MASTER OF MANAGEMENT IIUM 2017
MANAGEMENT POLICIES MGT 6600
TITLE: GROUP CASE STUDY 2(COCA COLA)
Prepared by: Hamzah Musazay
G1520213
Farah Atiqah Zawani
G1521832
Romi Hamfrisa Putra
G1521403
TABLE OF CONTENT
TITLE Summary of Case
PAGE 3
Question 1
4-5
Question 2
5
Question 3
6
Question 4
7
Conclusion
8-9
References
9 - 10
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SUMMARY OF THE CASE
Coca Cola was invented back in 1886 by a pharmacist named John Pemberton, which also known as “The Doc”. At the end of the Civil War, John decided to invent something that would bring him a commercial success. During that time, almost everything that he did in pharmacies would fail. He was trying his luck by playing with drugs but none of them were successful and made money. Then he moved to Atlanta and finally decided to get himself involved in the beverage market. During his time, soda was in the rising popularity as a treat to social gathering spot. Finally, he brilliantly invented something that brought a huge success by making a soda fountain drink. As of today, Coca Cola is the world’s largest and number one nonalcoholic beverage company, producing more than 3,500 drinks in over 200 countries. Coca Cola has four products in the top five soft-drink brands in the world, namely Coke, Diet Coke, Fanta, and Sprite. Bloomberg Business Week and Inter-brand has identified Coke as the number-one best global brand. Coca Cola aims to double up their business by the year 2020 and they have identified its Simply Orange juice business as a key factor to help them achieve this goal. Evidently, decision-making is absolutely vital as Coke aims to beat rival PepsiCo. Coca Cola utilizes satellite imagery, complicated data algorithms and a juice pipeline. Besides that, Coca Cola aims to produce consistently fresh tasty orange juice all year round despite a three-month peak growing season. According to Coca Cola, in order to achieve the same consistent blend of orange juice, one quintillion decision is required. This is all derived by algorithms and statistics.
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DISSCUSSION Q1: Which decision in this story could be considered unstructured problems? Structured problems? Unstructured problem can be defined as problems that are new or unusual and for which information is ambiguous or incomplete (Robbins, 2016). The problem is new or unusual problems for which information is ambiguous or incomplete. Getting new business is not an easy work to do as it required good plan and preparation. Many business fails when they started new business as because they cannot capture the fluctuate demand and changing market condition. Since getting in to Orange Juice business is new for Coke this could be considered an unstructured problem. According to the case Coke’s executive and managers are focusing on ambitious, long-term growth for the company; doubling coke’s business by 2020. A big part of achieving this goal is building up its simple Orange Juice business into a powerful global juice brand. In this case making simple orange juice also can be considered as unstructured problem because it involves complicated algorithm and complex application of business analytic. Making one glass of orange juice by hand for small quantities is not hard. On the other hand, for one company like Coke producing huge amount quantity of orange juice is not ease. As the Coke revenue analytic consultant says, “Orange Juice is definitely one of the most complex application of business analytics”. They should ensure that they have the same freshness for all bottles and also it should have same quality oranges that will provide plenty of juices. Therefore, it requires algorithm and complex application of business analytic for mass production of Orange Juice. Structured problem is a problem in which straight forward, familiar and easily defined. In addition, problem would be resolved with the pre-determined policies and procedure in a structured and step-by-step process. They clearly identify what is given and what needs to be found and much easier to solve. A good example of Structured problem from this case is Black Book model. It is a simple algorithm program that includes detailed data about the more than 600 different flavors that make up an orange and about customer preference. This data is correlated to a profile of each batch of raw juice. The algorithm then determines how to blend batches to match a certain taste 4
and consistency. It also includes data on external factors such as weather patterns, crop yields, and other cost pressure. By using Black Book, Coke can easily determine and produce Orange Juice following the instructions.
Q2: How does the Black Book help Coke’s manager and other employees in decisionmaking? Allah SWT created human with incredible abilities where each of the human is gifted with different ability and unique on their own. Nevertheless, humans still have limitation of themselves. Year by year, the evolution of technology is getting better and some technology achievement has gotten way beyond human capabilities. The advancement of technology in some way opens up opportunities for human to grow higher and further in accomplishing their goals. In the case of Coke, the Black Book that they considered as big data, stores the algorithm of the company’s business success. The Black Book Model helps Coke’s managers and employees on top of their game plan during decision-making process as it consists over 600 different flavors in their calculation that is far more than normal human brain can process. By having the Black Book, it greatly simplifies the decision-making process for the managers while making it more powerful because of the amount of data being used. Not other that, it also helps them to blend batches of juices as well as tweak recipes. How big data helps Coke’s manager and employees in making decision is based on the internal and external sources gathered in the Black Book. Some information in the big data includes weather pattern for supervising the growing season, crop yield and also other cost pressures. This information is vital and valuable as it helps the manager to plan, lead, organize and control the organization. However, to some organization, they rely on big data as much as they believe it is their important weapon to blend within the market.
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Q3: What does Coke’s big data have to do with its goal? Coca-Cola’s (Coke) top executives and managers are focusing on ambitious, long-term growth for the company, which is to double up Coke’s business by the year 2020. One of the big parts in achieving the goal is to build up its Simply Orange Juice business into a powerful global juice brand. The executives and managers are well aware of difficulties and challenges they might face in the production of the orange juice due to limited growing season and weather fluctuation. One good advantage of Coke for being able to professionally analyze the possible consequences is when they come out with ‘Black Book Model’. Black Book Model is like a house of formulae specifically in making good orange juice. For the top executives and managers, the book is more to algorithm, where it contains data about more than 600 different flavors that make up an orange and about customer preferences. Not only that, it is correlated to a profile of each batch of raw juices. The algorithm also determines how to blend the new batches to match a certain taste and consistency. The presence of big data or the Black Book makes the goal seem to be more achievable. As said by the revenue analytic consultant, the process of making orange juice somehow requires one quintillion decision. Big data is knows as quantifiable information that can be analyzed by highly sophisticated data processing. It comprises of high volume, velocity and variety information that contributes to the decision made in the decision-making process. Therefore, with the help of the big data, Coke’s top executives and managers would be able to make a wiser decision based on the reliable data they have. A part from that, it would also help to make sure the company is on the right track towards achieving the goal.
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Q4: Do some research on revenue analytics. What is it? How can it help managers make better decisions? Revenue Analytics is a company that provides product solutions and recommendations to companies whose priority is to retain their loyal customers. In short, it is a revenue management and price optimization company. Revenue Analytics is the application of disciplined analytics that predict consumer behavior in the market and optimize product availability and pricing to maximize revenue growth. The primary aim of Revenue Analytics is selling the right product to the right customer at the right time for the right price. In Revenue Analytics, it is essential to understand the customers' perception of product value and accurately aligning product prices, placement, and availability with each customer segment. The main challenge is that there are many different variables and many unknown outcomes, thus the services provided by Revenue Analytics must be accurate. Revenue Analytics claim to only employ the “A-team”, implying that they employ only the very best specialists and consultants. PhD holders in Mathematics are required as well as highly qualified software engineers. Revenue Analytics uses an existing library of predictive analytics components based on decades of experience across multiple industries, developed by the company’s experts. This will ease the process for clients to create custom software that is relevant to their company and industry. However, human emotions are usually affected by the change in prices of the products, thus Revenue Analytics chooses to include that factor from the very beginning of the process. This will help reduce the chances of customers becoming unhappy in the change in price. Revenue Analytics helps managers make better decisions as they are presented with solid figures and can make a rational decision.
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CONCLUSION: ISLAMIC PERSPECTIVE
Al-Quran: S3: 159 ﷲِ ۚ إِ ﱠن ﱠ َﺎورْ ھُ ْﻢ ﻓِﻲ ْاﻷَ ْﻣ ِﺮ ۖ ﻓَﺈِ َذا َﻋ َﺰ ْﻣﺖَ ﻓَﺘَ َﻮ ﱠﻛﻞْ َﻋﻠَﻰ ﱠ َﷲَ ﯾ ُِﺤﺐﱡ ْاﻟ ُﻤﺘَ َﻮ ﱢﻛﻠِﯿﻦ ِ َوﺷ ‘…and consult them in the affairs. Then when you have taken a decision, put your trust in Allah, certainly, Allah love those who put their trusts (in Him)”. Pertaining to decision making in Islam, the general instruction lies on surah Ali Imran verse 159. According to scholars, this verse came during the battle of Uhud. The verse told us to be softhearted in facing problems. Good leadership is always accompanied with affection and modesty. Hard hearted leaders will not gain sympathy from their followers. It only creates fear and hatred. Affection will attract people to cooperate. Hence, things will be easier to solve. Conferring to Ali Imran:159, the first thing to apply in making decision is to discuss with all parties. By involving the related parties, the process of gathering necessary information will be faster. Additionally, more options are provided. More brains will also help in choosing the best alternative. Nowadays, it is barely possible for a man to be an expert in many fields. Therefore, it is good to consult to experts in other disciplines for the matter. This is also implicitly stated in Ali Imran:159. Allah likes people who consult to others, even though sometimes it fails to achieve the goals. After we come up with decisions, Allah wants us to trust Him. Trusting Allah is beloved with Him. In the case of Coca-Cola, they come up with the decision of building up its Simply Orange Juice business into a powerful global juice brand. Orange Juice Business is new for Coca-Cola and therefore they will face problems such as structured and unstructured problems in the implementation. Handling and resolving structured problem isn’t hard to do because the solution is usually selfevident or at least reduced to a few alternatives that are familiar and have proved successful in the past but for unstructured problem manager have to go to the trouble and expense of going through an involved decision process. Hence, as a Moslem we should put our trust to Allah in 8
handling and resolving both problems particularly unstructured problems. Because Allah knows what is the best for us.
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