Innovation and Corporate Governance in Britvic: A Comparative Analysis

Desklib provides past papers and solved assignments. This report analyzes Britvic's success using innovation and corporate governance.

Assignment
[1.Innovation & Technology]
[2. Corporate Governance]
Student Name:
Student Email Address

Contents
Task One: Innovation and Technology......................................................................................3
Introduction............................................................................................................................3
Innovation and Technology in the growth of a country.........................................................3
New technologies in Current Businesses...............................................................................3
Technologies in Britvic..........................................................................................................4
Benefits of Innovation on Britvic...........................................................................................6
Analysis of Innovation on Britvic..........................................................................................6
Conclusion..............................................................................................................................7
Task Two: Corporate Governance.............................................................................................8
Introduction............................................................................................................................8
History of Corporate Governance in the UK..........................................................................9
Functions of the Board of directors........................................................................................9
Corporate Social Responsibility...........................................................................................10
Conclusion............................................................................................................................11
References................................................................................................................................12
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Task One: Innovation and Technology
Introduction
Innovation is the key to changes in an economy. There is a clear-cut difference
between invention and innovation. The invention is creating something from scratch that is
new to the community while innovation is modifying the existing resources so that the
community benefits from it (University, n.d.). Innovation is of different types i.e. product
innovation, market innovation, process innovation, and organizational innovation. Innovation
in these areas is possible only through technological advancements (University, n.d.). Hence
technology and innovation are interlinked and is the foundation for any business that has
shown economic progress over several years of its existence in the market.
Innovation and Technology in the growth of a country
The changes that we see today in the world around us is because of the invention of
technology by some of the scientists around the world. We cannot imagine talking or texting
a person living hundreds of kilometers away from us unless the electricity and the phone
were invented. All thanks to Benjamin Franklin and Alexander Graham Bell for their sincere
efforts in this area. This has helped in improving the economy of a country through the
exchange of modern ideas and in adapting to new changes.
New technologies in Current Businesses
In many instances, technology has helped in renovating businesses and has enabled
people to reach their goals. From a current discussion about technological innovations,
members of Forbes Technology Council responded that Artificial Intelligence, Adversarial
networks, Chatbots, and Real-time language translations are some of the few technologies
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that are being utilized by businesses both new and historic (Artificial intelligence in business,
n.d.).
Few years before, using artificial intelligence to perform workforce tasks would have
been unimaginable. But at present, AI is being used for providing customer support, to collect
and analyze information from several databases, to optimize the output and efficiency of a
system, to enhance marketing capability by tracking user behavior (Artificial intelligence in
business, n.d.). GANS which use large amounts of data to create various textures is usually
used in Gaming and Filming industry. This requires higher computational power and large
sources of data which are available resources for large scale companies. The aspect of GAN
that has helped the gaming industry is its unique ability to process unlabelled data (Square
Capital, n.d.).
Disney has used chatbots not just for customer service and sales purposes but instead,
has used it for marketing strategies. For example, to increase the publicity of Zootopia,
Disney used a character Judy Hopps to bot on Facebook which was more of a game involving
solving crime scenarios. This helped to create a hype among the public before the release of
the movie. Real-time language translations which also use AI algorithms to function helps the
business to provide a faster turnaround (Square Capital, n.d.). Companies that employ this
technology will be able to compete in the international markets despite facing language
barriers as this technology fills those missing gaps that could hamper the growth of a business
on an international level. Stepes has developed a similar real-time translation service which
has helped in the machine to human and mobile translation possible (Artificial intelligence in
business, n.d.).
Technologies in Britvic
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Britvic is a leading FMCG dealing with soft drinks business in Europe and some parts
of America. Currently, it exports to around 50 countries across the world and is recorded as
the second largest supplier of soft drinks in Britain (Britvic, Britvic celebrates innovation and
growth on 80th birthday, 2018). It also has its markets in France, Brazil, and Ireland.
Britvic’s portfolio of soft drinks comprises of its own products along with few soft drinks of
PepsiCo which it manufactures and sells in Britain; as per an agreement between both the
FMCGs (Britvic, Britvic celebrates innovation and growth on 80th birthday, 2018). Britvic is
listed in the FTSE4Good Index which categorizes companies that comply with the social,
environmental and management practices that are safe for the public (Britvic CMO:
‘Spending money on digital is easy, 2016). The growth of Britvic products in the market was
possible because of the strategical planning and business building skills of the management
team through innovation and international expansion. This report analyses how innovation in
terms of technology has helped in the economic progress of the company i.e. sales, profit and
operation (Roderick, 2017).
The production, testing, and packaging of beverages are important tasks that need to
be performed with proper supervision and care. These processes had been previously carried
out using human interference but with the advancement of technology, most of the assembly
line processes have been automated reducing the labor force and increasing the precision and
accuracy with which the work is done (Britvic, Britvic Plc : Annual Report and Accounts
2018, 2018). This has, in turn, helped in increasing the profits and quality of products
improving its position in the market. Further, the salaries that were being paid to employees
have been utilized in automating different stages of the beverage production process. This
automation has also helped in reducing the time spend on different processes and has helped
in introducing new products into the market (Britvic, Britvic Plc : Annual Report and
Accounts 2018, 2018).
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Benefits of Innovation on Britvic
Britvic’s CMO has mentioned in one of his interviews that his aim for the year 2016
is to increase marketing strategies digitally. He exemplifies how one of their strategies to
target people by using Dunnhumby data to one of their digital campaigns helped them in a
positive way (Britvic CMO: ‘Spending money on digital is easy, 2016). They adopted a
similar strategy on their brand Robinsons and Fruit Shoot. This was beneficial in delivering
the message of their juices being low in sugar content to the target audience. 25% of their
investment has been allocated towards digital marketing. Further innovating their products in
terms of packaging and labeling has contributed to a 5.4% increase in their revenue in 2018
compared to the 4% increase in the year 2007 (Britvic, Britvic Plc : Annual Report and
Accounts 2018, 2018). Their new strategy of globalizing their product has also
helped in increasing their profits whereby 40% of sales which is from countries
outside Britain (Roderick, 2017).
Analysis of Innovation on Britvic
Innovation has helped Britvic in increasing their overall revenue. The
volume in liters of drinks produced in the year 2018 on an international level
was 43.8 million and was 41.5 million in the year 2017 (Britvic, Britvic Plc :
Annual Report and Accounts 2018, 2018). There has been a considerable
increase with the improvement in technology at both production and marketing
levels (Britvic, Britvic Plc : Annual Report and Accounts 2018, 2018). Further,
there was also a considerable increase in the revenue from 46.3 million Euros in
2017 to 49 million Euros in 2018 in the international markets showing the
benefits of digital marketing using AI technology in improving their profits. A
similar scenario is observed in terms of local markets of Britain with revenue of
about 555.3 Million Euros in 2017 which increased to 610.6 Million Euros in the
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year 2018 (Britvic, Britvic Plc : Annual Report and Accounts 2018, 2018). It is
evident from the above information that automating their assembly line,
innovating the packaging of their product line and using digital marketing for
advertising their products has helped in enhancing their profits and sales.
Further, their steps to globalize their product has opened new platforms where
their products are in demand for the innovation and health benefits that they
tend to offer.
Conclusion
Innovation and technology are two sides of a single coin. If innovation has
to take place then there should be some space left for technology. Innovation
has helped countries improve their economies through the exchange of ideas
and adapting new technology. Today we see that many businesses are in the
path of success as they have incorporated Artificial Intelligence, GANs, real-
time language translation and bots to run different processes in their firms. A
similar step taken up by Britvic in automating their assembly line, innovating
their products and in advertising has helped them in increasing their overall
profit and the production volumes. From the examples mentioned in the report,
it can be concluded that innovation is the backbone for the progress and growth
of an organization.
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Task Two: Corporate Governance
Introduction
Every company has laid down a set of laws, principles, and procedures based on
which the company functions. This is referred to as Corporate Governance. They are the
guidelines based on which the company’s visions and objectives are proposed. These laws
help in directing the company in the right path such that their goals are fulfilled and are
beneficial to the stakeholders, board of directors, customers, employees and the society as
well (Thomson, 2009). According to the World Bank, Corporate governance is the use of
authority and organizational resources to benefit society and solve their problems. There are
several models of corporate governance around the world and they vary depending on the
type of capitalism. The interests of shareholders are taken into consideration in the Anglo-
American model of corporate governance while in a multi-stakeholder model which is more
prominent in the European and East Asian regions identify the interests of the society and all
the individuals that make up a company (Raut, 2018).
The CG principles are developed in different parts of the world considering the stock
market, investors, governmental support and support from international establishments.
OECD Principles of Corporate governance which came into being in 1999 is the most
powerful set of guidelines that were set (Raut, 2018). It was further revised in 2004. These
guidelines are often used by several countries and institution is laying out their country-
specific or institutional codes. United Nations has created a benchmark or guidance for
practices of good corporate governance which cover five categories such as Auditing,
Organizational management, compliance to corporate standards, transparency in disclosure of
information and financial matters and the structure of ownership. (Raut, 2018)
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History of Corporate Governance in the UK
Corporate Governance in the UK has gone through several changes over the last
couple of years to what it is today. In 1991, a committee to overlook the financial aspects of
corporate governance was established to consider some special cases of corporate scams and
grievances (Council, 2018). The committee developed a set of principles known as the
Cadbury report which laid out a set of principles for good corporate governance. The report
put forward three recommendations in a corporate organization. Firstly, the CEO and the
chairman of a company should never be the same, the board of directors should have three
members ensuring no ties with the employees and lastly, should comprise of an audit team of
non-executive members (Council, 2018). In 1998, the Hampel committee came into action
which reviewed the recommendations of the Cadbury report. Further, a Hampel report was
published which added few more recommendations stating that all types of remunerations
should be transparent and the chairman should be noted as the leader of non-executive
directors of the board (Council, 2018). In 1999, the Turnbull committee was formed, they laid
down the risk management aspects of corporate governance. A Combined Code came into
being under Sir Derek Higgs in 2003 (Council, 2018). In 2005, the Turnbull report was
published with no significant changes in its content. A revised version of the Combined Code
has been published over the years with few changes and additions to the principles of UK
Corporate governance. The recent version of UK Corporate Governance was published in
2018 (Council, 2018).
Functions of the Board of directors
There are specific functions that are allocated to the board of directors of an organization and
they are briefly described below (Matters, n.d.):
1. Point of Trusteeship: they are sole trustees for the welfare of a company.
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2. They are responsible for formulating the vision, mission, and code of conduct of the
company.
3. It is their duty to develop an organizational structure for the company.
4. They should implement their power in selecting the right individuals in top-notch
positions who can implement the company strategies.
5. They are given the power to sanction finances for projects and distributing profits to
shareholders (Matters, n.d.).
Corporate Social Responsibility
A managerial concept that is employed by companies to deal with concerns related to
business operations and stakeholder communications. It is a methodology whereby a balance
is achieved in terms of economic, social and environmental aspects of a company and at the
same time expectations of the stakeholders and shareholders are met. This is often referred to
as the Triple Bottom Line Approach (Organization, n.d.). CSR should be incorporated into a
company considering that the economic viability of the company is not affected. The key
CSR issue that a company should address is that the establishment is sustainable, has
minimum environmental concerns and is beneficial to society. Archie Carroll had created one
of the most popular constructs for his four areas of a framework for CSR which takes the
shape of a pyramid (Foundation, 2010). The four main areas of this construct are economic
responsibilities, social responsibilities, ethical responsibilities, and philanthropic
responsibilities.
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Figure 1: Caroll's Pyramid of CSR
Archie Caroll’s Pyramid display’s four responsibilities that an organization must follow to
become a socially responsible firm. Firstly, the organization should attain economic stability
to survive in the long run. Secondly, it is an organization’s responsibility to obey the laws set
by the government or any political organization in terms of health and safety, employment,
etc (Caroll, 1991). An organization should act morally and should set a code of ethics for the
firm. With great power comes greater responsibilities which are termed as philanthropic
responsibilities i.e. to serve the society through donations or by setting up educational trusts
(Caroll, 1991).
Archie Carolls Pyramid of CSR will be applied to G4S to study the extent up to which the
company is compliant with this model. G4S is a leading provider of security services to
customers in six different continents across the world. G4S has been selected as one of the
major constituents of the FTSE4Good Index series as per its activities in promoting
sustainable work and maintaining a healthy society (India, 2018). G4S abides by the ethical
responsibilities by treating the employees with due respect and providing them with
Provident Fund, Bonus, Minimum wages and protective safety equipment as per the needs of
their job. G4S adheres to the social and philanthropic responsibilities by ensuring that the
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activities that they perform are beneficial to society. G4S by joining hands with NGO’s,
supporting sports and establishing Creches’ within the workplace is trying to be a good
corporate citizen. The services that they provide are also targeted in minimizing the risks to
the environment. They stretch their activities beyond the corporate business world and makes
a social commitment (G4S, 2013). They strive to be a good corporate citizen by taking
measures to lower vehicles emissions, energy consumption, and management of waste-water
in the activities that they perform. Despite all the efforts made by G4S in adhering to the
social commitment set forward by them; they also ensure that they reach their targeted profits
through a balanced managerial ideology. In 2018 their revenue has increased by 2.1% and is
reported to be 7,512 Million Euros (G4S, 2013) .
Conclusion
From the above sections of the report, it is evident that Corporate governance is required for
the proper functioning of an organization. Corporate governance in the UK has gone through
several stages of improvisation to reach the present standards. The Board directors are the
key resources in managing corporate governance in a firm. Another important aspect that is
discussed is CSR which needs to be incorporated to benefit society while achieving the
targeted profits. G4S a global provider of security services abides by the Archie Caroll’s
pyramid of CSR by following the social, economic, philanthropic, economic and legal
responsibilities because of which they are enlisted in the FSTEGood index series as one of
their constituents.
References
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