Problem Solving Process and Information Systems to help Coca Cola

Question: Discuss about the Problem Solving Process And The Use Of Information Systems To Help Coca Cola. Answer: Introduction Coca Cola a beverage company manufacturing carbonated soft drinks and was invented by Asa Gruggs Candler in the 19th century. Since then the company has able to grow at a faster rate with the marketing strategy of Candler. The company was able to capture dominance in the beverage market with the 20th century. The company sells its products to the licensed Coca Cola bottlers worldwide (Cbsnews 2017). The company has been involved in continuous innovations as well by introducing new products one after the other in the name of its company. Some of the new inventions of Coca Cola are diet coke, coca cola zero, coca cola vanilla and others. Similarly it once it invented new coke at the time when the company started losing its customers to Pepsi. However, the new product did not go well and consumer demanded to get back the old taste of Coca Cola (The Coca-Cola Company 2017). The report discusses about the market forces that influenced the invention of new coke. It further analyses some pr oblem solving method to improve the competitive advantage of the company and benefits of information system. Discussion:Market Forces affecting introduction of New Coke The market forces are both the external and internal forces that affect the company in some way or the other. The market forces are also known as the competitive forces that has an impact on the companys growth. The five competitive forces that affects the company and its surrounding market is threat to new entry, bargaining powers of suppliers, bargaining powers of buyers, threat from substitute and rivalry from competitive firms (Fung 2014). Threat to new entrant: Coca Cola falls under the beverage company producing carbonated drinks. However, the process of getting into this business is long and the company first needs to be licensed manufacturer. Moreover, the investment is huge to open a big beverage manufacturing company like Coca Cola. Thus, the chance of new entrant is less in case of beverage industry, which makes the threat very less (Indiatsy et al. 2014). Bargaining power of the suppliers The suppliers of Coca Cola Company are as big as the company and they take huge contract. Moreover, even though there is no switching cost to change the suppliers yet the company does not want to switch their suppliers because of trust. On the other hand, suppliers also do not want to lose their contract from such big companies. Thus, the bargaining power of suppliers are exists in some way or the others. Bargaining power of buyers Buyers have a strong bargaining power in the beverage industry as they have the chance to switch from one drink to another due to its low switching cost. This is because of large number of substitutes available in the market for soft drinks such as Pepsi. Thus, the company has a huge chance to lose its customers to other beverage brand in case of lack of satisfaction. Threat from substitute There is huge number of beverage brands available in the market that is as big as Coca Cola. This makes the threat from substitute very strong for the brand. Moreover, as the switching power is very low for the customers, they can easily shift their demand to other substitute available in the market. This puts Coca Cola under great pressure from substitutes (Rothaermel 2015). Rivalry among competitive firms The rivalry among other existing firm under beverage industry is huge because of large number of rivalry firms. Firms like Pepsi are as big as Coca Cola and serve similar products like Coca Cola. Moreover, there are various brand selling soda and juice to the consumers. However, the company experiences more rivalry from Pepsi than the other soda and fruit juice making firms do. From the above analysis, it can be seen that Coca Cola was forced to invent a new type of soft drink in the name of New Coke because of huge threat from buyer s as they started switching their demand for Pepsi. Secondly, it also experiences a huge rivalry from rivalry firms selling the same products. Due to similarity I products the consumers were shifting the demand for Pepsi. This forced the company to introduce a new type of product that is different from others (Porter and Heppelmann 2014). Steps to Improve Market Share Maintaining competitive advantage in the market is essential for the company like Coca Cola that is facing a huge competition from other beverage brands such as Pepsi. However, the company also needs to design its strategies to improve its market share in the industry. The step taken by Coca Cola to offer a different product to the customers by introducing new coke proved to be a failure as customers did not like its taste. Thus, the brand can take other steps too to maintain its image in the market rather than introducing new coke. The first step the company can do is to plan its target for a year. This is because without setting a goal it is not possible for the company to achieve it. Planning the most effective way a company can operate to achieve its future objective. Instead of introducing a new product with a different taste, the company could have introduced some offers or modified their pricing strategy for their existing drinks. This could have motivated the customers to buy Coca Cola instead of other drinks (Xu and Lui 2016). Secondly, the company could have first introduced a sample of new coke and conducted some research about the acceptance rate of this drink before just launching it. The company could have carried out campaign targeting the youth, as they are the maximum consumers of soft drink. In the campaign, the company could have introduced the sample of the drink to the youths to see its acceptance rate and could have saved itself from loss. Thirdly, instead of introducing new coke it could have introduced some kind of fruit juice in its brand. This is because people nowadays are becoming very health conscious and a fruit juice rather than carbonated drink could have increased the acceptance rate compared to new coke. Moreover, it could have given a tough competition to companies selling fruit juice and could have gained a comparative advantage by selling all-purpose drink under them (Daneshgari et al. 2016). The alternative steps that the company should have taken instead of introducing new cok e in the market. This is because the customers did not accept their new coke taste and it might prove to be more detrimental for the companys growth. Thus, the company needs to accept these alternative steps to expand its market share in the world. Stages of Problem Solving The failure of new coke in the market raised a concern among the managers to take some problem solving steps to resolve the risk arising from it. There are various steps involving the problem solving procedure such a identifying the problem, provide solution, pick on solution, and implement the solution and reviewing of result. Problems are critical for the success of a business and thus require to be solved as soon as possible with the help of these steps. Initial step is to identify the problem such as in this case is the failure of Coca Cola to expand its market share through new coke. The next step is to offer solution for the problem. The possible solution that Coca Cola could take to resolve the problem is to introduce its old taste and drink as the consumer demands it (Bardach and Patashnik 2015). Secondly, it can alter the price for its old drink compared to previous price, as this will help the company to attain a competitive advantage over other competitors of the beverage industry. This is because only price differences can encourage consumers to opt for Coca Cola than other drinks. Further, to reduce the price the company also needs to alter its cost and manage it so that it does not incur any loss due to its low price. These solutions can help the company to get back its customer share in the market and get rid of eh failure it faced because of new coke. The next stage in problem solving is to pick one solution. From the above solutions, the most appropriate is the idea of reducing price because price is the only thing that motivates the customers. Even though it involves greater planning in terms of cost and time, yet it will prove to be beneficial for at least short term. After picking the appropriate solution, it is necessary that the company implement the solution in the most appropriate way and then review the result for at least short term (Robertson 2016). This will help Coca Cola to cover up the loss incurred due to new coke. Information System The next important criteria for any business to be successful in the market and in all it strategies is the good quality information system. Information system is defined as the system of an organization in term of collecting, organizing, storing and communicating. It is the network used by the both the consumer and the organization to collect information about each other. Collecting information about the market just before implementing any steps will help the company to be successful in its strategy. Further the collected information can be organized and use appropriately in a correct manner to get the desired result (Peppard and Ward 2016). Information system also plays an crucial role for Coca Cola and its failure in new coke strategy. However, there are various types of information system in an organization such as customer management system, business intelligence system, knowledgemanagement system and others. Coca Cola could have benefitted from a good quality customer relation information system (Nedelcu 2013). This is because with the correct information about the customer the company could have understood about their needs and desire. A good quality information system will also allow the brand to analyze the trend going on in the market and the desire of the consumers about the drink. A good quality CRM also helps the company to gain continuous feedback from the consumers about their expectation from the company before implementing the plan. Coca Cola could have used its customer relationship system to track the needs of the customers and the reason behind sudden reduction of demand from the consumers before introducing a new drink. On the other hand, it could have also synchronized the feedbacks of the customer and the trend going on in the market so that it could have invented a better strategy for itself. Complete information about the customers and the market trend would have allowed the company to take up different strategy and solution to meet the demand. A good business intelligence system (BIS) could have allowed the company good ideas about analyzing the future market trend and the result of the strategy adopted by the company. This should have helped the organization to know that the new coke combination that the brand is introducing will prove to be a failure in the market. Thus, a good information system is beneficial for any brand in some way or the other as it help them to be connected with the market trend (Khodakarami and Chan 2014). Conclusion From the above analysis, it can be concluded that Coca Cola introduced its new coke because of threat from the competitors and the switching habit of buyers for other products. However, it can also be seen that the company would have saved itself from the loss it incurred due to the product if it had a good information system and a planned strategy for itself. Moreover, there were other alternatives available to the company as well such as reduction in price, conducting research before introducing new coke and others. However, the company still has time to use some solution to the problem and alter its strategy to get back its market share for its competitors. 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