Week 5 final

Strategic Plan Part III

Lauren Rudolph

University of Phoenix

Linda McKee

BUS/475

October 16, 2017

Strategic Plan Part III

In order to improve the internal function of a proposed new division, Coca-Cola management has a plan to draft a balanced scorecard. A balanced scorecard is a performance metric used to identify and improve internal variables of an organization (Kaplan, & Norton, 2001). The balanced scorecard of the new division will be based on four key areas. Those key segments include shareholder value perspectives, customer's value perspectives, process perspectives and learning and growth perspectives. The new division proposes a new product in the water product line. This product has more health benefits to consumers and it will help to change that perception customers have towards the company product. Also in this section, the company strategic plan will include risk associated with a change in the management plan and company responsibility to the society.

The strategic objectives of the Coca-Cola Company are composed of four sections. Those strategic objectives sections include financial, customers, operational and people strategic objectives. Financial or shareholder strategic objectives identify measures the company plan to put so that it may improve revenue collection. Coca-Cola has large market share and therefore the new division proposed a product which seeks to improve the health status of its consumers which in a way will increase the market share. The company SWOTT analysis identified several trends in society whereby people nowadays are more concern about their health. People prefer to spend more on a product which is healthier than before.

Due that perception people have over healthy products, the company targets to increase its market share with around 5 percent each year. By the end of the year, the company sales revenue target will increase with high margin because the market targeted is large enough to promise a good return. The product will be priced higher than the current brand because of the health benefits contained in the product. Therefore, due to that pricing strategy, the company will be able to record improved profit margin. The SWOTT analysis identified some strengths and opportunities the company has which can help to reduce operational cost. For example, the company plan to use technology in order encourages user-generated ads.

This marketing strategy will reduce cost related to marketing expense because the company will use the existing customers to markets its product whereby the customers will be encouraged to sharing a picture of the new brand to their social media or take part in a competition by sharing a picture of the new brand. The participant who will emerge a winner will get a prize. In the last financial year ended December, 31st 2016, the company incurs selling and general administrative cost of $16,772,000. Therefore, using technology as an advantage the company will be able to reduce the selling cost by 10 percent. The marketing strategy will also increase brand awareness and sales.

Coca-Cola Company has put several measures of improving customer's retention and customer's satisfaction. One of the measures proposed is the introduction of new product. The new division product will help to increase customer's retention ratio because customers will have a variety of brand to choose from. For example, the product being proposed will improve customer’s well fare and therefore customers will feel more satisfied. The division SWOTT analysis identified some of the strengths as having a unique product which has beneficial mineral and other benefits to customers. These benefits will offer value to customer's money because it will solve more health issues than normal water.

The company has put several measures to improve production processes. For example, the company plans to take advantage of technology in order to improve supply process. Improving supply process will shorten lead time. Having efficient and effective supply process the company will be able to cut cost related to forgone sales due to delayed supply. Also, the company will make internal communication more effective in order to create a good relationship, loyalty, and trust. Technology is key variables which will make the division communication processes more effective.

The division has an advantage of existing production machines used to produce Dasani water and therefore the division will modify the production departments as a way of monitoring quality. Also, the company plans to implement a promotional plan in order to increase business. For example, brand awareness and sales can be boosted if the division implemented effective's promotional plan where retailers will be given a discount in order to locate the product in a close reach for fast movements.

The company has come up with a strategic measure of improving employee satisfaction whereby the company plan to involve employees in decision making. For example, whenever a company needs new ideas about product development, the company wills sources the idea internally as a way of creating employing motivation because they will feel being part of the company welfare. As well the company plan to improve employee’s welfare by paying them well and also giving bonuses for best performance whenever sell revenue increase. Through offering bonuses employee satisfaction will increase and retention level. Employee coordination with management will improve the company capability and productivity.

The division faces various risks such as strategic risk, compliance risk, operational risk and reputational risk. Strategic risk includes a scenario whereby a company product line may become obsolete if consumer preference changes (Kaplan, & Norton, 2001). For example, the company existing brand may suffer if the new division product gets more market acceptance. In order to make the product line still relevant, the Coca-Cola management should increase advertisements on that particular brand to increase demand and awareness in the markets of modifying it. The new division product may face risk related to compliance.

For example, if the company fails to comply with an institution which controls standardization of product. In order to avoid that, the company will find all legal requirements needed for production. Operational risk may arise when a transport system fails hence affecting product delivery. The organization can avoid this kind of risk by putting measures which will act a backup plan or have safety measures which can deal with an incident like fire and have insurance cover. Reputation risk may be caused by a law suit for example when the company fails to honor union's agreement.

Balance scorecard identifies key areas which need improvement in order to improve productivity. Stakeholders include parties like shareholders, employees, suppliers, creditors and other and all are impacted by balance scorecard in one way or the other. For example, balance scorecard tells employees what they should achieve by certain period if a certain portion of resources is effectively utilized. Shareholder use balance scorecard to analyze the trend and performance of the company. Performance of balanced scorecard helps an organization realize that they are on the right track towards achieving the company goals and therefore shareholder wealthy will be maximized.

The company may be exposed to unethical behaviors more so to issues relating to suppliers and when a company plan to find the mechanism of improving profitability. Coca-Cola Company has a business code of ethics which guide employees and managers on how they have to conduct themselves but in most cases, the managers violate the code of conduct policy in favor for company profit generations. On another hand, the company is required to act ethically by being socially responsible to the society. Socially responsible means that the company takes part in charity work. The company will use written methods to communicate its stakeholders and the information flow should be downwards or upwards and sideways.

Downwards mean that information will originate from the head of departments. The sideways flow of information involves consulting the other departments for example when procurement department's information flows to finance departments. Upwards information flow is the feedback junior staff brings in to seniors staff. For example when a team of sale force return from the field they have to submit a report to the marketing manager then the marketing manager will share the information with the finance manager. Therefore the company plans to use downwards information flow, sideways and upwards to ensure the company communication process achieves the intended targets.

Reference

Marketing Communication. (2001). Taylor & Francis.

Chan, L. K., Cheng, S. W., & Spring, F. A. (1988). A new measure of process capability. Journal of Quality Technology, 20(3), 162-175.

Fritzsche, D. J. (1991). A model of decision-making incorporating ethical values. Journal of Business Ethics, 10(11), 841-852.

Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization: How balanced scorecard companies thrive in the new business environment. Boston, Mass: Harvard Business School Press.

Van, G. W. (2004). Strategies for information technology governance. Hershey, Pa: Idea Group Pub.