Management and Innovation

The report aims to assess the innovation based needs of the Coca Cola Company and examine the recent capabilities and contingencies faced by the same while developing new products. It also explores the different stages of the New Product Development process in the organization.

Running head: MANAGEMENT AND INNOVATION
MANAGEMENT AND INNOVATION
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Executive summary
The report will aim at assessing the innovation based needs of the Coca Cola Company and
examine the recent capabilities and contingencies that might be faced by the same while
developing the new product. The research also enumerated the different stages of the New
Product Development process in the organization. On the other hand, the research also
enumerated the internal capability of the organization and recommended activities for upholding
the efficacy of the operations. Therefore, the purpose for undertaking the research is to delineate
the capabilities of the concerned organization while undertaking the innovation process.

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Table of Contents
01. Introduction................................................................................................................................3
02. Innovation..................................................................................................................................4
03. Framework.................................................................................................................................5
3.1 Definition...............................................................................................................................5
3.2 Diagram.................................................................................................................................7
04. Processes and operations...........................................................................................................7
4.1 Application to Coca Cola.......................................................................................................8
05. Human Resource and skills.......................................................................................................8
5.1Application to Coca Cola........................................................................................................9
06. Organizational structure and leadership....................................................................................9
6.1 Application to Coca Cola.....................................................................................................10
07. Competitive Strategy...............................................................................................................10
7.1 Application to Coca Cola.....................................................................................................11
08. Internal capability pertaining to innovation.............................................................................12
8.1 Strengths of Coca Cola........................................................................................................12
8.2 Weaknesses of Coca Cola....................................................................................................13
09. Gap Analysis............................................................................................................................13
10. Recommendations....................................................................................................................13
11. Conclusion...............................................................................................................................14
References......................................................................................................................................15

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01. Introduction
Management operations that are designed by organizations are dependent on needs of
gaining a competitive advantage. The major changes that are commenced by the organizations
are based on the assessment of the internal and the external environments. In this context,
Gonzalez (2014) noted that the strategies related to cost leadership and product differentiation
assists an organization in gaining a competitive edge in the respective economies.
The discussion will aim at understanding the innovative strategies that are planned by
Coca Cola in order to enhance the rate of customer satisfaction. The changing needs and
preferences of the customers have made it mandatory for the organization to induce strategies for
continuous innovation in the line of product offerings (Whelan & Fink, 2016). Therefore, the
concerned organization might take steps to develop a suitable innovative measure in order to
facilitate the uninterrupted operations of the systems. The research will delineate the overall
operations through the assessment of the changing needs of the customers. It will help in
identifying the process design and the minute factors that will contribute to the competitive edge
of the business while operating in diverse international markets.
The report will identify the innovation and the strategies that might be designed by the
same. On the other hand, the delineation of the resource and capabilities of the organization will
help in identifying the probable opportunities of the same. The research will also enumerate a
list of recommended actions that might be commenced by the concerned organization for
enhancing the operations.

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02. Innovation
Barlow et al., (2018) stated that innovation in the organization assists the same in
continuing the efficacy of the operations in adherence to the needs of the business. It has been
noted in a survey that more than 67% of the Australian population are health conscious and have
started avoiding carbonated soft drinks, which has become a growing concern for the business
(Aaron & Siegel, 2017). On the other hand, the different developments that are made by the
competitors have also affected the competitive edge of the business while operating in the
Australian markets. In this context, Coca Cola must take steps to develop a unique range of
product offerings for adhering to the needs of the customers. The concerned organization is
planning to introduce a low calorie and sugar free energy drink, which will aim at identifying the
different aspects of change in the organizational operations. The innovation will be helping the
concerned organization in gaining a competitive advantage over the other players in the markets.
Schram et al. (2015) noted that innovations that are commenced by the organizations are
dependent on the assessment of needs of the consumers and the manner in which the same might
be addressed. In this context, the current innovation will not only help the concerned
organization in continuing the competitive advantage but also help in adhering to the needs of
the health conscious target audience. It has been noted in a survey that around 1.2 million people
(5.1% of the Australian population) was found to be suffering from diabetes in the year 2018
(Macniven, Kelly & King, 2015). Therefore, the sugar free drink will help the concerned
organization in attracting the attention of the customers who are suffering from diabetes. The
product diversification and differentiation strategy will be assisting the concerned organization in
continuing the efficacy of the operations while adhering to the needs of the business sustenance.

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03. Framework
3.1 Definition
The new product development framework will be helping the concerned organization in
designing the processes systematically and thereby maintain the efficacy of the operations while
adhering to the needs of business sustainability. Hoekstra (2015) stated that the systematic
operations of businesses assists in supporting the innovativeness of an organization. In this
relation, the initiating stage of the new product development process is idea generation, idea
screening and concept testing, which will aim at assessing the needs of innovation while
adhering to the needs of the target audience. The assessment of the needs of the target audience
will be helping the concerned organization in generating the idea of the new product. The
growing consciousness among the customers relating to health and the growing rate of the
diabetic patients in Australia has mandated the concerned organization to create a drink with
lower calories and sugar free. The generation of the idea for the pro duct will be helping the
concerned organization in taking the required steps for managing the innovation process.
Business analysis is one of the major stages through which the capabilities of the
concerned organization are assessed for continuing the efficacy of the new product
development. Tedlow (2014) stated that the business analysis of the organization includes the
identification of the different concepts relating to infrastructural, financial and human resource
related capabilities of an organization. The stage assists an organization in continuing the
efficacy of the operations in adherence to the budgetary concerns and thereby facilitates the
uninterrupted operations of the systems in adherence to the needs of the business (Peng, Heim
& Mallick, 2014). After the assessment of the business capabilities, the product is developed in
the product development phase, which will help the organization in actualising the idea that was

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generated at the beginning of the process. Test marketing or pilot marketing initiatives are
commenced by organization in order to identify the feasibility of the product while meeting the
demand of the customers (Lawson, Krause & Potter, 2015). The test marketing phase allows
an organization in circulating small amount of the new product in the relevant markets for
assessing the capabilities of the pro duct in attracting the attention of the target customers.
Commercialization of the product is based on the assessment of the feedbacks from the
customers during the test marketing phase. It assists the organization in continuing the efficacy
of the operations while adhering to the future developments. Commercialization of the products
in the different markets assists the organization in generating revenue for the future processes.
Assessment of the market performance and gathering feedbacks from the customers assists an
organization in ensuring future modifications in the product offerings. Therefore, the total NPD
(New Product Development) process assists an organization in continuing the efficacy of the
operations in adherence to the concerns of the same.

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3.2 Diagram
Figure 1: New process development framework for Coca Cola
(Source: Created by author)
04. Processes and operations
The manufacturing and distribution operations are considered to be the major activities
that are commenced by an FMCG based organization. The different steps that are commenced by
organizations while manufacturing and marketing the products and services are based on the
assessment of the needs of the customers. Suitable delineation of the needs of the customers
assists an organization in continuing the efficacy of the operations in adherence to the goals. On
the other hand, the quality management initiatives that are commenced by the organizations
assist the same in upholding the brand name of the same. The enhancement of the brand image
will support organizations in upholding the competitive edge of businesses.

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4.1 Application to Coca Cola
The concerned organization has established an unique inventory management operations
in order to maintain the efficacy of the overall manufacturing and distribution processes. The
concerned organization developed a software named Track It which gathers information from
the Company’s mainframe database and thereby transfers the information to the different
terminals consisting of hand held laser scanners. On the other hand, the vending machine
contains a unique bar code, which is scanned and transferred to the Track It database for
supporting the initiative of the organization in managing the inventories (Thacker, 2017). The
concerned organization has also made use of a variety of TQM (Total Quality Management) for
upholding the quality of the products. Banks (2016) noted in a research that Coca Cola
company’s quality index rating was 94.5 which was dependent on the superior quality of the pro
duct offerings. The quality related operations of the business has helped the same in continuing
the efficacy of the brand image in the diverse markets. On the other hand, the innovativeness in
the inventory management mechanisms of the organization has helped the same in enhancing the
overall performance of the processes.
05. Human Resource and skills
The skilled human resource of an organization contributes to the uninterrupted operations
of the operations while adhering to the needs of the business. Serôdio, McKee and Stuckler
(2018) stated that skilled employees of an organization assists the same in enhancing the process
flows and the outcomes. The different strategies and decisions that are commenced by the
businesses are dependent on the participation of the employees. Skilled employees also help an
organization in enhancing the innovativeness of the same while operating in diverse global

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markets (Vargas, 2015). On the other hand, the different developments that are designed by the
organizations are dependent on the uninterrupted operations of the employees.
5.1Application to Coca Cola
The concerned organization has taken steps to undertake recruitment of specialized
employees who have knowledge on the processes. The recruitment of skilled engineers in the
organization has assisted the same in ensuring the quality of the products. On the other hand, the
favourable policies of the concerned organization helped the same in retaining the skilled
workforce. Retention of the skilled workforce and dedicated employees helped the organization
in ensuring the enhanced performance of the processes. The concerned organization has also
taken steps to monitor the activities and performance of the employees, which helped the same in
understanding the possible areas where change might be induced.
06. Organizational structure and leadership
`The organizational structure and leadership approaches help in exploring the culture of
an organization. Wilson (2014) noted that the induction of positive culture in an organization
brings forth modifications in the different processes. Moreover, Thacker (2017) noted that the
delineation of the hierarchy and the management approaches assists in identifying the manner in
which the organization aims at motivating the employees and design the working processes for
gaining a competitive edge. The organizational structure holds a complete overview of the
channels of communication, design of work processes, leadership approaches and the like, which
assists a venture in gaining a competitive edge. Therefore, the delineation of the organizational
structure and leadership roles help an organization in developing resources for the uninterrupted
operations of the systems.

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6.1 Application to Coca Cola
The concerned organization follows a decentralized structure through the implementation
of Strategic Business Units (Alauddin, Shah & Hasan, 2014). The strategic business units take
their own decisions while adhering to the modifications in the business environments in the
different economies. On the other hand, the concerned organization also follows a vertical
structure of management where the hierarchy is maintained in order to facilitate the
uninterrupted operations of the processes in a systematic manner (Iivonen, 2018). The vertical
structure of the organization also helped the same in allocating the work roles to the people while
adhering to the skills of the personnel. The concerned organization follows the transformational
leadership style in order to bring forth modifications in the existing processes and motivate the
employees to achieve the common goal of the business. Therefore, the organizational structure
and the leadership style followed in the organization will support the same while undertaking the
innovation.
07. Competitive Strategy
In the recent business scenario, competitive strategy is important for the businesses to get
succeeded. This is due to the reason that competitive strategy to be initiated will determine the
extent to which competition in the market can be fending off. In the case of Coca Cola, initiation
of the competitive strategy is more important due to the reason that beverage sector is highly
competitive in nature (Rashidirad, Soltani & Syed, 2013). The following section will discuss
about the competitive strategies that will be applicable for Coca Cola and will further help them
to enhance their business with the innovation and products.

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7.1 Application to Coca Cola
Cost leadership is important for the mass market players such as Coca Cola due to the
fact that with the help of the cost leadership strategy, Coca Cola will be able to offer their new
energy drinks in more competitive price. In this case, it should be noted that some of the existing
energy drink brands such as Red Bull and Monster are offering in more premium price and thus
catering to niche segments. Currently, there are lower sets of competition in the affordable price
segments of energy drinks, which should be tapped by Coca Cola (Kaliappen & Hilman, 2013).
Hence, initiation of the cost leadership strategy will be beneficial for them to tap the larger and
untapped market of affordable energy drinks. This will also ensure that the existing market
segments of Coca Cola can be retained with the new offerings. The current target segments of
Coca Cola are majorly the mass market customers and cost leadership strategy for the new
products will help to retain them in the long term.
In the beverage market, product differentiation is important due to the reason that majorly
all the brands available in this sector are having similar sets of value propositions. Hence, with
the help of the product differentiation strategy, the new energy drinks by Coca Cola will have
distinctive features to stay unique in the market. The differentiation should be in terms of taste
due to the fact that existing energy drink brand such as Red Bull and Monster are not known for
their good taste and offering favorable taste will ensure that Coca Cola is tapping the larger
segment (Banker, Mashruwala & Tripathy, 2014). Another point of differentiation will be the
branding elements. Branding elements of the new product will be similar to the existing process
of Coca Cola. This will ensure that the new energy drink by Coca Cola will have better customer
recall value.

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08. Internal capability pertaining to innovation
It is important to review the internal strengths and weaknesses of Coca Cola in terms of
initiating and continuing the innovation process. Based on the identified factors, the further steps
of innovation should be initiated. The following section will discuss about the major strengths
and weaknesses of Coca Cola in managing the proposed innovation.
8.1 Strengths of Coca Cola
 One of the major strengths for Coca Cola is their expertise in the beverage sector. They
are one of the oldest players and have ample experience about the change in the market
demand (Aaker & Biel, 2013). Thus, the new energy drink will also be designed in
adherence to the taste and preference pattern of the target customers.
 The huge financial capability of Coca Cola will help to have extensive innovation and
product development process that will meet all the current gaps. The innovation process
will be more holistic due to the financial support. This will further be supported by the
extensive logistics and supply chain process of them (Saenz & Revilla, 2014). Coca Cola
is known for their supply chain process and it will ensure that the new product will be
widely available in the market and economies of scale can be initiated.
 The brand value of Coca Cola will also be beneficial in initiating the innovation due to
the reason that it will ensure the larger acceptability in the market (Mirvis et al., 2016).
For the new brands, it is challenging to push the sales of the new products while the
branding of Coca Cola will ensure that the new energy drinks will have larger exposure
in the market.

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8.2 Weaknesses of Coca Cola
 Coca Cola is known for carbonated soft drinks but they are not having expertise in energy
drinks. Hence, their development process of a new energy drink might face difficulties in
matching the industry standards.
 The branding of Coca Cola is associated with the carbonated drinks and introducing
energy drinks under the same brand name might dilute the product based positioning of it
(Popescu & Losim, 2015).
 The quality standard of the lower priced energy drink of Coca Cola might not be the same
to the premium existing products. However, the target audience for the energy drinks is
more focused on quality over other factors.
09. Gap Analysis
The gap that was found while assessing the capabilities of the organization in undertaking
the innovation is related to the quality standard of the low priced energy drinks. The concerned
organization aimed at creating low- priced energy drinks for supporting the cost leadership
strategy of the same. However, the lower price might affect the organizational capabilities of
providing the customers with a superior quality product offering. The lack of suitable quality of
the pro duct offering might affect the brand image of the business.
10. Recommendations
 It is recommended that Coca Cola should have multicultural approach towards
developing the new energy drink. This is due to the reason that they are having presence
in different countries across the world and taste patterns will be not be same. Hence, the

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new drink should be developed on the basis of different taste and preference pattern
across the world. It will be easier for Coca Cola as they are already offering different
variants of their carbonated soft drinks in different countries.
 It is also recommended that the new energy drink should be introduced under a new sub
brand of Coca Cola. This will help to have the backward support of Coca Cola while not
getting affected by their brand recall value. It will also ensure that the new drink will
create own independent brand.
 It is also recommended that the new energy drink brand of Coca Cola should have
separate diversity in terms of variants and price points. This is due to the reason that in
the initial stage, Coca Cola will launch in competitive price points and later it can be
diversified to premium segments also. This will help to cater to larger target segments
across different price points and preference patterns.
11. Conclusion
Therefore, from the above analysis it might be stated that Coca Cola must take steps to
develop a new pro duct offerings in order to facilitate the product differentiation while adhering
to the changing needs of the customers. The report aimed at identifying the different stages of the
pro duct development process after assessing the capabilities of the same. The assessment of the
capabilities of the concerned organization will help in exploring the different steps that might
be commenced by the same for the suitable management of the operations. Innovations in the
line of products and processes help an organization in supporting the sustenance of the same.
Therefore, the assessment of the capabilities of the organization and recommended activities on
the same will support in enhancing the innovative process.

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