Managerial Economics and Strategic Analysis Student`s

ManagerialEconomics and Strategic Analysis

TheCoca-Cola Company

TheCoca-Cola Company is a renowned beverage manufacturing, supplier andmarketing company of non alcoholic drink concentrates and syrups(Pendergrast,2013).The company is well known and recognized by its flagship brand Coca–Cola. The drink was invented in 1886 by a pharmacist named JohnStith Pemberton. Apart from Coca-Cola brand, the company also makesover 400 other brands and is operational in many number of countriesglobally(Pendergrast, 2013).Conservative estimates project the company reaches out to some 1.6billion servings every day. Despite of stiff competition from othercompetitors and bias attitude of some governments, the company hassteadily remained a market leader in the beverage industry.


Organizationsstructures themselves according to the volume and nature of theirmarkets. Irrespective of whether the organization is small orexpansive, the organizational arrangement and the division of laborwithin the company are exceptionally important and have beenperceived to be among the key stepping stones to sound businesspractice(Hill, 2012).

TheCoca-Cola Company organization structure has a distinct, separateinternational division arrangement. This is because the company’sinternational staffs work separately in total isolation from the headoffice (Hill,2012).The company has a number of divisions in all continents that it hasoperations. Within each division, there are presidents who overseeand manage each of these continental divisions (Hill,2012).Presently there are 5 such divisions. The company opted for such adecentralized structure because it realized the dynamic nature of itsconsumers. By permitting key decisions to be made at a local level,the company can quickly react to changing market demands(Pendergrast,2013).This kind of organization structure has its fair share of troubles inthat, due to its tall structure, the company has been dogged bycommunication problems (Hill,2012).This scenario impacts negatively of the motivation of employees.

Theneed for balance between rewards, culture, and boundaries

Internationalhuman capital management presently has become a controversial concernin the globe today. Hence, due to the nature of this complexity isimperative to have the right staff for the right position(Trompenaars, 2012).This is not a new phenomenon for the Coca-Cola Company. Over the yearthe company has been able to develop an intricate compensationdelivery system that incorporates components such as job evaluation,base salaries among others (Trompenaars,2012).Variable compensation outcomes such as rewards are basically tied toevaluation on a critically distinct metrics. This ensures theelimination of biasness when rewards exceptional staff for theirwork. The Coca-Cola Company recognizes the impact of cultural andgeographical boundaries in regions that it operates (Hays,2005).Consequently, the company continues to cultivate and establishpositive working environments that incorporate region cultures andcustoms. The recognition of the existence of cultural variationswhere such variations exist is the initial step towards businessgrowth.

Theelements of effective leadership

  • Diversity mission

Thecompany’s worldwide mission is to match the rich diversity thatcharacterizes its market. The company seeks to be, recognized for itsleadership in advocating for diversity and inclusion in all itsoperations(Hill, 2012).The company seeks to have staff, suppliers and community that reflectthe face of the whole world. This inclusive culture is well definedby the seven core values of the company, namely integrity, passion,quality, collaboration, accountability, leadership and diversity(Hill,2012).

  • Education and training

Thecompany strongly advocates for continuous staff training. The companyalso emphasizes the need of its staff to constantly advance theireducation level so that they don’t become redundant. With educationand training all staff are able to learn new methods and techniquesthat help them perform their work effectively (Hill,2012).Additionally, with the dynamic nature of present technology it isimportant for staff to operate uniformly in all continentaldivisions.


Thecompany aims to lead by example therefore it has laid out highstandards for all their staffs at all levels. The companies areguided by these conventional standards of governance and ethics(Trompenaars,2012).


Thisprogram is managed by the corporate reputation council. The councilrecognizes risks or opportunities that face communities around thecompany and recommends tactics that would help address suchchallenges (Trompenaars,2012).For instance, the company sponsors a regional soccer tournament inAfrica in order to help young talented individuals grow and developtheir skills (Trompenaars,2012).

Typeof risk the company took

Thecompany first introduced a reformulated Coca-Cola flavour commonlyreferred to as “new Coke” which represented the first attempt inalmost 99 years of the Cokes existence. This caused public outrageand protests (Hill,2012). The protests ended when the company reinstated the old formula. Thecompany was then capable to change their experience of reformulatingcoke into a success by acknowledging its errors (Hill,2012).

Typesof strategic control

Thecompany employs a play to win strategic control system that isentirely based on the company’s four strategic essentials namelycustomer preference, community trust, customer relevance and costleadership (Hill,2012).This coupled together with unmatched and highly talented performancemindset, play a vital effort in helping the company attain itsobjective targets (Hill,2012).

Importanceof Managerial economics

Thestudy of managerial economics has only emerged over the past fewdecades. With vibrant and growing unpredictability of businesssettings, business managers are now more concerned with establishingfeasible ways of regulating an exploiting environmental change(Boyes, 2011).Managerial economics basically refers to the incorporation ofeconomic theory to business operations. Managerial economics can beseen as economics been applied to facilitate problem solving inorganizations(Boyes, 2011).

Itis important to understand this topic in today’s corporatestructures since decisions that managers make are the determinants ofsuccess or failure of any company. Business decisions currentlydepend on the limits imposed from factors operating outside theeconomy (Boyes,2011).For this reason managerial economics provides a concrete foundationof economic comprehension in order for managers to arrive at informedand carefully analyzed verdicts. Also managerial economics adds tothe lucrative growth of a business and efficient problem solving byaltering the economic scenario to a viable business prospect (Boyes,2011).

Howdo managerial economics fit into your topic?

Managerialeconomics fits into this topic since the sole aim of any company ororganization is to make profits. With profitability, future growthand development is guaranteed. For instance, a company like Coke-Cocahas been able to be in existence for decades due to the outstandingnature of top level management capacity to make sound decisions thathave translated into persistence profitability (Boyes,2011).We have seen that managerial economics helps mangers arrive atpractical decisions that help drive a company to success. Hence, Iprofoundly believe that managerial economics fit effectively in thistopic. Management economics helps firms to identify a potentialmarkets that a company can venture into, helps to clearly assess thecapacity of investible funds and setting up sales promotions.


Boyes,W. J. (2011).&nbspManagerialeconomics.Boston, Mass: Houghton Mifflin.

Hays,C. L. (2005).&nbspThereal thing: Truth and power at the Coca-Cola Company.New York: Random House.

Hill,C. W. L., &amp Jones, G. R. (2012).&nbspStrategicManagement.Cengage Learning.

Pendergrast,M. (2013).&nbspForGod, country and Coca-Cola: The definitive history of the greatAmerican soft drink and the company that makes it.

Trompenaars,A., &amp Hampden-Turner, C. (2012).&nbspRidingthe waves of culture: Understanding diversity in global business.New York: McGraw-Hill.