growth, growth, growth!
in 2018, the Nobel Prize Committee awarded the economics prize to Paul M. Romer. Romer is the founder of the new growth theory. His endogenous economic growth model includes the factors of knowledge and human capital, and emphasizes the great role of innovation, so as to get rid of the theory that economic growth is determined by the natural growth rate of population in neoclassical growth theory.
on August 28, 2020, Coca Cola officially announced its restructuring. With the help of technological innovation, digital transformation and management reform, Coca Cola has adjusted its organizational structure and is committed to reshaping the Coca Cola system, so as to further promote the “whole category beverage” strategy launched three years ago.
has to mention that, until the fourth quarter of 2019, Coca Cola has achieved or exceeded its long-term development goals for the tenth consecutive quarter. Like other industries, the sudden outbreak of the new crown has disrupted the pace of development of the company to a certain extent. Although the announcement of the reorganization is not an overnight decision, but the direction confirmed by the company after continuous lean and Digitalization for several years, the epidemic has accelerated the progress of organizational transformation and once again reflected the determination of management to change.
however, when natural population growth and emerging markets are no longer an important engine for business growth, what are the potential growth opportunities?
these opportunities are actually contained in the refined operation, one is to compete for more consumers in the stock market, the other is to compete for the proportion of “8 bottles of drinks” per day for individual consumers, which may be composed of any one or more products in tea, coffee, nutritional drinks, juice, milk, plant drinks, bottled water, etc. To achieve this goal, we should not only rely on product innovation, but also use digital tools to understand the consumer’s “one person, thousands of areas” needs, and the related knowledge, human capital and innovation are the sources of new growth.
all companies are facing a challenge that can not be ignored: retail upgrade. Industrialization brings the advantage of production scale, but informatization brings personalization and diversification, which brings challenges to Coca Cola’s traditional production and service mode.
In the future, Coca Cola will face not only the management of 27 million customer outlets in the physical world, but also a 1.3 billion + consumer terminal composed of the physical world and the virtual world. No matter which port they appear in, what Coca Cola needs to do is to turn every purchase into an experience and become the starting point of the next communication, which requires a highly sensitive and flexible Living tissue and body.
should be moved according to the situation.
“the Chaozhou fungus does not know the obscure, the Squilla does not know the spring and autumn.” The advantage of a century old enterprise lies in the fact that it has experienced four seasons and is accustomed to changes in the environment. There is a saying in Coca Cola company called “kiss the past hello”, which means summing up the success and failure of the past and guiding the way for tomorrow. This is contrary to the cicada, who only knows the present and does not foresee the future.
always attracted those who were eager to change at first, and then gradually became a trend. Those who were conservative gradually declined because of losing power. This is happening in the migration of digital civilization.
as early as a few years ago, the Coca Cola company has been embarking on the “digital migration”. Companies not only use data to understand who is talking about their products and where they are talking about them, but also use it to publish relevant content at the right time and to motivate consumers to participate in content creation. The company found that in almost all brands, consumers create more stories than companies create. The key driving force behind dynamic stories is technology. After the research, the consumers and the consumers are connected to each other to find out the emotional connection.
Coca Cola company has a lot of data on hand, which comes from sales terminals, vending machines, production and distribution channels and user feedback. In fact, Coca Cola is one of the early adopters of big data to guide strategic decisions.
- Experience transformation: create more personalized experience for consumers and retail customers;
- Operation transformation: with the help of data and technology, some processes are accelerated or removed from the company, and finally the operation obstacles are removed;
- Business transformation: before the external factors force the company to change, the internal first subverts;
- Cultural Transformation: tear off the label of traditional consumer goods companies.
layout in the future, a new strategy, a strong rise.
has a history of more than 130 years from this shore to the other shore, from now to the future. What kind of reform blueprint has Coca Cola Co., which can “learn from the past and know the present”?
Figure 1: growth journey to the next stage
company is planning to reduce the brand. The outbreak of the new crown epidemic is a good opportunity to streamline the brand. The company has eliminated the bad performance of low sugar tap water and Zico coconut water, and also eliminated some zombie brands. In turn, some core brands and core SKUs were strengthened during the outbreak. This year, even at the peak of the epidemic, Coca Cola’s performance in the Chinese market is very impressive. The company focused on the soda category, which increased by 14% in the second quarter, of which Coca Cola Brand performed the best, and the sales of Zero sugar coke increased significantly. In addition, Coca Cola has continued to promote the strategy of “all kinds of drinks” in the Chinese market, and has made considerable progress in new product research and development, category expansion and channel development. In the second quarter of 2020 alone, more than 10 new products have been launched, including Costa ready to drink and capsule coffee products, innocent fresh fruit, etc.
Coca Cola, said, “reducing brands is to drive influence and growth, continue to follow consumers, and purposefully determine which brands are worth investing in.”
Coca Cola company divides the brand into three levels – “Explorer”, “Challenger” and “leader”, which are an organic combination. In the future, all brands will sprint to the position of “leader”. However, the company will cultivate some “explorers” brands with opportunities for the future market and form a brand echelon with growth. Whether it can become a real quality “leader” brand, explorer must pass the test of “Challenger” stage. The success standard of
“Explorer” is its rapid growth, which can quickly obtain the recognition of consumers and set off waves in a certain field. The standard of Challenger’s success is to gain enough market share and have the potential to become a “leader” over time. The brand that can become a “leader” not only has scale, but also has economy and profit. “Our goal is to build a wide range of ‘leader’ brands, and choosing the brand that is given priority ensures the best return for the same amount of time, money and effort,” said Zhan kunjie
02 implement the strategy of “innovation and justice” to improve the marketing effect
with the deepening of innovation, Coca Cola constantly improves the standard of innovation — recruiting new consumers, increasing consumption frequency or increasing profit margin.
globally, Coca Cola is seizing some sustainable opportunities, such as high potential investment opportunities for sugar reducing products in some regions, and double-digit retail market share of AHA flavored bubble water in the US market in the first 18 weeks. With consumers’ emphasis on health, safety and hygiene, innovative tracks have emerged in terms of functional and contactless solutions. Coca Cola will put its products, packaging and equipment at the heart of innovation. In the United States, contactless beverage devices have been launched. Consumers operate on their mobile phones and drink out in seconds without creating an account or downloading an app.
03 enhance revenue growth management capability (RGM) and execution capability
is offering a variety of budget products through market segmentation. There are various ways to manage revenue growth, either through more profitable channels or by providing high-end packaged products to create value.
revenue growth management is not only a price problem, it involves providing a series of solutions for consumers in all aspects of the value chain, so as to maintain and expand consumer groups. For example, the introduction of refillable products in Latin America, and the introduction of products larger and smaller than 500ml coke packaging in Japan. It also includes helping bottling partners build quick response capabilities, and helping grocery stores, small independent stores and various food service stores to resume business.
Coca Cola’s digital capability is aimed at establishing Omni channel sales, efficiency and data analysis. In the second quarter of this year alone, mycoke digital platform added 8000 terminals in the United States to provide contactless services to customers. Latin America is trying to build a digital home service platform for consumers. Orders are placed on the same day and can be reached the next day. Today, more than one million home users have gathered on the platform, and double-digit growth has been achieved.
04 enhance system collaboration and enhance supply chain efficiency
05 organizational evolution, investing in new capabilities
Internet Organization is that data and resources flow in each node, everyone can create and share, and get through the internal and external cooperation of the organization. Although the company’s growth is accelerating after a series of challenges in the coming 10 quarters, the company’s growth is accelerating after a series of challenges. “We need to focus on Disruptive Innovation This is a great opportunity for us to speed up the management of our portfolio We believe that when we come out of this crisis, we will build a stronger brand. ”
service strategic objectives, advance to interconnected organizations The traditional pyramid like hierarchical organization is being disintegrated, which is derived from the intensive division of labor and large-scale mechanized production in the industrial age. The emergence of interconnected organizations or network organizations makes enterprises become a dynamic network composed of many knowledge nodes and feedback nodes, accelerating the response to the market.
the Internet Organization planned by Coca Cola has the following characteristics:
operations division is a highly interconnected organization with a focus on regional and local execution. The original 17 business units will be reduced to nine new operation divisions. The newly established operation divisions are highly interconnected, more consistent in structure, avoid waste of resources and promote new products faster.
Coca Cola’s Greater China region has become one of the nine major operating divisions. Vamsi Mohan thatI is president of Greater China. Wendi has more than 20 years of experience in Coca Cola’s system, and has held many leadership positions in operation, market execution and integrated management. Before that, Wendi was the president of Coca Cola’s South Pacific business unit.
, Coca Cola company will implement a more modern marketing model, reach consumers and fully interact with consumers, so as to effectively improve the effectiveness of marketing. The
category division and the operations division work together to promote innovation, marketing efficiency and effectiveness. The categories include Coca Cola, flavored soda, bottled water, sports drinks, coffee and tea, nutritional drinks, juice, milk and vegetable drinks, and other new categories.
in the previous organizational structure, Coca Cola belongs to the category of soft drinks. After the reorganization, Coca Cola will become a separate category in the category department. In the original organizational structure, the team responsible for the soda category devoted almost all their time to the Coca Cola brand, ignoring Fanta and sprite. If these two brands are in other companies, they can be the main products. However, in Coca Cola, they can only rank second and third in resource allocation.
at the same time, Coca-Cola will promote the above changes from the company level, which can continue to innovate locally, and focus on the best practice of scale effect in the world. To achieve the balance between standardization and agility, both of them are contradictory and unified. Organizations need to constantly review and summarize and optimize the process. They can not only find opportunities for agile innovation to implement and promote, but also use the strategy of “innovation and justice” to expand the scale capacity of this innovation, strive for market share, and realize the economic value of scale. The innovation pursued by Coca Cola company is a subversive innovation that can bring value to consumers, and it can also create large-scale economic value for the company. The
function is committed to providing strategic, management and scale services for global projects, including finance, human resources, legal, marketing, public affairs, corporate communications and sustainable development, strategic partnerships, and technology and innovation.
platform service organization this newly established platform service organization tries to provide shared service mode for companies distributed all over the world. It extracts some transactions from various regional operation business units and standardizes them in the platform service organization, so as to create more value. The functions of the platform service organization include data management, consumer analysis, e-commerce and social / digital center, some of which are jointly created by Coca Cola and bottling partners. The new platform service organization can not only serve Coca Cola company, but also bring more value to the whole system of Coca Cola company. As a whole, the new organizational structure is designed to enable future growth. After restructuring, the four departments will be highly interconnected, making Coca Cola a more agile and efficient organization. Since its establishment in 1886,
Coca Cola company has been in the growth stage after more than 130 years of development, which has to be said that the company attaches importance to the gene of sustainable growth. “Everyone on this planet has the right to work with Coca Cola and re imagine the word” experience, “said James Sommerville, vice president of global design at
. It starts with packaging, products, and looks to further develop the story from history. ” “Coca Cola is a transformational company, and digitalization enables us to bring these experiences to the public on a large scale, which requires technology,” said Goldman, chief digital officer of
. In the end, we see the future as a company created with consumers. ”
from the beginning of human origin, virus and human coevolution, nature in the destruction at the same time is also creating. There is no doubt that after the crisis, the world will be different and the future will come faster than ever. The organization reengineering started in 2020 may be the starting point for Coca Cola in the next century.
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