Question:
Examine the possible advantages and difficulties in integrating your sustainability portfolio into the company’s strategy.
The company’s motive is to provide the right products ensuring certain health and hygiene standard to serve the customers with utmost priority. Coca Cola HBC aims to surpass the consumer expectations by providing the right product in the right pack accessing the right channel for faster delivery to serve the customers in a better way. The product they offer is fresh in premium conditions maintaining the highest quality standard.
Building long-lasting relationship with the client is the fundamental and the key to the success of the company. The company has taken a customer-centric approach to remain focused on customers’ needs and satisfaction. Therefore, it strives hard to exceed the expectation to ensure timely delivery of the product and has developed the best supplier chain to manage large distribution channel in the world. Thus, the company has created value while delivering the best customer service (Oberseder et al. 2014).
Coca Cola aims to build trust in the community where it operates. Its fundamental business is based upon trust. Hence, it intends to build the sustainable relationship with the shareholders, customers, employees; business partners achieved through responsibly managing the business. The company has been focusing on corporate responsibility and sustainability statement in the business process for the more than a decade. Moreover, the company has identified social issues and consulted with the stakeholders and developed strategies to generate value and commitment towards stakeholders to minimize the negative impact of the environment. The company has set long run target to serve the customers and has taken the responsibility towards creating sustainable environment (Aguinis and Glavas 2012).
The products are the part of the active lifestyle that involves a regular physical activity. The obesity which has increased significantly, the company has exerted its effort to balance the body weight by physical activity and healthy living. The Coca Cola company has declared a series of commitments that it aims to achieve by 2020 (Richards et al. 2015). It includes
The company has announced four key commitments in 2013, which the Coca Cola HBC a part of Coca Cola system plans to achieve by 2020. It has offered low or no-calorie drink in every market and has provided a wide range of products, more diet such as Sprite and Nestea with Stevia that contains less calories. Communicating the calorie values in the product, it helps the customers to make the wise choice regarding the product. It displays key nutritional information on the front of the bottles and cans. It provides the physical activity programs in many countries where it runs the business (Dhaliwal et al. 2012).
The company offers the wide range of sports and fitness activities across 28 countries collaborating with Government agencies, sports and nutrition experts and peers hence helping people of all ages to stay physically fit and encourages healthy living (Epstein and Buhovac 2014).
Obesity which has become an acute problem in the community its marketing and sales activities identified the responsibility to protect the future of a nation. Its promotional activities don’t target the audience where 35 % consists of children under age 12 years old. The company does not support any commercial activity in primary schools (Conradie et al. 2016).
Coca Cola reduces the environmental impact on the total value chain by
The commitments of the company are towards sustainable packaging, energy management, protecting the climate and preserving the water bodies. Company’s water programs suggest healthy water bodies, sustainable programs to balance the water utilized in the production process. The commitment towards responsible citizen includes preserving the natural resources such as soil, water and climate to create the sustainable environment (Delmas et al. 2013).
The company has aimed to focus on the commitments and its commitment towards sustainability by 2020. It has acknowledged the importance of comprehensive governance and ensures compliance by minimizing risk across the value chain (Korschun et al. 2014).
Coca Cola has identified the corporate social responsibility and established a sustainability framework in the business. Coca Cola Hellenic Bottling Company has made corporate accountability and sustainability an integral part of a firm that guides decisions and long-run investment that ensures lasting value. The business strategy of Coca Cola is based on sharing costs with all the stakeholders such as customer, consumer, communities, employees, shareholders. The sustainability framework builds on the shared vision “Me, We, and the World. “Me” signifies company’s strategy to promote the well-being of the community who enjoys the brand every day and the name has become an indispensable part of their lives. By “We” it suggests the way it intends to create a better future for the local community by raising the standard of living. “World” conveys the message of sustainability to protect the natural resources in different regions in the world (Hahn 2013).
The company aims to reduce carbon footprint by reducing the level of energy that people consume and becomes a leading company in climate protection. Moreover, the company seeks to create safe and fair working environment for the employees by implementing programs that help personal and professional development. Its sustainability statement includes establishing a water management system, to reduce water footprint by reducing the usage of water per product in operation (Dauvergne and Lister 2012). As far as company’s product responsibility is concerned the purchase, production, and marketing department follows sustainable corporate governance, therefore, has achieved success to generate surplus value in the entire value chain. In addition to that, the company has minimized the adverse environmental impact of packaging and has become successfully recycled the material used. In this way, the company has emphasized on the sustainable development of the community by contributing to the social welfare of the society (Asif et al. 2013).
Though company’s sustainability campaign has faced severe criticism for example in India, a NGO Center has come up with the report in 2003 that has presented samples of products sold in India containing pesticides to an amount that exceeds European Standard, which has been sharply criticized by public and hence affected the revenue of the company. They have further criticized the company for using a significant amount of groundwater. Furthermore, the Kerala state Government in March 2010 has fined the company’s subsidiary around $ 47 million as it has damaged the soil and water. Consequently, the annual sale is dropped by 15% in 2003. Charges are brought against Coca Cola for giving importance to increase profit instead of the public health that has stopped to access the Coca Cola products in many American Universities (Benn et al. 2014).
When the economy faces a downturn, the high prices impact the product. Moreover, too many intermediaries result in delivering inefficient services. As a result distribution cost rises and the consumer bears the cost regarding higher prices (Karnani 2013). This is one of the major challenges faced by the company in their business. In the recent few years, the prices of the products of the company raised. In some areas the company has faced significant level of fall in the sale of the soft drinks.
The company invests the huge amount of money in advertising and sales promotion. Many have criticized that company’s promotional activities only adds psychological appeal rather than adding value to the product (Dorfman et al. 2012). In the recent few years, the advertisement costs have been raised to a very high level. Mainly the video advertisements in the TV channels have become very costly. Therefore, the company is investing a significant amount of money for the promotional strategies. The company is also providing some rewards and special offers to their customers which are resulting in more expenses in the promotional activities of the company.
When the enterprise adopts deceptive practices to make people believe that they will get more value from the products that they get by the false promotion that includes providing wrong information about the product and lurking the customers to the store that is out of stock. It includes deceptive packaging by offering incorrect labeling and using misleading terms regarding the sizes of the product (Vijayaratnam et al. 2015).
It has further emphasized the fact that high quality creates value and customer satisfaction by creating the sustainable customer relationship.
It focuses on the poor product quality and the little benefit to the consumers and the negative element in the product that is the high-calorie product responsible for growing obesity (Berggren 2015).
It aims to focus on achieving efficiency in cost factors. The gross margin of the company has improved by 100% by 2015 whereas company’s operating profit has increased by the same amount. Though low inputs cost and negative foreign exchange has huge impact on the profitability of the company. However the company is focusing on the optimization of the production, logistics footprint, and operating cost.
It also highlights the way the company runs the business and continues all the activities to develop the relationship with the stakeholder. Its sustainability statement includes that the company is a going concern which is proactive and innovative enough to protect the environment and considered as one of the responsible corporate citizens by stakeholders. So it has included sustainability statement in the culture to achieve commitments towards a community. It has taken steps to protect the environment by minimizing carbon footprint and usage of water per liter of product produced and energy consumption. Moreover, it ensures providing highest quality beverages and a safe place to work, complying with workplace norms and regulation. By all these endeavors it impacts the community in a significant way therefore making all the employees and business partners proud regarding the goods and services. The company has evaluated all its CSR activities in 10 countries where the corporation has its presence and its impact on society, economies and o environment (Boulouta and Pitelis 2014).
The three strategic objectives of company’s sustainability statements are as follows
The company has reduced calorie in the products in 191 markets where it runs the business. Since 2014 it has been providing front-of-pack calorie information and nutrition labeling. Moreover, the company has supported healthy living programs in 112 markets since 2014. Its marketing strategy also highlights that it will not involve in any promotional activities that are directly affecting the children under 12. A recent survey has revealed that in 2014 the company has given back 13%of the operating income. The company has used 2.03 liter of water for producing each liter of product which has shown 10% improvement since 2010. It has focused company’s goal to use 1.7 liters of water to produce per liter of the product (Carroll and Buchholtz 2014).
Reference List
Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility a review and research agenda. Journal of management, 38(4), pp.932-968.
Asif, M., Searcy, C., Zutshi, A. and Fisscher, O.A., 2013. An integrated management systems approach to corporate social responsibility. Journal of cleaner production, 56, pp.7-17.
Benn, S., Dunphy, D. and Griffiths, A., 2014. Organizational change for corporate sustainability. Routledge.
Berggren, A., 2015. Empowerment according to whom? A critical assessment of Coca-Cola’s Corporate Social Responsibility initiative Parivartan (5by20) in India.
Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of Business Ethics, 119(3), pp.349-364.
Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-Economic Review, 10(1), pp.3-28.
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.
Conradie, C.S., van der Merwe Smit, E. and Malan, D.P., 2016. Corporate health and wellness and the financial bottom line: evidence from South Africa.Journal of Occupational and Environmental Medicine, 58(2), p.e45.
Dauvergne, P. and Lister, J., 2012. Big brand sustainability: Governance prospects and environmental limits. Global Environmental Change, 22(1), pp.36-45.
Delmas, M.A., Etzion, D. and Nairn-Birch, N., 2013. Triangulating environmental performance: what do corporate social responsibility ratings really capture?. The Academy of Management Perspectives, 27(3), pp.255-267.
Dhaliwal, D.S., Radhakrishnan, S., Tsang, A. and Yang, Y.G., 2012. Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), pp.723-759.
Dorfman, L., Cheyne, A., Friedman, L.C., Wadud, A. and Gottlieb, M., 2012. Soda and tobacco industry corporate social responsibility campaigns: how do they compare?. PLoS Med, 9(6), p.e1001241.
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Hahn, R., 2013. ISO 26000 and the standardization of strategic management processes for sustainability and corporate social responsibility. Business Strategy and the Environment, 22(7), pp.442-455.
Karnani, A.G., 2013. Corporate Social Responsibility Does Not Avert the Tragedy of the Commons–Case Study: Coca-Cola India. Ross School of Business Paper, (1210).
Kitzmueller, M. and Shimshack, J., 2012. Economic perspectives on corporate social responsibility. Journal of Economic Literature, pp.51-84.
Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.
Öberseder, M., Schlegelmilch, B.B., Murphy, P.E. and Gruber, V., 2014. Consumers’ perceptions of corporate social responsibility: scale development and validation. Journal of Business Ethics, 124(1), pp.101-115.
Richards, Z., Thomas, S.L., Randle, M. and Pettigrew, S., 2015. Corporate Social Responsibility programs of Big Food in Australia: a content analysis of industry documents. Australian and New Zealand journal of public health,39(6), pp.550-556.
Vijayaratnam, N., Rajasekhar, D. and Naik, N.B., 2015. Human Relations/Industrial Relations and Corporate Social Responsibility. Human Relations, 5(2).
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