Strategic Management (Essay Sample)

Adjustment of Coca-Cola’s research and development department
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Executive summary
Firms are adopting various changes in the organization of their research and development functions so as to address the continuous changes in consumer tastes and preferences across different markets. Most of these firms are adopting decentralized as opposed to centralized organizational structures in their research and development activities so as to gain from the characteristics of their local markets. Adoption of decentralized approach is vital in enhancing proactive management of the expectations of their consumers to enhance competitiveness. It also creates a suitable atmosphere for motivation and continuous learning for research and development teams. Such an atmosphere is crucial in entrenching a culture of creativity and continuous innovation in these teams.
Introduction
The need for a dynamic and innovative research and development department in a business entity cannot be overemphasized. The department is crucial in ensuring a company’s products and services remain competitive in the market and address the ever changing consumer tastes and preferences. The department works in collaboration with other sections of the business to further the business objectives through creation of innovative products and also improving the operational processes of the business. Some of the sections the research and development sections works in collaboration with is market research so that the innovative and creative features of new product developments can align with market needs. This paper addresses the levels of adjustment of Coca-Cola’s research and development department in regard to re-organization of its structure in order to address the current financial and economic challenges.
Theoretical background
The need for market expansion by firms has enhanced their ability to empower their research and development teams in order to align their products and service to consumer needs. The efficiency demonstrated by research and development teams is crucial in entrenching innovation and creativity in a firm. It means such a firm responds proactively to the tastes and preferences of their customers through development of elaborate models and trends in consumer behavior (Arora, Belenzon & Rios, 2014). Most of the global entities are focusing on adapting various decentralized research and development teams in order to enhance their ability of demonstrating uniqueness in developing products tailor-made for each of their markets. Such an approach entrenches a culture of autonomy and empowerment of each of the research and development teams since their main focus is their individual rather than the entire global market.
These individual teams also engage in various collaborative networks in areas involving product quality, marketing efforts and consumer satisfaction to ensure there is uniform delivery of an entity’s mission and vision across all its markets. These collaborative networks have been in effective in the development of corporate strategies and plans that are vital in delivery of the brand promise (Hsu, Lien & Chen, 2015).
Case analysis
Coca-Cola has established various research and development (R&D) centers in different regions around the world so as to ensure it responds to various consumer needs around the world. The company segments its market based on geographical, demographic, psychographic and behavioral aspects and then ensures its research and development programs are tailor-made to address the needs of each segment. The company’s different R&D centers are then interlinked through external technology assessment and acquisition hubs to enhance inclusiveness of major stakeholders in the development and attainment of the company’s objectives. The hubs ensure that the company’s R&D functions are interconnected with stakeholders such as entrepreneurs, business startups, and institutional research groups in areas such as universities and colleges in every region (van Beers, Berghäll & Poot, 2008). The decentralized nature of these research and development functions of the company ensures they are as close to the final consumer as possible so as to correctly gauge and determine their tastes and preferences.
The decentralization of the R&D functions of the company ensures each of the regional R&D centers is independent in addressing the various consumer needs based on lifestyles, income levels, cultural norms and beliefs and also tastes and preferences for each region. It demonstrates how decentralization enhances flexibility and fragmentation of ideas due to the closeness of the R&D teams to the consumers (Hsu, Lien, & Chen, 2015). Such closeness has led to the development of various packages of the company’s products so as to fit the varying consumer needs. The products of the company are packaged in small volumes such as 200 milliliters in regions such as Africa to suit the needs of most of the low income consumers in such areas. The company’s R&D teams in regions such as Europe also collaborate to increase the presence of vending machines for the company’s products in areas such as airports so as to enhance customer reach.
The company also appreciates that decentralization of its R&D functions is vital in reducing the hierarchical nature of functions. It makes most of these functions flatter in nature where regional R&D managers work in proximity to their teams and are in firm control of most of the teams’ activities. Such managers are in better control of their teams and the flat structure makes it easier to motivate and encourage the team members as they engage in various activities. It demonstrates the increasing capability of such decentralized teams in enhancing the innovativeness and creativity of their members due to higher efficiency in management of their activities.
The nature of Coca-Cola decentralized R&D functions are explicit through the immense roles in innovation and creativity the multinational accords its regional subsidiaries. The company, headquartered in Atlanta, concentrates primarily in the manufacture of syrups and concentrates that are imported by its subsidiaries for dilution, packaging and distribution to the respective markets. It is the duty of the R&D teams in each region to determine the most suitable product packages and marketing efforts to enhance competitiveness in their regions in line with overall corporate policy. Through its subsidiaries, the company ensures its internal know-how is protected and passed only to its subsidiaries through the centralized production of its concentrates. Such protection has been a major source of the company’s competitiveness in most of its markets through its product formulas that are a secret its competitors have not identified. There have not been issues of technology spillovers to the competition in the long period i.e. more than a century that the company has been in operation.
The decentralization of the firm’s R&D also accounts for the identification of local technology and market efficiency transfers. Such transfers of local knowhow are centered on consumer value proposition that is the key driver of most research and development activities carried out by the company. Such efforts have seen the company adopt initiatives such as the plat bottle technology where eco-friendly bottles are used for product packaging in line with environment sustainability efforts of the company (Coca-Cola, 2015). There is general concurrence amongst the company’s R&D teams across the globe of the need by the company to adopt sustainability in its production activities. Most consumers are increasingly being inclined towards businesses that embrace the need to conserve the environment and Coca-Cola is no exception.
In line with sustainability efforts, the R&D teams have been boosted through the partnership of Coca- Cola with the World Wide Fund for Nature (WWF) to enhance sustainability. Some of the key areas the partnership will address include climate protection where the company i.e. Coca-Cola will adopt measures to reduce the carbon footprint in the atmosphere through responsible production, packaging and distribution. The partnership will also address water efficiency at the company through introduction of recycling technologies. They will also focus on sustainable sourcing of raw materials such as cane sugar, soy, pulp, palm oil and other ingredients used in the manufacture of concentrates (Coca-Cola, 2015).
Decentralization of the research and development efforts of the firm has been essential in enhancing its ability to entrench cross-cultural competency in its marketing and product development efforts. The decentralized R&D teams are active in identifying the general meanings and interpretations of marketi...