Strategy Implementation, Evaluation and Control

STRATEGIC MANAGEMENT PLAN 7

Strategic Management Plan

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MGT/498

March 12, 2017

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Strategic Management Plan

An environmental scan is a process that systematically surveys and interprets data to identify opportunities and threats. It enables an organization to gather information about self, its competitors, and the external world. The organizations then alter its strategies and plans if the need arises. Coca-Cola Company is familiar since it has been operational for a long while, the nineteenth century. Environmental scanning is conducted in several steps. First, information about the world where in this case, coca cola operates, is gathered. For instance, the economy, the government, political and demographic factors. Then, the organization should focus on its competitors, the current trends, opportunities, and threats. The last step is internally scanning the organization; its strengths and weakness (Hill & Jones, 2010).

Coca-Cola is a company established in many nations across the world. It, therefore, earns income in many foreign countries which have different income and cooperation tax. An increase in such taxes affects the company’s finances negatively since the income would be lower. Also, fluctuating exchange rates could result in losses when trading in foreign countries. With the current population, people are getting to embrace and practice healthy lifestyles due to the increased knowledge of nutrition. Thus, people prefer snacks with less sugar and fat content. With coca cola being a beverage company, its products, therefore, have to be in line with the customers’ preferences.

Environmentally, coca cola has challenges with its packaging of using more sustainable and environmentally friendly products. Coca cola’s cans and bottles always state if they are recyclable and how they should be disposed of correctly. The world is becoming digital with all the technological advancements. Therefore, coca cola should try and tap into this field, or rather, embrace it and use it to their advantage. Coca-Cola has tried and managed to come up with an app that enables the user to create a can with a message on it and send it. This is an exciting way of communicating with friends through the brand. Hence, it also promotes the brand.

Coca-Cola invests a lot on their customers by promoting their brand since they believe that sustainable growth of the company can only be achieved through a relationship with the customers which later translate to sales (Ireland, Hoskisson, & Hitt, 2008). The company also has strong ethics. They help its employees develop skills and move them further into their career goals. Its suppliers should prove to be sound, ethical and sustainable to ensure that the products don’t run short and the customers can access what they want and whenever. Coca-Cola is assumed to be monopolistic. However, it faces competition from Pepsi which has their brand all over the world and has also witnessed a growth net in their revenue.

Coca-Cola has been the leading soft drink company since the nineteenth century up to date. Customers, therefore, trust the brand. Their competitive advantage can be attributed to their secret recipe which arguably tastes better and the company’s ability to come up with new products and enhance the old ones. Currently, coca cola offers over four hundred brands hence enabling the consumer to choose one that’s suitable for him in regards to health and preference. Coca-Cola has one of the most comprehensive distribution system, which has made its products accessible to billions of people worldwide. Also, incorporation of technological advancements to their production has cut the production cost by a huge percentage hence resulting in high-profit margins.

As stated earlier, coca cola stays vigilant with the updated technology since it translates to automation which cuts down on human labor hence saving costs that could’ve been incurred (Labitan, 2012). Technology also reduces the production costs which in turn increases the profit margin. Another strategy of gaining a competitive edge, coca cola aims at producing different drinks by modifying its ingredients slightly. They can also increase the quality of their products and charge slightly higher prices to cover additional costs of production due to the changes. This increases the company’s chance of winning customers confidence.

The company also aims at rebranding their products, its cans, bottles and their labels. This is set to realize more sales. Also, consumers with special needs such as the obese and the diabetic people, the company aims at innovating products that satisfy their needs, such as low sugar and fat content. Another strategy is reducing the price of its products. This can be achieved by minimizing production costs. Hence, the products can be sold at a low price which is equal or close to the market price. Moreover, coca cola aims at investing resources in promoting its brand and products through advertising, sales promotions and public relations. This is done through the media such as the televisions, radios, and billboards, not also forgetting the social media. It is done to urge the customers to try a new product or buy more of an old product.

To examine the effectiveness of the above strategies, measurement guidelines are set so as to have a performance scorecard. One of the guideline set is measuring the ratio of input to output. This determines productivity and cost effectiveness. It is known as efficiency measures, and an example is comparing the cost of a batch of resources used to produce a soft drink and the returns of that specific batch. With strategies in place, goals are set, for instance, having a certain amount of turnover annually. Outcome measures see to it that these goals are achieved. Coca-Cola also aims at producing quality products. Quality measures show improvement in compliance, accuracy, and competence. An example includes an audit conducted that are within a range of accuracy.

Project measures are used to measure any progress in an initiative that has a terminus. For instance, if coca cola has launched a new product and to gauge the consumer’s response, they only produce and sell a particular amount of the product. To determine the customers’ response to the product, the percentage of the already sold product is used in comparison with the time it sold. Also, the addition of new customers is a measure of the company’s effectiveness. This could be evident with an increase in the number of suppliers or increased demand in department stores and shops.

The efficiency measures enable the company to note any variations that may occur within the production of the product and its sales. As a result, the company can combat these changes before they cause adverse effects in the company. Its findings are recorded and are later analyzed. These data can be used in the future in making informed decisions or formulating strategies. The ratio of output to input enables the company to gauge its efficiency and its financial status. This is because, if the input cost is more than the output, then the company is running losses. However, if the output is more than the input, then the company is incurring profits, and hence, the company should aim at sustaining it that way.

Furthermore, the progressive measures keep the company’s activities in check so that its strengths and weaknesses are noted. The information obtained helps the company in innovating ways of combating the weaknesses and maintaining its strengths. Outcome measures findings gauge if the implementation of the strategies has enabled the company to achieve its goals. In case some goals are not achieved, then the management has to formulate other strategies and plans that would help the organization achieve its goals. Therefore, the measurement guidelines aids in determining the progress of the organization and any faults which need to be altered. In conclusion, strategic management plan is an effective way of managing an organization since it pinpoints the organization’s faults which need to be corrected and any possible opportunities that the organization can venture.

References

Hill, C. & Jones, G. (2010). Strategic management theory: an integrated approach. Boston, MA: Houghton Mifflin.

Ireland, R., Hoskisson, R. & Hitt, M. (2008). Understanding business strategy: concepts and cases. Mason, OH: South-Western Cengage Learning.

Labitan, B. (2012). Moats: the competitive advantages of Buffett & Munger businesses. United States: Lulu.com.