If we told you that Coca-Cola had operating units in 50 countries around the world, you probably would not be surprised. If we told you that Coca-Cola had been in business for almost 125 years, you probably would not be surprised. So, you tell us … how many different beverages does Coca-Cola produce? 100? 500? 2, 000? Are you surprised yet? Worldwide, Coca-Cola produces an amazing 2, 800 different beverages.
When an organization is that big, has that sort of worldwide presence, and boasts what is perhaps the most well-known brand ever, you can bet that a multitude of IT systems are constantly churning in the background, not only keeping the organization running, but also keeping it running ahead of the competition.
To support internal collaboration efforts, Coke created something it calls its Common Innovation Framework, a Web-based system that combines project management capabilities with business intelligence. Using the Innovation Framework, anyone from any of the operating units worldwide can search for, find, and apply concepts, strategies, development successes, and marketing approaches that have been used elsewhere in the organization. For example, when introducing Georgia teas in Australia, the Coke people Down Under can research what marketing strategies worked well in related countries such as New Zealand. As Jean-Michel Ares, Coke CIO, explains if, “Once you have aggregated the pipeline of innovation, the object is to assess and prioritize the best allocation of resources in the organization.
Beyond internal employees, Coke is reaching out with new and innovative IT steps. Recently, it rolled out a new line of software services based on hundreds of business processes to its extended family of bottlers. These software services each perform a specific common business function and run within SAP’s ERP software and are delivered by Coke’s IBM hosted date centers. The goal is to create a standardized business and technology platform across all Coke bottlers, most of which are independent franchises. (There are some partly owned by Coke) If Coke and its bottlers are speaking the same language, so to speak, and using the same technology, then supply chain management applications will be the more efficiently streamlined. Standardized in their case equates to saving money by reducing expenses associated with supply chain activities.
And even beyond its extended family to bottlers, Coke is using technology to create loyalty and engage more with its customers. Its award winning Web site, My Coke Rewards at www.mycokerewards.com, is the second most popular consumer packaged-goods site, behind only www.kraftfoods.com.
My Coke Rewards attracts some 300,000 visitors per day. Offering everything from magazine subscriptions to electronics as prizes (just look under your bottle cap). My Coke Rewards has reconnected Coke with its loyal drinkers. The site has teamed with pop culture crazes such as American Idol, soccer, and auto racing to bring even more consumers into the fold. You can even find Coke-labeled songs through iTunes.
1.Describe the various IT-enabled initiatives discussed in this case study and categorize them as either above-the-line, below-the-line, or some combination of the two.
2.Why is standardization so important in supply chain management? Coke is developing its own set of software services for bottlers to use. Do you think Coke charges the bottlers for these software services? Why or why not?
3.Describe two different forms of e-collaboration in this case study. For each, articulate the benefits to Coke.
4.How is My Coke Rewards an example of a switching cost? How can a switching cost not have a monetary penalty associated with it.
5.Referring to the diagram below, what do you believe to be Coke’s overall organizational structure? Why? How does Coke’s use of technology support your decision?
6.What sort of business intelligence could Coke gather from its My Coke Rewards Web-site? How could it use this information for customer relationship management activities?
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