TITLE : MANAGEMENT REPORT

TOPIC : COCA COLA BEVERAGES PAKISTAN LTD.

PREPARED BY : TAHA KHAN & MANOJ KUMAR

IDs: SP-10-MB-0236 & SP-10-MB-0098Respectively.

DATE OF SUBMISSION : 26-04-2010

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TABLE OF CONTENTS

1 Acknowledgement…………………………………………………………………...3

2 Executive Summary………………………………………………………………….4

3 History of Coca Cola………………………………………………………...............5

4 History of Coca Cola in Pakistan……………………………………………………6

5 Introduction………………………………………………………………………….7

6 Organizational Culture of Coca Cola………………………………………………..8

7 The Views of Management in Coca Cola…………………………………................9

8 Environments in Coca Cola………………………………………………...............10

9 Decision Making in Coca Cola……………………………………………………..13

10 Concepts of Planning in Coca Cola………………………………………………...14

11 Mission Statement of Coca Cola…………………………………………...............15

12 Goals of Coca Cola………………………………………………………................16

13 S.W.O.T Analysis…………………………………………………………………..17

14 Organizational Structure of Coca Cola……………………………………..............21

15 Departmentalization in Coca Cola………………………………………………….22

16 Leadership in Coca Cola……………………………………………………………25

17 Ways of Controlling in Coca

Cola………………………………………………….26

18 Conclusion………………………………………………………………………….28

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ACKNOWLEDGEMENT:

1) I, Taha Khan dedicate this report to my father Late Mr. Shahid Khan who was my inspiration, my uncle Mr. Suhail Mirza who provided me with all the required info & also I want to thank my teacher Mr. Baber Wahab who is a true source of knowledge. Without his support, completion of this report would not have been possible.

2) I, Manoj Kumar whole heartedly dedicate this report to my teacher Mr. Baber Wahab who extended great help not only for the preparation of this report but also taught us the fundamentals of Management as well as its application in the real world.

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EXECUTIVE SUMMARY:

The aim of this report is to discuss all the Management processes practiced and applied in Coca Cola Pakistan Ltd. This report emphasizes on the fundamentals of Planning, Organizing, Leading & Controlling. The info provided in this report is not fictitious but is clearly based on facts and figures provided by the Coca Cola employees and derived through our visits to Coca Cola factory at D-51 Site, Karachi and research from multiple websites.

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HISTORY OF COCA COLA:

In May 1886, Georgia pharmacist John Styth Pemberton succeeded in creating what he intended, a temperance drink. He prepared this syrup as a medicine and distributed it. John Pemberton concocted the Coca Cola formula in a three legged brass kettle in his backyard. The name was a suggestion given by John Pemberton's bookkeeper Frank Robinson. Being a bookkeeper, Frank Robinson also had excellent penmanship. It was he who first scripted "Coca Cola" into the flowing letters which has become the famous logo of today. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta on May 8, 1886. About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expenses, so the first year of sales were a loss. Until 1905, the soft drink marketed as a tonic, contained extracts of cocaine as well as the caffeine-rich kola nut. In 1887, another Atlanta pharmacist and businessman, Asa Candler bought the formula for Coca Cola from inventor John Pemberton for $2,300. By the late 1890s, Coca Cola was one of America's most popular fountain drinks, largely due to Candler's aggressive marketing of the product. With Asa Candler, now at the helm, the Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900.Advertising was an important factor in John Pemberton and Asa Candler's success and by the turn of the century, the drink was sold across the United States and Canada. Around the same time, the company began selling syrup to independent bottling companies licensed to sell the drink. Even today, the US soft drink industry is organized on this principle.Until the 1960s, both small town and big city dwellers enjoyed carbonated beverages at the local soda fountain or ice cream saloon. Often housed in the drug store, the soda fountain counter served as a meeting place for people of all ages. Often combined with lunch counters, the soda fountain declined in popularity as commercial ice cream, bottled soft drinks, and fast food restaurants became popular. On April 23, 1985, the trade secret "New Coke" formula was released. Today, products of the Coca Cola Company are consumed at the rate of more than one billion drinks per day.Coca-Cola might owe its origins to the United States, but its popularity has made it truly universal. Today, you can find Coca-Cola in virtually every part of the world.

Source: http://inventors.about.com/od/cstartinventions/a/coca_cola.htm

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HISTORY OF COCA COLA IN PAKISTAN:

The Coca Cola company began operating in Pakistan in 1953 and started with Coca Cola drink as a sole brand but later increased it’s product line and added Sprite, Fanta, Sprite Zero, Vimto, Diet Coke, Kinley water & Sprite 3G. The Coke in Pakistan operates through their 8 bottlers from whom 4 are owned by the company itself under the name of “Coca Cola Beverages Pakistan Ltd” (CCBPL) with its plants at Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and Lahore and serves more than 75,000 shops / retail outlets. Coke has attracted customers from allover Pakistan through its interesting slogans and has created a wide customer base in youth. Some particular slogans are:

1953 “The friendliest drink on Earth”1963 “Things go better with Coke”1976 “Enjoy Thirst”1993 “Always Coca Cola”2001 “Life is good”2003 “Jo chaho ho jaye Coca Cola enjoy”2004 “The flight of delight”2005 “Gaa lay Delicious taste”2006 “Thanda matlab Coca Cola”2007 “Khaalay Peelay Jeelay Coca Cola”2008 “Aaja Jashan Mana lay2009 “BRRRRRRRRRR2010 “Very chill hai Coke Zindagi”

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INTRODUCTION:

Founded in 1886 the coca-cola company is the world’s leading manufacturer marketer and distributor of nonalcoholic beverage concentrates and syrups. The company’s corporate headquarters are in Atlanta with local operations in over 200 countries around the world. Although Coca-cola was first created in the United States, it quickly became popular wherever it went. Our first international bottling plants opened in 1906 in Canada, Cuba and Panama, soon followed by many more. Today, Coca-cola has a portfolio of more than 3000 beverages. Coca-cola has 92,400 employees world wide but in Pakistan there are nearly 5,000 employees working. More than 70% of outside the U.S but the real reason Coca-cola is a truly global company that meets the varied taste preference of consumers everywhere. Coke’s bottling partners are local companies so they are rooted in their communities, thinking and acting locally. They are employers, purchasers of local goods and services, good neighbors and of course producers of the world's most popular beverages. Now the Coke beverages are sold and liked in every part of the world. Coca-Cola Beverages Pakistan is one of the largest multinationals in Pakistan, engaged in the manufacturing and marketing of world’s leading beverage brands. Coca Cola is a company committed to continually earning and protecting a very special relationship with its customers - a relationship built on value and trust. It is a company of brands - brands people have come to know, believe in, and depend upon and a company of individuals - dedicated to providing superior products and shareholder return to people all over the world.

MAIN BEVERAGES OF COCA COLA IN PAKISTAN:

Coke has more than 400 products all over the world. In Pakistan the Coke Family includes:

Coca Cola (300 ML Regular bottle, 500 ML Plastic bottle, 500 ML Can, 1 Liter bottle & 2.5 Liter bottle). Diet Coke (500 ML Plastic bottle & 1 Liter bottle).Sprite (300 ML Regular bottle, 500 ML Plastic bottle, 500 ML Can, 1 Liter bottle & 2.5 Liter bottle). Sprite Zero (500 ML Plastic bottle & 1 Liter bottle).Sprite 3G (500 ML Plastic bottle & 1 Liter bottle).Fanta (300 ML Regular bottle, 500 ML Plastic bottle, 500 ML Can, 1 Liter bottle & 2.5 Liter bottle). Vimto (1 Liter Plastic bottle)Kinley Mineral water (500 ML Plastic bottle & 1 Liter bottle).Minute Maid Juice (500 ML Plastic bottle & 1 Liter bottle).

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ORGANIZATIONAL CULTURE IN COCA COLA:

The culture observed in Coca Cola is Strong at the Upper level but gets weaker in the lower work levels. Being recognized as one of the biggest companies of the world, Coca Cola in Pakistan is influenced by the Foreign Coke chains and tries to provide the best possible products to the customers. The Management creates Ethical, Innovative & Customer responsive cultures. The company follows a set of strict instructions, the Chairman, Board of Directors & Senior Management ensures that the purchase, production & distribution of all the products are made with accuracy, any unusual activity is pointed out and shared to those who need to know, the importance of time is emphasized, the success story of the International Coke companies are also discussed in order to enhance the standards and all the departments are interconnected with each other in order to avoid miscommunication and disturbances as Coke is Headquartered in Lahore at 5-E-II, Gulberg-III, Lahore 54660. Coke is making a number of changes to reward systems, training and other drivers of corporate culture to produce greater stretch, innovation and speed. It aims to create a culture that rewards going for breakthrough goals, supports taking risks, stimulates robust innovation, encourages, courageous, visionary leadership, values speed, fosters fast, streamlined decision-making and capitalizes on diversity. REFLECTIONS OF A STRONG CULTURE:

As Coke is a Multi National Beverage company, it has very high values and emphasis on work and customer satisfaction. The Culture in Coke is very strong at the upper Management & Directors as they are moreover concerned with the Quality of their products. The views, goals and plans of each department are widely shared and explained as Circulars are issued, team meetings are held, daily, weekly, monthly, quarterly and annual reports are prepared and examined to keep the work on track incase of any diversion. The Board of Directors makes sure that the Managers are performing their work in a productive manner and the Managers check whether the work is accomplished efficiently and effectively by their Supervisors and workers. Each work activity is properly defined at all work levels to make sure that Quality and Quantity is delivered to the consumers. The employee turnover at Upper levels is less and most people in the Karachi plant and distribution office are working for more than 5 yrs as the Company offers excellent remuneration package, a wide range of benefits, congenial work environment and opportunities of career and self development. Coke bears around 900 employees in Karachi and has a big structure for 2,000 employees, its size enables it’s to

IDENTIFICATIONS OF A WEAK CULTURE:

Despite of numerous efforts by the Management, weaker portion of the culture can clearly be seen in the Non-Managerial employees and workers at Coke as the lower level people are concerned only with their salaries. The worst example of weak culture at lower level is that they are illiterate and they do not properly understand the work flow charts, duties and responsibilities which results in improper production of hundreds of bottles.

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THE VIEWS OF MANAGEMENT – OMNIPOTENT OR SYMBOLIC:

The Management view in Coke has changed dramatically in the days of wild recession as the upper Management has become very particular on each issue of any department starting from Executives to Departmental heads. This approach tells us that it has become very omnipotent and Target oriented. The Oldest of the lot are also facing issues these days on regularity, punctuality and increments. The Managers are held solely responsible for everything happening within their departments even for their peons. Incase of success, the credit is shared by the team but as a result of a failure the Manager is dealt very harshly and even got fired for the mistakes of their juniors. In certain cases where the causes of failure are beyond Manager’s control, they are not blamed by the upper management for e.g. in cases of recession & economical instability, the Management cannot do more rather than maintain stability. In this scenario, the views are totally symbolic.

 

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ENVIRONMENTS IN COCA COLA:

The market analysis investigates both the internal and external business environments. It is vital that coca-cola carefully monitor both the internal and external aspects regarding it’s business as both the internal and external environment and their respective influence will be decisive traits in relation to coke’s success and survival in the soft drink industry

INTERNAL ENVIRONMENT:

The internal business environment and its influence is that which is to some extent within the business’s control the main attributes in the internal environment include efficiency in the production process, through management skill and effective communication channels. To effectively control and monitor the internal business’s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process.

EXTERNAL ENVIRONMENT:

The external business environment and its influence are usually powerful forces that can affect a whole industry and in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place coca cola must be aware off. Fluctuations in the economy changing customer attitudes and values and demographic patterns heavily influence the success of coca cola’s products on the market and reception they receive from the consumer. The External environment has 2 components which are Specific & General environments.

I SPECIFIC ENVIRONMENT:

The Specific environment includes the following factors:

A CUSTOMERS:

The Coca Cola company has Youth as it’s main customers, the motive of the company is to increase sales volume among the young generation as Coke is sweeter than Pepsi and liked but now Coke is satisfying different target markets including people of all ages, races etc. Coke’s products are purchased by almost every class in Pakistan as it does not have expensive drinks and offered in different volumes. Coke has also dominated its existence in the Hotel & Restaurant market as it has customers like Regent Plaza, Avari Towers, Arizona Grill, Copper Kettle etc are maintaining their brand loyalty with Coca Cola.

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B COMPETITORS:

All over the world Coke’s biggest competitor is none other than “Pepsi”. The competition between the companies has been neck to neck as both of them keep on trying to outplay each other in terms of pricing, promoting & packaging. As Pakistan’s economy has suffered from global recession, the competition has become tougher. In Pakistan Pepsi is leading the market with 52% and Coke is climbing up to the 40% mark however globally this situation is reverse.

C PRESSURE GROUPS:

In recent years ISO certifications has influenced all the companies operating in Pakistan as Coke is in the Fast Moving Consumer Goods (FMCG) business and is mainly manufacturing and bottling a soft drink that is used by everyone, certain policies were implemented that increased the cost as Coke believes that Compliance to international standards on quality, environment and social accountability has been universally recognized as one of the key strategic elements of product competitiveness in both domestic and international markets, along with price and delivery factors. Quality is the pre-requisite for successful market access and for achieving continued customer satisfaction. Not to forget the Governmental policies also affect Coke in many ways as each year Budget is announced with taxes rates shooting up that decreases the profit margin.

D SUPPLIERS:

Suppliers always play an important role in any company’s operation. Suppliers provide resources and raw material that company requires to produce the goods and services. Coke company suppliers in Pakistan vary with respect to the raw material they provide. Following is a brief list of different suppliers of coke.

Balochistan Glass Limited provides glass bottles of all sizes that are used in bottling.

Plato Bag Limited provides pet bottles with the labels. Labels are designed by the Packages Ltd.

Saharan Mills Limited provides the quality sugar in hygienic packets.

Vanillin Intercool Pakistan provides the machinery such as Visio coolers and chest coolers for the chilled coco-cola.

II GENERAL ENVIRONMENT:

The Coca Cola Beverages Pakistan limited has a very strong potential in the future as Pakistani population is increasing and there is a shift in the consumer perception of its conservatism and the stigma, which was attached to it as an American product, is losing its effect. Increase in the level of inflation is a major concern for the company as the purchasing power of the people is eroding day by day. As there is an increase in the dual career families and women has started working in the offices with a great enthusiasm so it can be a capitalizing point for the company. The legal/political environment does have much effect on this company. As there has been a continuous change in the governments and the policies related to the duties and taxation so it is relatively less immune to changes in this sectors of the environment. The General environment includes the following factors:

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A POLITICAL / LEGAL CONDITIONS:

In Pakistan, Political & Legal conditions have become very uncertain as constant Political instability does affect the company in terms of building new relationships with new Governments and also the Legal system impacts us as new laws are amended that are not business friendly at times.

B SOCIO-CULTURAL CONDITIONS:

Coke is very careful in implementing it’s promotional campaigns as Social and Cultural environment in Pakistan is very conservative and negative at times.

i SOCIAL FACTORS:

Include the customer family, small groups and status. The consumption power of people has fallen but still Coke has maintained stability.

ii CULTURAL FACTORS:

Pakistani culture has affected the Coke purchasing massively. In recent days, events and festivals like Basant, weddings, parties etc are an important part of our culture in which the sales of Coke go very high as soft drinks are purchased in bulk.

C ECONOMIC CONDITIONS:

As the global economy has reshaped and affected the Pakistani market also as poverty and inflation has increased giving birth to various issues which has negative affect on the common man and almost each business has suffered in 2008 & 2009. Coke has also strived the recession era. The sales volume fell by 22%.

D TECHNOLOGICAL CHANGES:

Technological changes can affect any huge business like Coke therefore it has diversified it technology as the world is getting more advanced. Coke uses latest technology in its production process which results in increase of production throughout Pakistan. At the upper Management level advanced software programs are bought, for Accounts department QuickBooks latest accounting software is purchased, advanced security systems are setup with 24 X 7 vigilance and cameras are installed in each office to monitor the activities of all employees. In short, Coke has reshaped itself with the changing technologies.

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DECISION MAKING IN COCA COLA:

The decision-making process in CCBPL is centralized. The model used is classical, whereby the top management takes their time while making decisions and explore and evaluate all the possible alternatives before choosing the rationally economic and feasible solution. Programmed decisions are made only by the top management with no consultation what so ever with the line managers while the daily and routine decisions are made by the line managers at the middle level with the prior permission or approval from the general manager. As Coke is a multinational organization and has millions of customers’ allover Pakistan, it knows that the decisions and actions that it will perform will have adverse affects internally as well as externally. Let’s take these 2 years of recession as an example, in Pakistan Coke was also affected by it. How did Coke encounter this problem? And what did it do maintain stability?First, the think tanks in Coke were less prepared for the economical downfall allover, after constant pressure from Head office, the experts and Departmental heads conducted several meetings and emphasized on few steps to come up with a conclusion, few people suggested answers which reflected rational decisions while others suggested conclusions which identified bounded rational decision making and few were making decisions according to their experiences, feelings and judgments. Each discrepancy was closely monitored, all the points were noted, each substitute was taken into consideration, analyzed, discussed then selected and implemented and later checked whether the decision have been effective or useless. The Management came up with unique deals, lowered the prices on drinks, introduced new packaging and advertised simply to keep up with the momentum. The decision makers prefer situations of Certainty and avoid risk and uncertainty. Management in Coke has become very strict and accurate in decision making and is observed in adopting the Directive style in decision making which supports low tolerance for ambiguity and rational way of thinking. The basis of the decisions depends on the market and the company’s competencies in regard to the future prospects. The decision making process in the company is highly centralized and the workers feel that there exists no proper authority existing in the firm. The salesmen feel dissatisfied for they are totally powerless to make any decisions themselves. In dealing with their buyers they have not the slightest authority to allow them any credit or discount.

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CONCEPTS OF PLANNING IN COCA COLA:

Planning has been the Core activity of Coke as it has a huge infrastructure. Although the Head office is in Lahore, the Karachi plant office knows the significance of adequate planning to stay in competition with Pepsi and realizes that Planning provides clear directions, reduced uncertainty, minimizes waste and redundancy and establishes goals which are the standards of controlling. Coke does good planning which results in better performance. Planning is done at the upper level and instructions are sent at each department in case of change of action. In Ramadan ul Mubarak Coke sales exceed the supply and the Executives plan each year to meet the requirement and demand as discounts are offered and schemes are introduced. Managed planning results in higher rate of return in most situations. Coke has multiple plans to meet all contingencies. It has Strategic plans which are applied, Operational plans for work activities, in winters Coke follow Short term plans and for the future the company has its Long term plans. Few Specific plans are developed in case of special cases whereas Directional plans are set up for general guide lines. Single use plans are also established to meet unique situations and for regular operations throughout the year Coke has its Business standing plans. As being a Professional organization, Coke is indulged in Formal planning as each plan is properly documented, shared and held particularly important in the Management level. As the World is advancing and clouds of uncertainty and risk are over each business in Pakistan, in this scenario planning has become critical and Coke specialists know this setback and react quickly to any changes. Coke plans through the sales volume. It first concentrate on the thing is “what is the condition of the sales?” if the condition is good then it increases the production and sales volume. Otherwise it concentrates on old strategies. The second thing through which it checks is the “profit”. If Coke is making profits with the high margin, then it definitely wants to increase their profits in the next coming year. Every organization runs on the basis of getting high profits. No organization wants to face Loss in their business. To get profit is the first priority of the Coke.

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MISSION STATEMENT OF COCA COLA:

Coke’s mission is to increase market share, maintain quality, good relations with its customers and create value for all products. Coke believes that Brand Coca Cola is the core of business, expansion of customer base in necessary for growth, customer satisfaction is regarded as the top priority, Maintain high standards in non-alcoholic drinks, create value and make a positive difference and provide products of superior quality and value that is loved by its consumers. The Coke system serves more than 17 million customers around the world that sell or serve Coke products directly to customers and people like the Coke products due to their quality, taste and loyalty to the brand. To provide the best products to customers at all times is the mission statement of Coca Cola.

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GOALS OF COCA COLA: All CCBPL plants setup their own goals to achieve their objectives. The company common goal is to increase sales volume, make good profits and gain market leadership. Coke sets its goals and objectives keeping in view the past performance, historical trends, current market position, economic condition, environmental factors, social values, market size, growth rate, future expectations and predictions. Goals in Coke are professionally well designed, written in terms of outcomes rather than actions, time frame is mentioned and challenging but attainable targets are set for sales & marketing departments. The concept of means –ends chain is also observed as the purchasing, manufacturing, marketing & sales processes are interlinked with each other.

STATED & REAL GOALS:

Goal setting has been well designed and Heretical as common goals are set at the Upper Management level and explained to everyone. Coke is very professional in terms of its official statements, organizations profile, charter, annual reports, public announcements, advertisements and slogans which reflect what they believe and want their stakeholders to believe. Coke’s stated goals are: Being a great place to work where people are inspired to be the best they can be.Nurturing a winning network of partners and building mutual loyalty.Maximizing return to shareowners while being mindful of our overall responsibilities.Customer is king; Customer demand drives everything we do.What we do, we do well”.

Coca Cola has number of real goals which are:

Maintain stability in bad economic conditions.Increase the volume of sales up to the maximum level as much as possible during the current fiscal year.Drive efficiency and cost-effectiveness everywhere.Pull consumer’s demand.

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S.W.O.T ANALYSIS OF COCA-COLA:

Being such a big multi-national company, Coke has to follow different types of strategy in every part of the world. A strategy proved successful in any part of the world will be not necessarily successful in any other part. On the whole Coke follows mixed strategies including all the three types i.e. intensive, integrative and diversion. In order to find out the appropriate strategies for Coke to follow in the future, S.W.O.T. has been made in the following section. This section lists the Strengths, Weaknesses of the company and the Opportunities and Threats which are present in the Pakistani Market.

STRENGHTS: Strengths are basically the powerful side of the company. These are the favourable factors of a company, which might help it to avoid the threats present in the environment and can also be used to improve upon their own weaknesses.

I POPULARITY:

Coca-cola is an extremely recognized company as its popularity is one of its superior strengths that are virtually incomparable. Coke is known very well worldwide as its branding is obvious and easily differentiated on logos shown on t-shirts, caps, hoardings, advertisements & TV programs.

II BRANDING:

Most people buy Coke only because it is widely accepted and they feel like they are part of something so big and unifying. If you speak the word “coca cola’’, it would definitely be recognized all around the world.

III AVAILABILITY OF FINANCE:

Money is a major factor and strength of a company. Coca-cola deals with massive amounts money all year.

IV CUSTOMER LOYALTY:

Another factor of strength is very important is customer loyalty. Seventy percent {70%} profit comes from 20%of loyal customer.

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V WORKING STRUCTURE:

Coca cola’s organizational structure is of International standards, hence there are clear cut and well defined policies, procedures, rules and regulations that have to be followed under all circumstances hence the working style is highly professional and discipline is maintained at every level of the organization.

VI PROPER TIME DELIVERY:

The fixed time of delivery of Coke to retailers, shopkeeper’s etc punctuality is maintained which gives Coke an edge over all its competitors.

VII NAME, SYMBOL & BOTTLE SHAPE:

These all are Coke’s strengths which gives it an edge over its competitors. Coca-Cola bottle shape is so unique and stylish than even if the name is rubbed off people will still easily identify that its Coca-Cola bottle. Same is the case with its symbol and name which cannot be imitated and are so well known.

VIII ASSETS & SKILLS:

Coke being one of the biggest multi-national companies and by being in business for more than 100 years, have developed huge asset base which include hundreds of manufacturing Plants in more than 150 countries. It also has skilled and educated labor that is regarded as one of its positive points. It has also a very comprehensive human resource management system with very good training programs in the country of the employees and also arranges the training in foreign countries for top management.

WEAKNESS:

Coca cola is a very successful company that has few weaknesses.

I LACK OF POPULARITY OF FEW PRODUCTS:

Many drinks that they produce are extremely popular such as coke and sprite are popular in Pakistan while few are unpopular, the demand and supply of few products like Minute Maid has not pleased the Management.

II WORD OF MOUTH :

Word of mouth is another weakness of a company. It is something that is very hard to control. Everyone have different opinions and you can try to eliminate/sway their negative views.

III LIMITATION OF RESOURCES:

This is the biggest weakness of Coke. In worse situations requests for finance from the CCI (Coca-Cola International) based in USA is observed along with aid from the HQ in Lahore. Currently Coke is unable to supply as many freezers, coolers, finance sign and electronic bill boards as shopkeepers demand as does Pepsi which is the major reason why Coke sales falls.

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IV NON-AVAILABILITY:

Coke is not available in small towns and in rural areas reason being that the distribution channel of Coke is not large and is not extended owing to limitations of resources and lack of proper infrastructure.

V FORMALITY OF RULES & REGULATIONS:

The organizational structure of Coke is too formal (being supervised by CCI) so the lengthy processes of decision making and implementation through hierarchy system i-e follow order from CEO to downwards) have to be followed and employees in Pakistan even (GM) is not allowed to take decisions to change even smallest of things like (Instruction on bottle) on their own. Many brilliant ideas for improvement and boost sales remain locked up in employees’ brain as they are not allowed to work at their own free will.

OPPORTUNITIES:

Opportunities are the external factors for the company which could benefit the company if they are capitalised by using the strengths of the business. In the economy of Pakistan Coke is working on the following opportunities of which it can take Advantage of:

I OPEN MARKET:

It has many successful brands that it should continue to exploit and pursue. Coke currently holds about 36% market share in Pakistan. Pepsi leads by holding 54% of market share, 10% to other small beverages e.g. RC- cola, Makka-Cola, Pak-Cola etc. therefore there is a vast opportunity for Coke to capture 70% market share as 54% belongs to Pepsi and 10% to others.

II EXPANSION OF INFRASTRUCTURE:

Coca-Cola with International standards can increase its market share many folds with little efforts. Increasing the distributing channels and infrastructure to ensure availability in small towns and areas. Line extension like Fanta, Coke, and Sprite in different flavors. Launch a new product it can do it successfully as it is a well established company and has already positioned itself in customers mind (as those who provide the ultimate taste and quality) so they are bound to try their new products as well.

III RESPONSE FROM THE CUSTOMERS:

Until now the consumers have shown interest in the products introduced by Coke and have accepted with open arms the good quality products brought by Coke in Pakistan. This shows that Pakistani market is ripe for other products also and a little market penetration can increase the sales.

THREATS:

Threats are also external factors which can have a negative impact on the company’s performance. These threats are to avoid by using the Strengths.

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I COMPETITION:

Competition is an opportunity and a threat at the same time. If Coke, with its capabilities handles its competitors with right strategies then this will be an opportunity for the company, but if the competitor is fast to take action and has a knowledge of the weaknesses of Coke it can pose a great threat for it and its success. Pepsi is giving Coca Cola a great competition in soft drink industry all over the globe and is the major Threat to Coke and its products.

II NEW ENTRANTS:

New entrants like Pak –Cola that can exploit anti Jewish and anti war sentiments, provoke nationalism sell at low prices and can be a source of threat for Coke in future once they fully launch their products in Pakistani market so coke management has to look out for them over the time.

II NESTLE PRODUCTS:

Juices, Milo, drinks, etc as well as Shezan products Squashes, Tetra pack juices are also sort of a threat but not the direct threat for Coke because they provoke health consciousness and physical fitness .Although Coke has converted it’s attack on health issues by offering Diet Coke yet the threat isn’t over .However Coca-Cola can effectively counter their threats at any time by launching even more products.

III TAXES, GOVT LAWS & POLICIES:

The Coca-Cola management is not happy with the Govt. tax laws and policies. Being a Multinational with whole plants in 10 cities it is under heavy tax. Imposition so much so that on single bottle revenue. It has to pay as much as Rs2.97/-as tax to the government with the consequent result that Coca-Cola is the first beverage and 2nd highest tax paying company in Pakistan. It pays 33% on its total revenues.

IV POLITICAL & ECONOMICAL INSTABILITY:

The political and economic instability has caused changes in the policies almost every year due to frequent the changes in the governments. Another problem which the companies face are the terrorists attacks, strikes and off-days which costs the companies additional costs and halt in the production activities. Thus, it is one of the factors about which Coke can do very little about. The poor performance of the stock exchange due to the instability has caused Coke a lot of decrease in its share prices ad capital erosion and several losses on its investment.

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ORGANIZATIONAL STRUCTURE:

The Organizational structure of the business is simple, solid and timeless. When it brings refreshment, value, joy and fun to its stakeholders, then Coke successfully nurture and protect its brands, particularly Coca-Cola. That is the key to fulfilling the ultimate obligation to provide consistently attractive returns to the owners of the business. Coke Pakistan has a huge structure. It has multiple plants, distribution houses and offices all over Pakistan, lets take the Karachi office, here Coke has an enormous plant and complete office @ D-51 S.I.T.E and a distribution house near the plant. Both offices bear nearly 2,000 employees. Organizational hierarchy of Coke main departments are as follows:

Chairman↓

Vice Chairman ↓

Board of Directors↓

Directors↓

General Manager←↓→

Sales Operations Manager Marketing Operations Manager IT Manager Production Manager↓ ↓ ↓ ↓

Sales Training Managers Ads & Promotion Manager Network Manager Plant Manager↓ ↓ ↓ ↓

Regional Sales Managers Assistant Marketing Managers Support Manager Asst Plant Manager↓ ↓ ↓ ↓

Area Sales Managers Marketing Supervisors Network & Support Plant Engineers↓ ↓ Executives ↓

Sales Executives Marketing Executives Plant Supervisors↓

Workers

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DEPARTMENTALIZATION IN COCA COLA

Every organization is made up of different departments, each of these departments help achieve their objectives. As Coca Cola is a large multinational company, the numbers of departments are huge. Each country has its own Head Office and departments. CCBPL is divided into different departments on the basis of functional approach. People are grouped together on the basis of common skills and work activities. This approach helps company in achieving the economies of scale through high quality of problem solving and lesser needs of the training of the employees.

GEOGRAPHICAL DEPARTMENTALIZATION:

Coca Cola is geographically split into five geographic operating segments, also known as strategic business units (SBU's). The six SBU's are North America, Africa, Asia, Europe, Middle East and finally Latin America. If all departments perform in the correct way then that will continue the success of Coca Cola. In Pakistan Coke have 10 plants which are located in the following cities: Karachi.Lahore.GujaranwalaRawalpindiPeshawarHyderabadFaisalabadSialkotRahimyarkhan FUNCTIONAL DEPARTMENTALIZATION:

There are 8 functional departments within Coca Cola Karachi, these are:MarketingFinancePackagingSalesResearch and developmentAdministration

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ITHR/IR

I MARKETING DEPARTMENT:

The Coca Cola marketing department develops core strategies for company brands to ensure that all communication is consistent in every market with this cohesive effort, the Coca-Cola system maximizes its resources for market leadership and profitable growth. The marketing departments are responsible for marketing, advertising and promoting the products. If all these departments perform their duty firmly then the objectives of the Coca-Cola Company will meet.

II FINANCE DEPARTMENT:

The finance department of the Coca Cola Company is responsible for financial record keeping. This involves keeping records of money received and paid out. The financial records will be used to produce the annual reports for the shareholders so that they can see the company performance. The Finance department is also responsible for the management accounts of the business like marketing etc. The Coca-Cola Company finance department is also responsible for making budget of the company and for each department like marketing department or research and development department. They will also be involved in the planning process like taking major decisions.

III PACKAGING DEPARTMENT:

The packaging department of Coca-Cola Company is responsible for the packaging of the products. They have to make the packaging attractive so that the product meets the eyes of the consumers. Bringing new products package is their responsibility. It works with the companies bottling partners to produce an attractive combination.

IV SALES DEPARTMENT:

The sales department of the Coca Cola Company is to coordinate the selling program. They also have to make the distribution methods, etc. Also, decide how much to sell and how much to store in the warehouse and to choose the transporting method which is the most cost efficient and the quickest way.

V RESEARCH AND DEVELOPMENT DEPARTMENT:

This department has their budget given by the finance department and their responsibility is to investigate new products. They work closely with marketing by looking at marketing research findings. They have to bring new products in the market for the change because the consumer cannot stick with the same old products. If necessary then they also have to improve the quality of the products. The Coca-Cola Company research department has done a lot of research and recently they have launched many new products.

VI ADMINISTRATION DEPARTMENT:

This department is essential for keeping the business going. They act as a help support of the company, it is not the central purpose the business but every business organization would need this department. Most businesses rely on administration to be organized. They deal with enquiries, give messages produce documents and give information to any customer. The complaints that this department will get would be

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transferred to the research and development department to make the product better or fix the problem that the consumer is having. These departments are the most important department of The Coca-Cola Company because they helps the company to meets the objectives of The Coca-Cola Company i.e. surviving, customer satisfaction and make more profits. As I said that the help desk department satisfies the customer by providing the information they needs and taking the complaints and passing to the research and development departments who improves the products.

VII INFORMATION TECHNOLOGY DEPARTMENT:

IT department handles all the Network, Systems, Servers & Employees workstations support, maintenance and software programs in use. Coke management emphasizes on paper less environment and mostly co-ordinate via emails. To keep the office linked up with other cities is also the responsibility of the IT deptt.

VIII HUMAN RESOURCE / INDUSTRIAL RESOURCE DEPARTMENT:

HR/IR department hires and fires people. Coke believes that skilled labor is an asset and to extract the top working class from the city is the prime activity of this department.

SPAN OF CONTROL:

The span of control is low as there are 3-5 employees reporting to their managers. This low structure is due to the fact that organization is a vertical and different people have different works to do so. It is also difficult to control more than five people and still manage the resources and people in an effective manner

WORK SPECIALIZATION IN COCA COLA:

The work specialization is high, as each Manager is made responsible for only a particular function, which is his expertise. There is no boredom or monotony as each salesman is meeting the different sort of person and the work is challenging and promotions are based on performance there is no monotony and boredom.

DELEGATION AND ACCOUNTABILITY:There is a high degree of delegation and delegation is done with proper authority and responsibility. Each manager is also made accountable for the actions of his subordinates. Proper instructions and guidance is given at time to time to achieve the objectives by the respective managers.Apart from the delegating every manager is responsible for motivating his juniors so as to increase the effectiveness and efficiency of the employees. Human Capital department also helps employees realize their potential and motivate them through different methods. They make sure that they give the best in return to their managers. This increases their performance, the quality of their work, and customer satisfaction.

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LEADERSHIP IN COCA COLA:

The managers at CCBPL are very supportive as they use teams and treat subordinates as equals and have a highly open communication system. They are participative since they encourage the involvement of the employees in common decision-making and make use of group discussions.However, some monetary and non-monetary rewards are used to create a high involvement from the employees especially at the lower level. The general manager of the company is at the topmost position in the organizational hierarchy. Even though he is not directly involved in its operations he is responsible for taking major administrative decisions regarding the company policy and operations. Departmental managers are responsible for leading and directing their subordinates. As there is a very high degree of delegation and participation so they believe that the leadership style used in all the departments of CCBPL is democratic. The concept of team management is only practiced in the sales and marketing department as they have to work in dependence of one another. Subordinates are given a fair treatment and are dealt in a very good manner so as to give them a feeling that you are not only an employee but also a member of the family.Managers play a vital role in motivating employees as they give them the timely feedback about their activities. They also help them solve different problems, which can be job related or personal problems. Working environment and a challenging milestone are a major factor in employee motivation at CCBPL. These leaders focus on these areas:Increasing business with a coordinated approach by helping each other in its operations. Encouraging the employees to give new ideas so as to increase the customer satisfaction. Coke has numerous managers who are responsible for making decisions which are of high relevance in their work of their respective department.

TRANSACTIONAL & TRANSFORMATIONAL LEADERSHIP IN COKE:

Coke has few Transactional and Transformational leaders in the Marketing & Sales departments who guide and motivate their followers to achieve their departmental goals and required work and these leaders are capable of having a profound and extraordinary effect on their followers. The Sales Manager has responded to various threats and weaknesses in the local market, worked hard with his sub-ordinates and achieved more than the target in 2009.

VISIONARY & CHARISMATIC LEADERSHIP IN COKE:

The General Manager of the Karachi plant is an example of a visionary and charismatic leader as he is an enthusiastic and self confident personality who has a vision, ability to articulate the vision and he can exhibit behaviors that are out of ordinary. He explains his vision to his juniors not verbally but through

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his acts. Even in the days of recession his work is exemplary as his ideas helped the company to maintain stability.

WAYS OF CONTROLLING IN COCA COLA:

Controlling is considered as an important factor in Coke as it is one of the market leaders in beverage industry and do not want to loose its data, assets and business secrets which can be used against the company. The company has various methods of controlling in all of its departments. To maintain standards, prevent data theft, prepare accurate accounts, control inventory in the plant and in the manufacturing process etc Coke has adopted the state of the art technology to ensure international controlling standards. Control is done through the evaluation, which is based on the very objective basis. Certain criteria are fixed in advance and if these criteria are not met then the employees are asked and evaluated for the reasons and corrective actions are taken by the respective managers. Different departments have different criteria and different reporting and controlling systems. Let’s take the few departments in an example, the reporting, evaluation and control systems are as follows:

SALES DEPARTMENT REPORTING SYSTEM:

Every sales person directly reports to market developer of his area. A sales person is supposed to give him a daily report of his activities and he is free to ask for any kind of assistance from the market developer.Every salesperson is given an attendance punch card, which records his arrival and departure time. He is also given a route call card, which he is supposed to fill out. This card includes all the details about the visits of the outlets, time spent on these outlets, sales made on these outlets, time spent on these outlets, sales made on these outlets, time during traveling, names of the loaders and salesperson’s time in and time out of the vehicle. Apart from this a sales person is also given a form to fill up for the next days order to be loaded in the truck. This basically tells about the total sales of the salesman according to the brand and the size of the product. This basically is used by the human resources department to evaluate the performance and calculating the total salary of the salesman.

SALES DEPARTMENT EVALUATION SYSTEM:

Every salesperson’s evaluation is done on quarterly basis. Evaluation helps the company to promote the people to the higher levels of the organization. This evaluation also motivates salespeople to work hard and get the promotion or at least the monetary rewards, which are given not only to the best salesman but the best market developer and the best sales manager of the year. Performance is evaluated on the basis of performance development plan. Performance is measured on the basis of achievement of the targets, which are set and communicated at the very beginning of the year to each sales manager, each quarter to

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every market developer and every month to each salesperson. This performance development plan evaluates the sales people on the basis of call slips, Route call, Call completion, Effective and productive call, attendance, growth in sales, market development and the punctuality of the salesman.

ACCOUNTS DEPARTMENT QUICKBOOKS SYSTEM:

The Accounts department has been given advanced accounting software from an American company “Intuit” named as “Quick Books” 2007. It is licensed software. It is used for data entry of daily transactions, daily, weekly, monthly, quarterly and annual reports, employee records, salaries and commissions, payments and receipts etc. The transactions are checked first then entered in the system, daily reports are generated to balance all the cash paid outs. This system is proving to be really very effective as every transaction becomes transparent and can be easily monitored and traced.

EMPLOYEES ATTENDANCE SYSTEM:

Employees Attendance system has been established to control the absences and late comings of employees of all departments. The card swap system & Online attendance system has become very effective in Coke. Through this system the Management deducts salaries on late comings and absences.

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CONCLUSION:

To conclude we can say that Coca-Cola no doubt come the heart beat of Pakistanis. It has attractive product line, great taste and efficient marketing trends. The planning, organizing, leading and controlling principles are highly regarded in Coke to maintain professionalism and quality in their products. Coke has a wonderful working environment and a big brand name which attracts people to work with it and use its products. This report explains us that despite the fact Coca-cola currently occupies the market leadership position overall but it does not guarantee that the company will sustain its position in the future as well. In Pakistan as compared to Pepsi, Coca-Cola has less number of consumers as Pepsi’s market share in Pakistan is approximately 54% where as coke market share is hovering about 36%, hence the conclusion is that Coca-Cola must enhance factors such as relationship marketing, innovation and technology specially in Pakistan to attain market leader position in this region as well.

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