Analyzing the Innovativeness in Inventory and Supply Chain Operations of Coca-Cola
The Coca-Cola Company is established in the year 1886 by John Pemberton. It came into existence with a single product named Coca-Cola but its marketing and branding techniques acted as boon. Due to this, the organization became successful in attaining almost 49% (Coca-Cola, 2017) of the market share as compared others in the region of UK as shown
Figure 1: Market share of Coca-Cola in UK
Source: Coca-Cola, 2017
However, the presence of the product, Coca-Cola slowly faded its presence in the market due to the entrance of many other rivals like Pepsico, Dr, Pepper & Snapple etc. Due to this, its profitability and net income also attained a strong downward shift that diminished its position in the market among others. Then, the management decided to implement innovative techniques within the supply chain operations as described below.
To cope up with the changing desires of the target audiences, the management of Coca-Cola desired to introduce ‘free-style innovative aspect in supply chain’ as shown below.
Figure 2: Freestyle machines
Source:Horovitz, 2014
Such an approach is implemented by the firm in order to encourage a wide range of customers towards the products of the brand. Doing so, the brand image and profit margin of the firm might get augmented significantly as compared to others. In consideration to the statement, Horovitz (2014) detailed that innovativeness is a part of competitiveness as it create a new reason to fight. Innovation results in development of demand in a saturated market. Similar concept came into limelight in case of Cocoa-Cola. Introduction of freestyle machines resulted a zest and enthusiasm within the younger generation of the country since, it comprises of 100 options to modify the drink. The audience may easily turn the nobs of the preferred drink and customize it accordingly. This offers an opportunity to identify the tastes of different brands at a singlemoment. Other than this, with a small amount, varied rinks might also be tasted by the consumer. Hence, the marketers may easily identify the market share and brand preferences of the youngsters of this generation through these machines. Contrary to this, Zigiaris (2000)signified that inaccurate innovativeness might create discrepancies and it would create negative effect over the products of Coca-Cola among others. Thus, to implement innovation, evaluation of the target audience’s desires is the prime requirement. Without which inventive changes might not present effective results for the brands.
The above presented freestyle machines are implemented in varied restaurants and soft drink parlors, to excite mass drink customization. However, these machines not only encourage the consumers for the different drinks but also present instant information of demand to the company and the dealer. This became possible due to the presence of microdispensing as well as proprietary PurePour technology. Along with this, the machines use RFID chips so as to detect its actual supply and its radiosupply requirement to the organization. So, it becomes possible for the machine to present supply and demand information to both Coca-Cola and the retailer or dealer at different times of the day (Zigiaris, 2000). This helps the organization to understand the level of demand in the regions and the preferences of the drinks in diverse locations.
Planning Techniques and Technologies of Supply Chain Utilized
Since, the machine offers more than 165 types of Coca-Cola drinks so as to create custom essence. Doing so, the demand and supply increases for the products of Coca-Cola.
The plan to implement the innovation of freestyle approach acted as a driving force for Coca-Cola in UK market. Initially it is presented in some prime markets such as UK, USA, Europe, Africa etc. The figures of these markets regarding freestyle machine presented stunning results and so, the management of Coca-Cola decided to introduce it. However, in order to increase the sustainability and competition of the brand, the management of Coca-Cola decided to develop a tough-screen dispenser. Keeping in mind, the target customers, it is developed accordingly to present self-mixed beverages in small doses (Coates, 2016). Thus, it may be depicted as the never-ending hunt of Coca-Cola to magnetize the youthful and techie.
In order to improve the information and ranking of Coca-Cola brands in the global perspectives, IoT (internet of things) are introduced within the freestyles and the vending machines as shown. The IoT sensors, Bluetooth beacons and RFID tags are tagged with business intelligence (BI) so as to create a separate place for itself in the market (Winzelberg, 2017).
Thus, IoT is introduced in order to reduce the quality related errors of the machines thereby amplifying its prospects and status in the entire globe.
As per the report of USA Today, Freestyle machine of Coca-Cola is at a critical intersection as it develops from the new adolescent on the block to extremely expensive smash or failure. It has been evaluated that Freestyle is not a beverage formula. The report indicates that it is a formula for surviving in the soft drink industry to attain the competitive market (www.usatoday.com, 2017). It has been examined that the teenagers are focusing on, touch-screen container flavors self-made drinks in miniaturized scale measurements. It might be Coke’s best plan to keep Millennials completely connected with, socially included and purchasing fizzy beverages at once industry deals are falling quicker than dilute the deplete.
As an action plan of this associated risks true customization is required so that the customers could mix and match the drinks and flavors as per the requirement. Therefore, Panizzolo (2012) cited that there would be no limit only for the current coke products. There would be always a flavor system. In addition, Unique drinks and flavor combination is required as the users could create a new flavors and drinks via the webpage and social media page. According to the view of Jagdev and Browne (2010), the new combs can be tied with unique user ID’s and codes so that it can be scanned within the machines. Moreover, users could create, rate and experiment for getting a better result. Thus, it would be helpful to roll out and promote different types of drink’s flavor.
Impact of Project Planning Approach
The Freestyle machine could have been the flawless and co-creation expedient. However, it has experienced several shortage during the implementation time. The good news is that Coke has understood this, and is planning to add 2D scanners retro-fitted to test on a predetermined number of machines for 2012. With the adopted strategies, the management can satisfy the customers through the help of a secured machine. It has been identified that the Free-Style machine used by Coca-Cola was initially developed by Taunton. The entire cost of the machine is $20,000 (Coca-Cola, 2017). It has been identified that Coca-Cola’s Freestyle is available on a lease for $320 per month. Additionally, the cost of making syrup to soda is averagely 30% (Coca-Cola, 2017) higher than the cost of standard foundation of the machine. Therefore, it can be stated that the project is highly suitable for the chosen company. The past scholars suggested that the high amount of return on investment can be earned through the machine to the company. Therefore, it is a high profitable business for the company to expand the market share. Adding to this, it has been examined that currently there is 19,000 machines in about 10,500 locations internationally (Coca-Cola, 2017). The machine is also able to produce 146 types of different flavors to satisfy the customers. Therefore, it could be stated that the machine is highly beneficial for Coca-Cola.
The bard engagement strategy employed by Coca-Cola is effective to increase the market value amongst the international market. It has been identified by Hines et al. (2012) that the brand has own unique way to increase the customer satisfaction. This would also help the firm to attain more number of customer footfalls. The flavor of Freestyle has helped the firm to increase the profitability by $76 in the initial period. However, the report of USA Today impacts negatively on the brand’s performance. It has been identified that Coca-Cola got lesser profit in the first-quarter of the financial year and revenue has been slightly minimized (Gurumurthy and Kodali, 2011). The company reported that the firm got $1.62 billion profit and 36% share increment for the period of January-March in the financial year of 2014 (www.coca-cola.com, 2017). However, there is a downside where the firm attained $1.75 billion profit and 39% market share for the similar period (January-March) in the financial year 2016. Moreover, the stock of the firm has been increased more than 2% in the early transaction. As a consequent the market share of the firm has been increased by 44% in the last year (Coca-Cola, 2017).
Effect of Quality Enhancement Aspects
The entire cost can be evaluated by evaluating the operational profit of the firm. As the firm got 10% higher profitability in the last 52 weeks, it has been stated that the firm could achieve a higher competitive position in the current market (Radnor and Boaden, 2015). It has been also identified that the firm presents in 10,500 locations and currently offers 19,000 machines (Coca-Cola, 2017), thus, it can be inferred that the cost of the machine is justifiable. Along with this, the profitability earned by the firm is also justifiable in terms of the business operations and investment ratio.
As per the opinion of Rafferty and Tapsell (2014), Freestyle is a game changer in the industry of soft drinks. Coca-Cola Freestyle provides a Valuable Supply Chain Research to the company which would help the firm to stable the future market aspect. Adding to this, Coca-Cola Freestyle is capable to give an uninterrupted different types of flow of flavor to satisfy the customer requirements. It has also been depicted by Gundeep and Belokar (2012) that the Coca-Cola Freestyle encompasses to permit the Coke to accomplish the perfect request made by the Supply Chain biological system. Moreover, this is one of the biggest investment in the history of innovation of Coca-Cola.
Conclusion
The current study initially analyzed the performance of the Freestyle machine developed by Coca-Cola to earn maximum profitability in the international market. The above analysis indicates that the machines are eligible to make the clients happy and satisfied towards the brand. It has also helped the firm to increase the stock. The supply chain management of the soft drink brand has experienced a potential growth through the assistance of the Freestyle machine. Moreover, this machine offers the customer to choose the preference flavor by increasing the number of items. Hence, it can be inferred that the Freestyle machine has helped Coca-Cola to attain a sustainable market position in the international market.
References:
Coates, J. (2016). Why retail giant Coca-Cola is using IoT connected vending machines.[Online] Available at: https://internetofbusiness.com/supply-chain-iot-coca-cola/ [Accessed on 16.3.2017].
Coca-Cola (2017). About the products. [Online] Available at: https://www.coca-cola.com/global/glp.html [Accessed on 16.3.2017].
Gundeep, S. and Belokar, R. M. (2012) “Lean Manufacturing Implementation in the Assembly shop of Tractor Manufacturing Company”, International Journal of Innovative Technology and Exploring Engineering, 1(2), pp. 71 – 74
Gurumurthy, A. and Kodali, R (2011) “A multi criteria decision making model for justification of lean manufacturing systems”, International Journal of Management Science and Engineering Management, 3(2), pp. 54-62
Hines, P., Holwe, M. and Rich, N. (2012) “Learning to evolve – A review of contemporary lean thinking”, International Journal of Operations & Production Management, 24 (9), pp. 994-1011
Horovitz, B. (2014). Coke aims for cool with new 146-flavor dispenser. [Online] Available at: https://www.usatoday.com/story/money/business/2014/04/14/coca-cola-coke-freestyle-soft-drinks-beverages/7478341/ [Accessed on 16.3.2017].
Jagdev, H.S. and Browne, J. (2010) “The extended enterprise – a context for manufacturing”, Production Planning & Control, 9( 3), pp. 216-229
Radnor, Z.J. and Boaden, R. (2015) “Developing an understanding of corporate anorexia”, International Journal of Operations & Production Management, 24(3), pp. 424-440
Rafferty, J.s and Tapsell, J. (2014) “Self-managed work teams and manufacturing strategies: Cultural influences in the search for team effectiveness and competitive advantage”, Human Factors and Ergonomics in Manufacturing, 11(1), pp. 19-34
USA TODAY. (2017). Coke aims for cool with new 146-flavor dispenser. [online] Available at: https://www.usatoday.com/story/money/business/2014/04/14/coca-cola-coke-freestyle-soft-drinks-beverages/7478341/ [Accessed 16 Mar. 2017].
Winzelberg, D. (2017). Everything You Need to Know About Coca-Cola Freestyle. [Online] Available at: https://www.coca-colacompany.com/stories/everything-you-need-to-know-about-coca-cola-freestyle [Accessed on 16.3.2017].
Zigiaris, S. (2000). Supply Chain management, NNOREGIO: dissemination of innovation and knowledge management techniques. [Online] Available at: https://www.adi.pt/docs/innoregio_supp_management.pdf [Accessed on 16.3.2017].
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
