Business Change Management Report: Coca Cola in Saudi Arabia

This report provides an analysis of business change management at Coca Cola, focusing on its operations in Saudi Arabia. It examines the influence of the external environment, including economic factors, internationalization, and technology, on the company's strategies. The report applies Lewin's Change Model to understand the process of implementing changes within the organization, covering aspects such as employee management, stakeholder involvement, and the importance of change management for sustained growth. Key performance indicators and strategic targets are discussed, highlighting Coca Cola's commitment to community trust, consumer relations, and cost leadership. The report also addresses challenges faced by Coca Cola in Saudi Arabia, such as competition and fluctuating income, and offers recommendations for establishing a new structure, reducing employee defiance, and improving overall business performance. Desklib provides access to this and other solved assignments to support students' academic endeavors.

Business Change Management

Table of Contents
1. Introduction............................................................................................................................3
Mission, Visions and KPIs.....................................................................................................3
Key Performance Indicators...................................................................................................3
2. Influence of External environment.........................................................................................4
2.1 Economic situation...........................................................................................................5
2.2 Internationalisation...........................................................................................................5
2.3 technology........................................................................................................................5
3. Lewin’s Change Model..........................................................................................................6
3.1 Change management at the organisation..........................................................................6
3.2 Employee management....................................................................................................9
3.3 Importance of the Change Management.........................................................................11
3.4 Employee Engagement...................................................................................................13
3.5 Ensuring the Involvement of Required Stakeholders.....................................................14
4. Recommendations................................................................................................................16
4.0 Systems Thinking...........................................................................................................16
4.1 Establishing new structure..............................................................................................16
4.2 Reduction of employee defiance....................................................................................16
5. Conclusion............................................................................................................................17
Reference list............................................................................................................................18
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1. Introduction
Mission, Visions and KPIs
The vision of Coca Cola is segmented under the heads of 5Ps. These are the:
 Producing value for the people whom they serve.
 Maintaining a clean and transparent portfolio of the company.
 Working towards the reduction of the pollution and thus alleviate the environmental
conditions
 Sharing the profit equally with the shareholders
 Focusing on maximum productivity
The mission of the company are also basic. They comprise of an aim to refresh the world, to
instil and inspire people for the moments of optimism and happiness. The company wants to
set an ideal relating to financial, philanthropic and charitable activities.
Key Performance Indicators
The first KPI of Coca Cola, Arabia is focusing on the strategic pillars of the company that are
building of community trust through CSR based on anti-pollution activities, relating to the
consumers, and the method of cost leadership. According to Al-Haddad & Kotnour (2015),
this is essential for organisational success.
They also have a distinct strategy that is based upon appraisal of employees who exhibit
a mind-set of high performance. One of their KPIs is the achievement of their strategic
targets, which involves the following:
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Figure 1: Strategic targets of Coca Cola, Saudi Arabia
(Source: Coca-colaarabia.com, 2018)
2. Influence of External environment
The industrial sector of Saudi Arabia dominates the economy of the country. The industrial
sector accounts for 63% of the total GDP growth of Saudi Arabia. The global recession hit
the industrial sector badly in 2009. The business of major MNCs were badly hit with the
revenue generation falling by 11.7% and the export rate by almost 25%. As per Bartunek &
Woodman (2015), the business infrastructure of Saudi Arabia is excellent with convenient
investment structures. The economy of the oil sector of the country has been secluded from
the non-oil sector in order to draw multinational investment. Saudi Arabia has monarchy that
helps in simplification of the business. The financial sector is also the largest in whole of
Asia (Bartunek & Woodman, 2015). Owing to the unprecedented rule of the Royal family in
Saudi Arabia, there is very a low rate of political disputes, strike calling and political ill will.
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winning more customers by introducing more relevant products which can connect to the
consumers. Each product should have some competitive variation corm the other market
products
winning at the marketplace
Employment of revenue growth management policies therby extracting optimal value
from each production
producing value ahead of volume
Coca Cola Saudi Arabia looks up to optimise their manufacturing cost, lessen the logistic
expenses and other operating expenses on the whole.
Focusing on cost effectiveness
strict management of working capital nis the policy at Coca Cola with an aim to
gwenerate free cash flow.
Stringent management of the working capital

This makes the business environment in Saudi Arabia simple, realistic and predictable. Hence
the global business leaders like Coca Cola can freely invest in the country.
2.1 Economic situation
The organisation has 10 plants across the country. Again, 15,000 employees are employed in
the organisation in Saudi Arabia. The economic value that the Coca Cola plants produces is
immense. According to Batras, Duff & Smith (2016), in addition to giving employment to the
local people, large amount of corporate tax goes to the government’s coffers. Moreover, the
organisation works towards capital; progress of the local suppliers also. They pays the local
suppliers for capital equipment also. The organisation has various community welfare
program also. The organisation took a big step by helping the war victims in 2016 and 2017.
Together with Oxfam Asia, they have created a poverty footprint analysis that is used by
them as a resource for uplifting the standard of lives of the Asians.
2.2 Internationalisation
The organisation follows the One Brand strategy across the globe. All other products of Coca
Cola are their sub brands. A universal storytelling strategy helps to connect the employees of
Coca Cola around the globe. Coca Cola has recently introduced two trademarks of Coke Zero
and diet Coke.
2.3 technology
About 85% of the water available in the Middle East is utilised for agriculture. Hence Coca
Cola and other leading beverage plants that utilise lot of water for its products, makes use of
the saline water of the Arabian Sea. Hence, in Saudi Arabia, the major investment and
technological innovation of the Coca Cola Plant is behind the desalination plants. The
company has about 1500 desalination plants all over the country. 5.6 million Cubic metres of
distilled water is produced by the plants daily (Coca-colaarabia.com, 2018).
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3. Lewin’s Change Model
Famous Greek philosopher Heraclitus has said that “there is nothing permanent than
change”. Hence it is justified that change management is necessary for the most prestigious
and efficient organisations also. This model of change helps the organisation to implement
change in the existing atmosphere of the business organisation (Change-management-
consultant.com, 2018). As per Cummings, Bridgman & Brown (2016), various organisational
changes that might be implemented in an organisation are changes in implied technologies,
changes in operational management and strategic management and so on. However, each
change process requires unique change management techniques.
According to Duffield & Whitty (2016), all Macro and Micro aspects of the organisation
changes with time. Hence in order to ensure sustenance in the environment dynamic survival
strategies are required. It is evident that human nature resists change in policies and
management standards. Hence effective change management strategies are required to inflict
changes in the internal policies of the company.
This report aims at discussing a prolific strategy that would enable Coca Cola to involve all
their essential stakeholders to enable them to successfully implant change in the internal and
the external context of the company.
3.1 Change management at the organisation
The prime reasons why the organisation needs change are as follows:
Effective Change Management
Environmental, political and social factors Responding to rapidly changing business
atmosphere in the country
Organisational Factors To revitalise the entire performance of the
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taskforce of Coca Cola
Stakeholders’ factors Respond to the customers’ demands more
rapidly and promptly
Production Factors Enhance the effectiveness and the
employees’ efficiency+
Employees’ factors Enhance the credibility and productivity of
the employees
Business goals Set standards for the peers in the industry
Business Goals To incorporate better sales strategies to
generate better returns from the investment
Table 1: Reasons for the implementation of Change in the Company
(Source: Influenced from Endrejat, Baumgarten & Kauffeld, 2017)
Change management involves three stages in all. They are preparation for the change,
management of the change and reinforcement of the change. The preparatory phase of the
change includes an assessment of the segments where change policies can be implemented
within the organisation. The next activity of this stage is the development of a proper strategy
that would be able to help the company to incorporate the change in its organisational
structure. The second phase that is the managing phase includes activities such as planning,
implementation, supervision and evaluation of the change policies implemented in the first
phase. According to Golež et al. (2017), the last phase, that is the phase of reinforcement of
the change, involves activities such as collection and analysis of the feedback information
collected by the change managers in the company. The second step of this phase is the gap
analysis of the change management program carried out recently. Thereafter the organisation
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calculates and anticipates the degree of resistance, both internal and external that is
responsible for the hindrance of the change management process. The final step is the
undertaking of corrections actions which would successfully commence the change
management program.
Stages of Change Management
The preparatory phase 1. Assessment of the segments where
change policies can be implemented within
the organisation
2. Development of a proper strategy that
would be able to help the company to
incorporate the change in its organisational
structure
The managing phase 1. Planning of Change
2. Implementation of the Change policies
3. Evaluation of the Change policies against
the organisational standards
The phase of reinforcement of the change 1. collection and analysis of the feedback
information collected by the change
managers in the company
2. gap analysis of the change management
program carried out recently
3. organisation calculates and anticipates the
degree of resistance, both internal and
external that is responsible for the hindrance
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of the change management process
Table 2: the essential steps of change management
(Source: Hornstein, 2015)
Lewin’s 3 step model upholds that change management in an organisation is an episodic
process. The steps can be counted among three episodes, which are as follows.
Fig
ure 2: The three stages of Lewin’s Change Model
(Source: Hossan, 2015)
3.2 Employee management
The Managers of the Coca Cola, Saudi Arabia Company would be able to communicate and
motivate the employee about the crucial nature of the change that is going to bring positive
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FreezingChangingUnfreezing

outcome for the organisation. According to Kavanagh & Johnson (2017), the staff should be
effectively trained so that they might act skilfully in the change implementation phase.
Training might be external or internal.
The “Changing Phase” would allow the organisation to initiate the practical steps that are
involved in the strategic change planning. He major approaches that the organisation might
undertake in this stage are development of strong emotional relationships within the
employees and between the hierarchy and the employees. The next step is the offering of cash
rewards on bearing and participating in the change management phase proficiently. This is an
informal employee appraisal program (Lewin, 2014).
The freezing phase allows the organisation to incorporate the recently innovated changes in
the scope of their regular work regime. This is an essential part of the change management
strategy that would help in the sustenance of the change and prevent the organization from
retreating to the previous operational standards and work methods (Lewin, 2014).
In Saudi Arabia, Coca Cola operates as a retailer, manufacturer and a bottling company. The
product of the company are non-alcoholic beverages. The organisation is a parent company of
Georgia, United States of America. The net income of the Saudi Arabian facility has been 55
million Saudi Riyal in 2010. The net income from the country receded to 38 million in 2012.
Since then the organisation, in-spite of being counted as one of the top peering organisations
of the FMCG industry of the country have not been able to mark substantial increase of sales
in the country. Besides the organisation has increased its target market also. In spite of that
the rise in the number of employees have been low.
Coca Cola has about 800 employees working at present. An additional of 350 employees are
working in the bottling plant of the company. The organisation is also competing very hard to
be counted among the first three market occupants of the cold drinks industry of Saudi
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Arabia. However, the organisation has invariably remained lower than Saudi Soft drinks and
PepsiCo in Saudi Arabia.
Coca Cola is a type of organisation that requires making changes in the products and the
business strategies depending on the expectation of the consumers and the influence from the
external business atmosphere of the FMCG industry in Saudi Arabia.
3.3 Importance of the Change Management
The eternal factors that the organisation needs to consider are Government regulations,
changes and changing trends in the labour markets, sales market conditions, the economic
scenario and so on. According to Lock (2018), the internal factors susceptible to change in
the company are workforce and workforce management policies, resource management and
allocation, the attitude of the workers in the bottling plant and the effecting manufacturing
and sales strategy adopted by the organisation in Saudi Arabia. The change management
strategy was initiated in Coca Cola Corporation after the Second World War. The company
suddenly faced reckless terror and also became exposed to new target markets. Various other
entrepreneurs as well as peering beverage companies came into encounter with Coca cola.
Moreover, as per Morrison (2018), the Middle East became a huge market for all of the
world’s best beverage companies. Especially, Saudi Arabia gradually became one of the top
five consumers of cold drinks in the world. Generally also, the demand of premium consumer
products is high in Saudi Arabia. One import change management strategy was the
installation of vending stations all over the battle ports of the countries where the soldiers
could avail free cold drinks. The company used this move as an effective sales strategy also,
as this exhibited the patriotic emblem that the organisation carried with them. Saudi Arabia
was the only hub in the Middle East, where the vending machines were manufactured and
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