpected calamities, such as hurricanes. Management must effectively counter any unfavorable effect caused by unexpected traffic jams. Likewise, the store can contact the transport companies to determine the current location of the coke products. CCHBC requests the nearest Coke warehouse to make scheduled coke deliveries.
Further, the company implements its second credo, affordability. The company prices its CCHBC products at affordable levels. The company prices its products higher within the rich market segment. On the other hand, the company sells most of the CCHBC products at prices similar to the products of the competitors. The CCHBC Company also sells its products at higher prices during special occasions. During special occasions, there is a higher demand for CCHBC products. Consequently, some stores sell their CCHBC products at slightly higher prices to fill the CCHBC needs of rich clients. The company lets the affordable products reach the current as well as future CCHBC clients on time.
Also, the company implements its third credo, acceptability. To ensure acceptability, the company implements the Total Quality Management (TQM) concept. Previously, the company focused on successful quality inspection; the quality assurance inspector checks and approves the quality of the production workers’ outputs. Next, the company established quality control; a quality manual is used a benchmark in the production output inspection. Further, the company implemented the quality assurance approach; management’s aim is to prevent irritating quality issues from cropping up. Currently, the company implements the Total Quality Management concept; TQM focuses on exceeding the customers’ quality point of view. TQM embarks on a never-ending business journey to meet the ever-changing quality needs of the current and prospective clients. Specifically, TQM includes the implementation of the Japanese Kaizen quality management system.
The company’s TQM includes enhancing its current service quality. Coke’s service quality includes ensuring reliability and responsiveness to client demands. Service quality includes the competent production of quality coke products. Service quality includes constant knowledge communication among the supply network parties, especially coke clients. Service quality includes ensuring delivery of the coke products o time. Service quality affects the current and prospective clients’ demand for the coke products. The company’s aim is to manufacture coke products that cater to the ever-changing coke clients’ needs and wants (Drury 2006).
Specifically, the CCHBC Company’s operational management strategy includes the use of information technology to achieve its strategic aims. Coke implements the use of the SAP-based advanced planning optimizer during 16 supply chain strategic processes. SAP is one type of information technology tool. CCHBC used the optimizer to deliver successfully the CCHBC products to clients within seven European Union states. Information technology spelled the difference in management’s successful optimization and coordination of its entire CCHBC product markets. Optimization helps in supplying large cities with coke products.
With the use of information technology, the company embarked on an excellent consensus plan. Information technology hastened and simplified the managers’ forecasting activities. Information technology used historical supply chain records to recommend immediate action. Immediate action is necessary to avoid clients visiting empty store shelves. Further, management implements the power of data mining tools and other scientific tools to ensure a steady supply of CCHBC products on the store shelves.
CCHBC approaches its capacity management (including planning and control) excellently. The company’s capacity management policy focuses on satisfying the current and future demand for Coke products and services. The company successfully matches the current and future demand for Coke products by producing and supplying more than enough coke products. CCHBC sells its coke products in the groceries and other store outlets. The company can implement the maximum level of value-added activity over several times.
CCHBC’s successful capacity management incorporates several factors. First, the current production process is sophisticated. Second, there is more than enough labor producing the optimum coke quantities. Third, the company stores more than enough coke inventories in the groceries and other sales outlets. Lastly, the company lets the production workers work overtime to ensure a steady supply of the coke products reach the store shelves before the shelves are empty. CCHBC purchases the minimum amount of raw materials to produce the required quantity of coke products demanded. Often, the discriminating current and prospective clients have seasonal coke product demands. This includes focusing on the seasonal demands for the coke products. CCHBC belongs to the beverage and beer seasonal products market. An increase in the demand for coke products occurs during birthdays, marriages, deaths, Christmas, and other special occasions. Management must ensure that the production facilities meet established product quantity benchmarks.
One of the secrets of Coke’s successful capacity management is forecasting. The company uses historical sales and production records as a basis for forecasting the future coke demand. Forecasting is the act of predicting likely future levels of demand for the company’s products and services. CCHBC must forecast the clients’ future demand effectively and efficiently. CCHBC must produce products in compliance with forecasted levels to ensure lessen warehousing costs. Coke’s forecasting method focuses on both the quantity and quality of the coke product. In terms of quantity forecasting, the company uses the cause and effect method. The company can produce more than enough coke quantities (effect) to supply the unexpected increases in the clients’ demands (cause). Likewise, the company uses the time series forecasting method. The method entails using past revenues, demands, and deliveries as a basis for forecasting future demands. The company can profitably use surveys as a basis for determining the changing demands of the current and prospective clients of the coke products.
Besides, capacity management focuses on determining the most appropriate way to maximize the company’s production capacity over a long period. Increasing production capacity is pegged on the current and prospective clients’ demand increases. Consequently, CCHBC management focuses on maximizing the supply chain capacity to fill the needs, wants, or demands of the current and prospective clients. Efficient management must prioritize removing hurdles to the speedy delivery of the CCHBC products to the stores and other display centers. Besides, CCHBC must analyze the current demand for its products. Besides, CCHBC must study the current demand for the competitors’ products (Arnon 2009). A study of the demand for the competitors’ products helps management ensure its current spot in the European non-beverage markets.
It would be disastrous for management to produce unsalable CCHBC products. Unsalable goods occur because the company did not use surveys or feasibility studies. The survey feasibility studies persuade management to increase or decrease the future production of Coke products. For example, manufacturing CCHBC products twice the amount of client demand would normally result in unsold products. Unsold products will result in a decline in the demand for the next accounting period’s CCHBC deliveries. Capacity maximization includes the retrenchment of redundant employees. Retrenchment occurs because of the decline in the demand for the company’s CCHBC products. Due to the decline in the demand for the CCHBC products, the CCHBC warehouse has to store the overproduced and undelivered factory outputs in the CCHBC warehouses. The CCHBC products expire with time. Thus, excessive CCHBC production will translate to excessive warehouse costs and other avoidable costs and expenses. Producing CCHBC products above demand equates to unfavorable management decisions.
The overproduction of CCHBC products has its advantages and disadvantages. Overproduction will ensure a steady supply of CCHBC products. The company must increase its production to meet unexpected customer demand increases. Reduction in the production output may result to empty store shelves. Empty store shelves occur when there is sudden and unexpected demand for the CCHBC products. Such incidents occur during birthdays, marriages, baptisms, deaths, graduation, salary day, when gets a salary raise, and other special occasions. CCHBC must include such unexpected situations in forecasting future CCHBC product demands.
In terms of CCHBS’s capacity management approach, the manager has different roles to implement successfully. The managers who are engaged in the capacity management process must work independently to achieve departmental or division targets. However, the managers or leaders of the company’s different departments must work in synergy. Synergy entails the coordination of the managers or officers of the different departments of CCHBC. The managers include the forecasting managers, production managers, warehouse managers, research and development managers, and marketing managers. Besides, the officers of CCHBC Company include the Chief Financial Officer, and Chief Executive Officer, President, Vice President, and Chairman. These officers and managers must cooperate to ensure a combined effort to achieve CCHB’s organizational goals and objectives. Cooperation will surely lessen the time needed to reach established monthly production and marketing targets.
Specifically, the planning management activity starts with the forecasting manager’s move. The forecasting manager incorporates the historical data to generate a better forecast of future demand for the CCHBC products. Next, the forecasting manager will seek the cooperation of the stores in the preparation of next month’s delivery schedule. The delivery schedule includes the forecasted volume of CCHBC products delivery. The forecasting manager cannot force the stores to accept more than what the stores can sell in their stores. To resolve this issue, Coke and other companies often enter into consignment sales contracts. Under the consignment sales contract, the stores pay for sold products. The stores are not liable to pay for the unsold CCHBC products displayed in the stores. Likewise, the stores can request CCHBC to retrieve all expired CCHBC products from the store shelves without paying a single British pound. The consignment sales arrangement will increase coke sales. On the side of the store, they do not lose anything (Abele 2008).
Consequently, the forecasting manager cooperates with the CCHBC production manager. In turn, the production manager cooperates with the forecasting manager to achieve the company’s overall sales targets. The forecasting manager needs the cooperation of the commercial manager. The commercial manager helps the forecasting manager achieve monthly sales targets. In the SNOP meeting, the chief executive officer, the SCM manager, and the commercial manager incorporate data mining and other scientific methods to achieve organizational targets. CCHBC management accepts the inputs from all interested parties. During the analysis, the group generates a compulsory consensus. The consensus includes the agreed strategic management plan and strategic marketing strategy. All parties are encouraged to comply with the chosen consensus. Chosen by the group, the elected sales targets must be compatible with the SCM Manager’s production capacity benchmarks. Likewise, the elected targets must meet the CFO’s profitability benchmarks. Also, the chosen strategic management plan must coincide with the Commercial Manager’s sales quota (Czinkota 2007).
CCHBC has faced its most significant challenges in complying with its current capacity management policy. One of the challenges is reducing production expenses to allowable levels. The company’s total quality management process successfully reduced production waste and spoilage to allowable levels. Also, CCHBC management reduced transportation costs to minimum levels. To accomplish such levels, Management reduced warehouse costs by producing just enough products to meet the clients’ demands. Products stored in the CCHBC warehouses generate expenses. Warehouses need electricity. The warehouses need personnel to watch and monitor the warehouse inventories. The Coke warehouse stocks are in danger of spoilage due to time expiration (Lhager, J., Rudgerg, M., Wkner, J. 1999). Products stored in the CCHBC warehouses generate expenses. Warehouses need electricity. The warehouses need personnel to watch and monitor the warehouse inventories. Also, management reduces transportation costs to minimum levels.
Another challenge is to increase the revenue of its current European market segment. To accomplish the objective, CCHBC management continuously assures maximized delivery of the CCHBC products to the European Union stores. Until today, CCHBC continues to coordinate successfully the CCHBC deliveries. The deliveries supply the additional needs of the company’s current and prospective customers. Coke management expertly times the CCHBC deliveries to reach the store shelves long before the store shelf inventories run out. The company contacts the best transport organizations to deliver CCHBC products. The deliveries help CCHBC retain its current leadership in the European non-alcoholic beverages market. To accomplish such a feat, management increases its current volume of communication among the supply chain parties. Increased communication enhances the interested parties’ supply chain performances.
The nature of the relationship between CCHBC and its suppliers is cooperation. Cooperation includes maximizing knowledge management. Cooperation includes understanding. Knowledge management is necessary to remain a competitive advantage. Consequently, Coke’s management must efficiently and effectively create, locate, capture, and share their organization’s knowledge and expertise with the suppliers. Knowledge management is the scientifically rigorous approach to the management of shareable experiences, concepts, and values, intending to enable the creation, organization, diffusion, and use of knowledge. Coke uses knowledge management to keep abreast of or stay ahead of the CCHBC competitors in the European beverage market. Coke continuously assesses its current knowledge with the competitors’ knowledge. CCHBC implements knowledge management by implementing the cooperation and trust among the supply chain parties. CCHBC manages its supplier relationships in order to achieve organization goals and objectives (Hugos 2011). CCHBC needs the suppliers’ cooperation (Weele 2005).
Management information (MIS) significantly helps CCHBC monitor the achievement of its “A for availability” credo. MIS offers accurate, timely, consistent, feasible, and competitive information. MIS adds value, reduces production, marketing, and other costs, manages risks, and aids in creating new products or markets. MIS captures the appropriate information, provides the gathered information to the appropriate people. The information enhances their decision-making activities. MIS incorporates speed and accuracy in gathering, processing, distributing, and implementing relevant information. The information system is an organized combination of hardware, communication networks, software, people, and data sources. Cokes’ MIS enhances its current business processes and operations. Coke’s MIS enhances the decision-making activities of the employees and managers. MIS enhances Coke’s business strategies. The enhancement precipitates a major competitive advantage in the European beverage market.
As proof, Coke uses MIS to generate information in terms of performing and recording business transactions, production updates, sales outputs, supply chain deliveries, work hours in the production and marketing departments, and current inventory locations within the European Union beverage market. With the click of the mouse button, the authorized Coke personnel can determine the current coke inventories of any European Union store to determine the current coke inventory. With the click of the mouse, the marketing department can determine how many remaining coke products CCHBC will sell to meet the entity’s monthly sales quota. With the computer, the accounting department can speedily calculate the amount CCHBC must pay in terms of interest on loans. Coke can borrow enough money to set up a new Coke production facility in Europe. Coke’s MIS helps in determining the best internally chosen person for the vacant supervisor job. Lastly, Coke’s MIS is instrumental in gathering fast and accurate data in terms of changing client demands in any European city. Coke’s MIS truly holds accurate, accessible, and intelligible data at any time of the day or night.
Specifically, Coke’s MIS department helps in coordinating all the databases of all the CCHBC departments. Coordination creates a synergy advantage. Management uses the retrieved database to make faster and better solutions to the CCHBC supply chain network (Worldbank 2011). Each CCHBC department has a unique database. Information technology aids management to determine the current inventory count. The count includes indicators of the low, high, average inventory counts. Further, management information systems can identify the most profitable supply chain processes (Yasuhiko 2006).
Data mining and related research tools can enable CCHBC to analyze performances in terms of effective customer service (Acceptability). CCHBC’s acceptability factors guarantee that CCHBC products are acceptable. The factors include a good understanding of consumer needs, outstanding efficiency, effective customer service, product quality, and the best route-to-route market.
Data mining focuses on analyzing data to find patterns or relationships with such data. CCHBC can take full advantage of data mining and other research tools to increase its effective customer service. As data is more available at a faster speed, management can learn the changing demands of the company’s current and prospective clients earlier compared to the absence of data mining and other information technology tools. Likewise, data mining is useful in determining the competitor’s current product lines, marketing strategies, and supply chain information. The fast and accurate data gathered using data mining and other research tools is instrumental for CCHBC to move quickly and simultaneously to counter the competitor’s encroachment into CCHB’s sales territory. The use of RFID on the Coke delivery vehicles will aid the appropriate CCHBC personnel or management to locate the current location of its delivery vehicles. Consequently, Coke’s head office officer can communicate with the nearest coke delivery vehicle to transfer its coke products to another European coke store. RFID technology helps CCHBC fill unexpected empty coke shelves. The RFID technology is one example of Coke’s effective customer service (availability) strategy.
Management gears CCHBC’s acceptability factor towards effective customer service. The organization gathers relevant information to enhance the company’s transaction processing system (Baran 2007). Management bases the enhancement of stored data using data mining to monitor warehouse inventories. For example, European stores often get their coke product deliveries from the nearest Coke warehouse.
Consequently, Knowledge, not information, is important. Beynon-Davies defined Information as data inferring an increment of knowledge. According to Beynon-Davis, data is only facts. Facts include one or more symbols that an entity uses to represent something. Information is interpreted data. Knowledge precipitates from information by combining information with existing knowledge. (Beynon-Davies 2002)
Beynon-Davies (2002) supports the idea of knowledge rather than information is more important to retain effective customer service. To CCHBC, a list of phone book names is information. According to him, additional knowledge increases the capability to perform a task. Two critical sources that enable effective business environment action are the Coke organization’s processes and its environment. CCHBC applies the consensus strategy to set up a strong knowledge-based. The company’s internal information systems aid in the improvement of client service.
Conclusion
Based on the above discussion, Coca-Cola HBC executes its marketing plan to keep its current lead in the European non-alcoholic beverage market segment. Management founded the strategic operation of Coca Cola HBC on a strong supply chain synergy. Surveys, feasibility studies, and forecasts are important factors in CCHBC’s supply chain network. CCHBC has a strong supplier relationship. CCHBC’s acceptability factor demands are very financially impressive. Indeed, Coca Cola HBC’s synergy with its supply chain partners contributes to its successful strategic marketing.
Coke must implement recommendations. First, CCHBC must continue its current marketing strategy using data mining and other management information system tools. CCHBC must retain its current supply chain network’s capacity to ensure a steady supply of Coke products on the European store shelves. CCHBC must enhance its inter-department communication to ensure cooperation within the ranks of CCBC. Lastly, CCHBC should regularly conduct surveys and feasibility studies to generate fresh information needed to enhance Coke’s management’s decision-making activities.
Reflective Team effort
The group successfully incorporated the different theories into the CCHBC case study. The group scrutinized and resolved the case using theories like supply chain network, MIS, TQM, Operations management, knowledge management, and credos. The first meeting focused on dividing the workload among the five enthusiastic members (4 females and 1male).
The group members brainstorm to arrange our ideas in solving the case questions. The second meeting focused on resolving common problems that include incomplete preparation for the meeting, missing persons, and missing answers four members attended. The third meeting indicated three of five members attended. All members were present during the fifth meeting.
The male member created the group’s Facebook page. When needed, the expected members actively posted their answers to the group’s Facebook account. Each member enthusiastically replied to queries by other group members. The person who has the answer automatically answers the questions. Sometimes one group member cannot avoid being absent from the meetings. Consequently, the excused absent group member is updated during the next meeting. The update is necessary to let the absent member understand the current group discussion.
When the group members decided that each person takes a question to work on, the process took one group member an estimated one week to choose. The reason is that one member read the case more than once. The group members discussed the distribution of the assignment. The questions were evenly distributed. The group members eagerly worked on their assigned tasks. The group members met a week later to discuss how to present the group report in a scholarly manner. The group decided whether to use outside material.
During the second meeting, the girl finally appeared. All other members of the group did their share to make the group report complete success. Each group member contributed hours researching the assigned teamwork issues.
Also, one brainstorming meeting took the excited group member four hours to finish. Consequently, the group members accomplished the group report. The group worked on the powerpoint presentation.
Next, the group set a third group meeting. Everyone edited the academic reference contributions to beef up the current PowerPoint presentation. The group members used the powerpoint presentation for determining there was a third meeting, to finish the PowerPoint presentation. The members of the group edited their part in the presentation according to their answers. The group members distributed the group assignments. The group members constantly posted their researches on the group’s blog site. When the group decided to implement a group activity, the activity included imposing a penalty. The group imposes the penalty is imposed on the group members who are evading their report contribution. The group members painstakingly gathered the relevant academic resources to complete the assignment on time.
The group member will show up during the scheduled visit schedule. The members of the group attended a meeting to thresh out any loopholes in the excellently prepared group assignment plan. Everyone did their best to attend important group meetings. Specifically, one member leaves her work to join the other energized members during the scheduled group meeting. All group members exerted the required efforts to accomplish the assignment when compared to the other group members’ efforts. All the group members eagerly joined in the group’s brainstorming and practice sessions. The research is very fulfilling because many of the group members gave their best during the practice or role-playing sessions.
Some of the fellow group members were early birds during the meetings. Everyone exerted efforts to avoid lateness during the meetings and practice sessions. One member dictates that this is the last group activity before the actual power. The group members openly show respect and confidence in the other group members. One group member puts lots of time into the success of the group report. The school and the members respect their time. Some of the group members do not show respect or cooperation to another group member. The group members go out of their way to lessen the time allocated to trivial matters. Trivial matters often cause delays that delay the accomplishment of the group report. The five group members successfully contributed their share to answer the five research questions effectively and efficiently. During the last meeting, the group members realized that four very important outputs precipitated from the group work. They are cooperation, perseverance, understanding, and hard work. The members were happy to contribute their part to the successful presentation of the group’s PowerPoint report.
References
Abele, E. (2008) Global Production: A Handbook for Strategy and Implementation. London, Springer Press.
Arnon, A. (2009) Perspectives on Keynesian Economics. London, Spring Press.
Baran, R. (2007) Principles of Customer Relationship Management. London, Cengage Press.
Beynon-Davies, P. (2008) Business Information System. London, Cengage Learning.
Czinkota, M. (2007) International Marketing. London, Cengage Press.
Drury, C. (2006) Cost and Management Accounting. London, Thompson Press.
Hartline, M. (2011) Marketing Strategy. London, Western Press.
Hugos, M. (2011) Essentials of Supply Chain Management. London, J Wiley & Sons Press.
Lhager, J., Rudgerg, M., Wkner, J. (1999) Long Term Capacity Management : Linking the Perspectives from Manufacturing Strategy and Sales and Operations Planning. London, ScienceDirect.
Weele, A. (2005) Purchasing & Supply Chain Management. London, Cengage Press.
Worldbank. (2011) Management Information System. London, Worldbank.
Yasuhiko, T. (2006) Foundations and Applications of MIS. London, Springer Press.