KING of Colas ------------The long and slow decline of the world's greatest brand

Coca-Cola is largest multinational beverage company and at the same time the world's number one producers and marketers of soft beverages drinks and the company with the most valuable and recognised brand globally. In 2014, global revenue was $46 billion, down 4% ($2 billion less) from 2012.It's not just Coke experiencing this issue,the entire soda market in US is admist this situation.The attention is on Coke because it is the leader of the sector. It may yet be decade before people start referring to Coke in the same way they do Kodak, and its terminal decline may not even happen at all. But if the company does not make a big strategic move soon, a massively mature market could be coming to an end.The company is structured on a global level with flexible adjustment features so as to comply with its regional markets sensitivity. The company produces syrups and concentrates which are being sold to the authorised bottling companies that have the mandate to produce, market and distribute products to the final consumers, this process is known and COCA-COLA SYSTEM. The external relationship with its bottling subordinates is one of the company's key strength, the Coca-Cola company work hand in hand with the bottling companies to ensure compliance with product requirements, quality and services.A multinational global organisation like the Coca-Cola Company has a flexible structure that not only focuses on product, marketing, distribution of finance but also profoundly encourages team work in each of their innovations and tries to incorporate people with different skill sets.

In every product development the company assemble an employee team of different specialities to analyse all the possibilities. In such teams, marketing specialists is expected to shed light on the result of his/her market research in regards to the new product, food technologies to clarify the changes and how feasible the new product is while the financial expert is to give report on the financial implications as regards to the new product. In the recent times,the Coca-Cola product was the traditional market leader in the cola category. They had achieved success through a strategy of outsourcing manufacturing and logistics to licensed bottlers, strong retailer relationships, and building a very strong brand.In its early years, Pepsi positioned itself as a discounter and sold its product for half the price of Coke in a larger bottle. This positioning had some impact with budget-conscious households and helped Pepsi become the “at-home” drink, while Coke remained the social drink. To reinforce their perceived higher product quality, one of Coke’s slogans was “it’s the real thing”.Because of this initial relative competitive position, Coke believed their product was superior and that they had an entitlement of being the market leader.Coke made their employees believe in their product.People at coke had to undertake the coke workshop where in people of all departments learnt how coke was made and finally believed that it was the real thing.The communication process was highly devloped through intranet ans social media employees of coke made the world believe that coke was the real thing and the King of beverages. Whereas Pepsi always saw themselves as the challenger and tended to be more aggressive in their marketing tactics .Aside from structure, an organisation is expected to have culture. An organisational culture describes the norms and values of the organisation in its dealings with both internal and external subordinates. The Coca-Cola Company also based its culture on enhancing and empowering its employee, this is so because the company consider employee as its most valuable asset.Motivated employee are often the engine drive in moving an organisation forward, the Coca-Cola Company often organise its employee into teams in carrying out there operations. This makes the employee feel valuable within the team by contributing different ideas on proposed operations at the same time by being innovative.

The company by this strategy creates a friendly and innovative culture, which made it possible for the company to depend on its workforce in maintaining it brand reputation globally. Furthermore, trust is being established as part of its culture. This is very important in every relationship, as regards to the Coca-Cola Company. Customers put their trust on the company to provide good quality product and high level of attention to customer’s needs, bottling subordinates trust the company to operate in the best interests of Coca-Cola System and so also the employee’s trust their voice will be heard and their various contributions are being valued.An open free communications is belief to be a means to sustain culture, based on that the Coca-Cola Company provide a good number of communication channels thus; monthly leadership team meetings and workers team brief sessions, departmental team meetings holding on weekly basis, each region have a consultative group with one European council representative and lastly, frequent surveys are being sent out to monitor employee’s complains or suggestions. The issue hitting coke again and again is beverage diet coke has now underperformed the category for six consecutive years, and volume has tumbled for eight years straight. Diet Coke, which for several years had surpassed Pepsi in volume, fell to third overall in the market last year. Market share dropped to 8.5% according to Beverage Digest, the lowest level since 1999.Coca-Cola Co said on Thursday its chief executive declined a $2.5 million bonus in 2014 while other top-level employees received lower-than-expected compensation as the world’s largest soda maker struggles to boost revenues amid sluggish demand for soft drinks.

While Chief Executive Officer Muhtar Kent’s total compensation, which includes salary, stock options and changes in pension value, rose 23 percent to $25.2 million from the previous year, he didn’t take an annual bonus because of “difficult but necessary decisions” taken to accelerate sales.Excluding a $7.1 million change in pension value, his actual remuneration was $18.1 million, down slightly from $18.2 million the previous year.Coke has struggled to increase sales as consumers in developed markets shift from soda to healthier options. Carbonated soft drink sales have been declining for nearly a decade in the United States, according to the trade publication Beverage Digest.Coke has diversified into faster-growing areas such as tea and energy drinks and announced cost-cutting plans at the end of 2014 to eliminate 1,600 to 1,800 positions as it aims to save $3 billion by 2019.“While we saw a number of positives in 2014, the company’s performance was not up to our high expectations,” Coke’s board said in a letter to shareholders on Thursday. “This performance is directly reflected in compensation decisions and how prior awards pay out.”

Q1. Do you think coke will maintain brand equity following the raod map of 2020. You are the HR manager responsible for the Coke brand and overall organizational success. Follow the OB model to drive organisation excellence by maintaining a balance between profit & people.