MANAGEMENT REPORT

Coca Cola Beverages Pakistan limited

INTRODUCTION................................3

PLANNING.........................................5

ORGANIZING....................................11

ANALYSIS OF THE ORGANISATION STRUCTURE...................13

LEADING..........................................17

LEADERSHIP STYLE.......................................17

CONCLUSION..........................................21SWOT ANALYSIS............................................21

Institute of Business Administration 2


INTRODUCTION

The focus of this report is basically to analyze the different management functions at Coca cola beverages Pakistan limited Karachi. These functionsinclude planning, organizing, leading and controlling.

History :

International:Coca-Cola laid the foundation of the beverage industry when it was formed in May 1886 in Atlanta.However it was not until 1895 that the idea of selling coke in bottles was introduced. With the passage of time Coca-Cola gained popularity and itsproduct began to get recognized internationally. Thus from its mere beginning in 1886 Coca-Cola has now been transformed into a strong multinational with its product being currently recognized all over the world. Coca-Cola, in fact, has now become one of the most famous and widely consumed brands in the world. It has not only established its footings in the beverage industry but is currently heading the list of the most financially sound companies in the world.

Pakistan:Although Coca-Cola is not a new name for the local market, Coca-Cola Beverages Pakistan Limited



(CCBPL) began its operations on 26 May 1996 in Pakistan. Coca-Cola Beverages Private LTD (CCBPL) is a joint venture between Coca-Cola International,Fraser and Neeves Singapore and Package Ltd. Initially it acquired National Beverages LTD Karachi and later acquired International Beverages LTD Hyderabad .In May 1996 Fraser and Neeves, a Singapore based bottler of Coke, bought off the local bottlers in Karachi. Not long after it went on to acquire the bottling plants in Hyderabad as well. Since then coke has made an impressive impacton the local market by increasing it’s availabilityas well as its volume share. CCBPL has decided to expand its operations in Pakistan by buying other bottlers all over Pakistan. Implementing their plans of acquisitions of other plants they have recently acquired all the plants in Pakistan as they are inclined to give more attention to increase the market share in Pakistani market.

Products:Coca cola Beverages Pakistan has a very narrow product range. It has the following brands in Pakistan.

Coca Cola Sprite Fanta



These products are sold in the market in differentsizes of bottles. These sizes are available for allits products.

250ml 250 ml (Non Returnable) 300ml 1 liter 1.5 liter pet

PLANNING



AN OVERVIEW

Without a strategy the organization is like a ship without a rudder, going around in circles. It’s like a tramp that

has no place to go to.

Joel Ross and Michael Kami

Strategic planning, formulation and implementationare core management functions. Although strategicmanagement has been in existence for only a fewyears its implications have been firmly andstrongly rooted in organizations that want to standin good stead. Among all the varied things thatmanagers have to deal with and act upon, few affectan organization’s performance more lastingly thando the task of charting an organization’s futurecourse, figuring out the what strategic moves andapproaches to undertake, and then orchestratingexecution of the chosen strategy as close toperfection as is managerially possible. One of thebiggest factors in determining whether theorganization performs up to its potential or not isthe extent to which the management team performsthe strategic making and strategic implementingfunctions. Indeed

Good strategy and good implementation are the most trustworthy

proof of good management



A strategic plan, then, is the bridge to the future, which an organization uses to lead from what it is to what it envisions it can become.



ENVIRONMENT:

The environmental factors affecting Coca Cola canbe divided into:

THE GENERAL ENVIRONMENT:The Coca Cola Beverages Pakistan limited has a verystrong potential in the future as Pakistanipopulation is increasing and there is a shift inthe consumer perception of its conservatism and thestigma, which was attached to it as an Americanproduct, is losing its effect. Increase in thelevel of inflation is a major concern for thecompany as the purchasing power of the people iseroding day by day. As there is an increase in thedual career families and women has started workingin the offices with a great enthusiasm so it can bea capitalizing point for the company. Thelegal/political environment does have much effecton this company. As there has been a continuouschange in the governments and the policies relatedto the duties and taxation so it is relatively lessimmune to changes in this sectors of theenvironment.

THE TASK ENVIRONMENT:As Coca Cola has acquired 6 more plants in thecountry from their franchisees so it will increasetheir share as they are having more professionalpeople in their management. The consumers of CCBPLare people from all the cultures and all the levelof incomes. It is a company who is distributing itsproducts to the masses. Apart from this they have



some exclusive customers who are categorized asindustrial customers these are: KFC, PIA, PearlContinental, Sheraton, etc. With the acquisition ofthe new plants they have hired MBAs just toincrease the level of professionalism. Their majorcompetitors are Pepsi, RC cola, and some localproducts, which are manufactured in the cottages.Apart from these they consider all the thirstquenching products as their indirect competitorslike Nestle, Haleeb, Milo etc. As for as suppliersare concerned they import their raw materials fromthe parent company.

THE CORPORATE OBJECTIVESCoca-Cola vision statement:

“We will become the best andthe biggest anchor bottler inthe world”

CCBPL has a very flat hierarchy, consisting of justthree layers. Thus, the top management handles mostof the goals setting and planning activities.



The objectives of this company can be classifiedas:

STRATEGIC GOALS:The strategic goals are considered when company isthinking of the long-term objectives but at cocacola strategic objectives and goals are set up forthree years. These strategic goals are decide bythe top management with consultation by the parentcompany head quartered at Singapore. However, theyare reviewed every year in the annual meeting tomake sure that they are in line with the changingenvironment. They are:

To continue to be an organization providing thequality products to the valuable customers.

To select and retain the professional peoplefor the organization.

To project an outstanding corporate image. To satisfy the customer through extra ordinary

service and an excellent service along with thecomplete tactical and operational support.

TACTICAL GOALS:The top management of the company on an annualbasis devises these goals together with theconsultation of the lower level employees. Theneach departmental director is given these annualtasks that then subdivide it on the quarterly ormonthly basis to have a proper check to ensure thatthese objectives are achieved, mainly throughmarketing, is the job of the director of eachdivision. For this year, these goals are:



To increase the revenues by 20% as compared tolast year.

To increase the total retail customers byaround 10%.

To increase the market share by 5%. To reactivate the discontinued customers by

30%.

OPERATIONAL GOALS:Operational goals are decided by the top managementin consultation with the lower level employees.They are following the concept of management byobjectives (MBO). Each employee is assigned itsgoals and is told what is expected of him and thenhe is evaluated on the basis of certain rules andregulations followed evenly by the company.For example: a sales man is given following tasks,duties and certain targets: Each salesman has tooversee around 100-125 outlets. The frequency ofvisits to each outlet depends upon the sales ofthat particular outlet. Normally, a salesman has tovisit a single outlet thrice a week i.e. everyalternate day. This means that a salesman visits atleast 20-30 outlets per day.

The salesman has three basic functions to perform.

To find new customers, To retain existing ones, To bring back the discontinued accounts.

Each salesman has to bring in at least three newaccounts every month. These may either be new



customers or the reactivation of the discontinuedaccounts.Sales manager is made responsible for theperformance and achievement of operational goalsand is assigned to set certain milestones for thesalesman so as to give him proper feedback, whichdefinitely helps the salesman achievement of theabove-mentioned goals.

DECISION-MAKINGCompeting in the market place is like a war. You have

injuries and casualties, and the best strategy wins

John Collins

The decision-making process in CCBPL iscentralized. The model used is classical, wherebythe top management takes their time while makingdecisions and explore and evaluate all the possiblealternatives before choosing the rationallyeconomic and feasible solution. Programmed decisions are made only by the topmanagement with no consultation what so ever withthe line managers while the daily and routinedecisions are made by the line managers at themiddle level with the prior permission or approvalfrom the general manager. Decisions, which are normally taken at the topmanagement, are related to

The package positioning Trade discounts



Advertisements Price reductions Distribution

While recruiting new employees, the top managementapproves the vacancies and asks the Human CapitalDepartment to conduct the written test and thistest normally is conducted for the employees at thelower level. Then prospective applicants are shortlisted through the interview process. Then theBusiness and operations manager or general managerpersonally interviews the employees and then makesthe final decision about the selection himself.

Hence, the style of decision-making followed by theCCBPL model, is AII. That is, the decisions aremade on the basis of the inputs provided by thelower level employees and the managers at themiddle management level. Top management asks forthe suggestions and ideas of his subordinates andthen takes the final decision himself.However, the remaining decisions, which are mainlyrelated to the daily operations, are made by therespective managers who are eventually maderesponsible for the results.The management is very much cooperative andencourage its employees to come up with new ideasrelated to their duties and the work they do so asto increase the overall efficiency of theorganization and eventually increasing the profits.



ORGANIZING

ORGANOGRAM



ANALYSIS OF THE ORGANISATION STRUCTURE

DEPARTMENTALISATION:CCBPL is divided into different departments on thebasis of functional approach. People are groupedtogether on the basis of common skills and workactivities. This approach helps company inachieving the economies of scale through highquality of problem solving and lesser needs of thetraining of the employees.CCBPL is headed by the General Manager. There arefive departments at CCBPL namely, Production,Industrial Relations, Sales and Marketing, HumanCapital, and Finance and Accounting.Production Department is responsible for theoverall production of the CCBPL. There are 8 plantsof CCBPL operating throughout the country.Different areas are distributed the products on thebasis of nearness so as to reduce thetransportation cost.Industrial Relations Department is responsible fordealing with the problems related to the workingenvironment of the employees and the issues relatedto the labor unions.Sales and Marketing Department is responsible forthe making the product available in the market andto deal with the issues related to theadvertisements of the products.Human Capital Department is responsible for lookingfor the efficient pool of workers, selecting theprofessionals and makes them happy so that theyshould stick to the company. The Human Capital



department deals with management level employees’grievances. Finance Department deals with the overall costingand pricing of the products. This also handles theimport related issues of the company. Accountingdepartment assists the sales department in makinginvoices and payroll entries.

WORK SPECIALISATION:The work specialization is high, as each Manager ismade responsible for only a particular function,which is his expertise. There is no boredom ormonotony as each salesman is meeting the differentsort of person and the work is challenging andpromotions are based on performance there is nomonotony and boredom.

AUTHORITY AND RESPONSIBILITY:The salesman has to report to the sales manager.These sales managers are responsible for theperformance of the sales man and they are requiredto provide them timely feedback. They are alsorequired to provide the guidance at any time andrelated to the issues related to the performance ofthe employees. These salesmen are monitored on anon-going basis by their manager, which serves as aneffective control mechanism.The employees have a lot of authority,responsibility and information relative to the workthat they are doing. However, all the informationand authority relative to the work is provided bytheir respective managers.The procedure is same in the other departments aswell.



DELEGATION AND ACCOUNTABILITYThere is a high degree of delegation and delegationis done with proper authority and responsibility.Each manager is also made accountable for theactions of his subordinates. Proper instructionsand guidance is given at time to time to achievethe objectives by the respective managers.Apart from the delegating every manager isresponsible for motivating his juniors so as toincrease the effectiveness and efficiency of theemployees. Human Capital department also helpsemployees realize their potential and motivate themthrough different methods. They make sure that theygive the best in return to their managers. Thisincreases their performance, the quality of theirwork, and customer satisfaction.

SPAN OF CONTROL:The span of control is low as there are 3-5employees reporting to their managers. This lowstructure is due to the fact that organization is avertical and different people have different worksto do so. It is also difficult to control more thanfive people and still manage the resources andpeople in an effective manner.

RESOURCE ALLOCATION:As far as resource allocation is concerned, themanagers of each department have the authority toutilize the organizational resources wheneverneeded for the functions of his department. Theyhave to get the approval from the other managers ifthese assets belong to other managers. These



resources may be capital, human or any otheravailable.

ORGANISING THE HUMAN RESOURCES

Recruitment is normally done on the required positions and not on the standby basis. Recruitmentstarts whenever a supervisor or sales manager needsa salesperson and it is first approved by the general manager before sending it to the human resources department.All the vacancies are first internally advertised so that all the employees who fulfill the requirements can avail this opportunity. If there aren’t any suitable persons for a particular job then human resource department search its data bankand if there is no suitable person then at last it is advertised in the newspaper but it is rarely thecase at coca Cola for the sales man.Selection is based on different criterion for different positions. Education requirements are thefirst and the most important and are the first partof the screening of the personnel.After the screening stage, applicant is called for the aptitude test. For a salesman job simple arithmetic and general knowledge is tested. Know how of English is also necessary in some cases.After passing the aptitude test applicant is asked to appear for an interview. This interview is



normally carried out by the sales and human resource department. Purpose of this interview is to confirm the data and claims, which the applicanthas produced and made.If the applicant is selected, he is asked for four sureties or any other references, which he can makeand sometimes, human resource department also like to confirm from their Ex-Employers about the conduct and the reason for leaving of the applicant.

TRAINING: At Coca cola on the job training is given the utmost importance. At first a sales man is given information about the product, sales environment and company policies and procedures. Ethical behavior is emphasized most so as not to create anysort of bad habits which can cause great problems for the company. Normally a new sales man is supposed to work under another salesman to learn the basics of selling techniques and the overall environment in which he will be working.A salesman is then allowed to work under the salesman but he is asked to perform all the operations by his own. These include filling out the route card, dealing with the customers, communicating with to loader, cash management, setting the visi cooler and the next days order to be loaded. After doing all this if has any problemsin learning then he is guided by salesman, market developer, and sales manager if required.

Apart from this on the job training, the company also has some in-house training facilities. The



company has a sales hall in which all the sales personnel are given some tips regarding the changesin the selling environment and how to improve efficiency and efficacy. These tips are normally given by the general manager.

Coca Cola also arranges some type of seminars, workshops and modules related to the sales management, Forecasting of the daily sales, merchandising, selling skills, supervisory techniques and other areas related to the sales.

Coca Cola does not have any library and special trainers but they do have the separate space for the training and they also use some sort of videos to elaborate and show the examples of effective selling skills and techniques.

To maintain the professional employees company has a policy of promotion from within. Promotions are based on the performance, which is measured very objectively. Apart from this the company pays its employees more than the industry wages. Not only the wages and salary but different other benefits are also given to employees to motivate and retain them in the organization. The company also has an effective incentive plan.



LEADING

LEADERSHIP STYLEThe general manager of the company is at thetopmost position in the organizational hierarchy,Even though he is not directly involved in itsoperations he is responsible for taking majoradministrative decisions regarding the companypolicy and Operations. Departmental managers areresponsible for leading and directing theirsubordinates. These leaders focus on these areas:

Increasing business with a coordinatedapproach by helping each other in itsoperations.

Encouraging the employees to give new ideasso as to increase the customer satisfaction.

As there is a very high degree of delegation andparticipation so they believe that the leadershipstyle used in all the departments of CCBPL isdemocratic. The concept of team management is onlypracticed in the sales and marketing department asthey have to work in dependence of one another.Subordinates are given a fair treatment and aredealt in a very good manner so as to give them afeeling that you are not only an employee but alsoa member of the family.The managers at CCBPL are very supportive as theyuse teams and treat subordinates as equals, andhave a highly open communication system. They areparticipative since they encourage the involvement



of the employees in decision-making and make use ofgroup discussions. However, some monetary and non-monetary rewards are used to create a highinvolvement from the employees especially at thelower level.

MOTIVATIONEmployee motivation is given a very highconsideration at CCBPL. At CCBPL they have thepolicy of promotion from within policy. Promotionsare bestowed on the performance basis. Thisperformance base motivates employees to work hardand achieve the goals, which are very objective andare perceived achievable by most of the employees.Apart from this compensation plan is also amotivating factor as CCBPL is paying more than theindustry averages. Not only this differentcampaigns and competitions between the employeesitself are also used to motivate the employees.Managers play a vital role in motivating employeesas they give them the timely feedback about theiractivities. They also help them solve differentproblems, which can be job related or personalproblems. Working environment and a challengingmilestone are a major factor in employee motivationat CCBPL.

COMMUNICATIONThere is open environment in CCBPL, whichdiscourages barriers among the members sharinginformation. The top management consults lowerranks before deciding on the policy matters andthen these things are communicated downwards. Everyemployee is allowed to see the general manager at



any time if he has any problem. Inter departmentalcommunication is done through formal and informalmanners. Grapevine is also used to get the feedbackabout the employees’ views about the management.

CORPORATE CULTUREThe Top management at coca cola also try toemphasise to follow the prescribed culture of theorganization. CCBPL has formal and documentedvalues that are communicated to all the employees.To ensure proper application of the rules andbehaviour of the values, the top management act asrole models, and closely administer and reviewtheir employee’s behaviour.

THE SLOGAN:

“ALWAYS COCA COLA”

CONTROLLING



Control is done through the evaluation, which isbased on the very objective basis. Certain criteriaare fixed in advance and if these criteria are notmet then the employees are asked and evaluated forthe reasons and corrective actions are taken by therespective managers. Different departments havedifferent criteria and different reporting andcontrolling systems. The reporting, evaluation andcontrol system of sales departments is follows:

Sales Person’s Reporting system:Every sales person directly reports to marketdeveloper of his area. A sales person is supposedto give him a daily report of his activities and heis free to ask for any kind of assistance from themarket developer.Every salesperson is given an attendance punchcard, which records his arrival and departure time.He is also given a route call card, which he issupposed to fill out. This card includes all thedetails about the visits of the outlets, time spenton these outlets, sales made on these outlets, timespent on these outlets, sales made on theseoutlets, time during travelling, names of theloaders and salesperson’s time in and time out ofthe vehicle.

Apart from this a sales person is also given a formto fill up for the next days order to be loaded inthe truck. This basically tells about the totalsales of the salesman according to the brand and



the size of the product. This basically is used bythe human resources department to evaluate theperformance and calculating the total salary of thesalesman.

Sales Person’s Evaluation System:Every salesperson’s evaluation is done on quarterlybasis. Evaluation helps the company to promote thepeople to the higher levels of the organization.This evaluation also motivates salespeople to workhard and get the promotion or at least the monetaryrewards, which are given not only to the bestsalesman but the best market developer and the bestsales manager of the year.

Performance is evaluated on the basis ofperformance development plan. Performance ismeasured on the basis of achievement of thetargets, which are set and communicated at the verybeginning of the year to each sales manager, eachquarter to every market developer and every monthto each salesperson. This performance developmentplan evaluates the sales people on the basis ofcall slips, Route call, Call completion, Effectiveand productive call, attendance, growth in sales,market development and the punctuality of thesalesman.



CONCLUSION

SWOT ANALYSIS

STRENGTHS

STRONG MUTINATIONAL

Coca-Cola has a brand name that holds its ownprestige in the world market. The multinationalentity of the Coca-Cola Pakistan gives it an edgeupon other competitors. The management of thisbeverage company comprises of one of the mostprofessional people and the strong financialfirmness guarantees it a solid backing to sell itsproducts.

EMINENT BRAND NAME

It is rated as the world’s number one colddrink and is famed for its internationally well-known brand name “Coca-Cola”.

QUALITY OF PRODUCTS

The product quality has improved due toupgraded quality of packaging and the amelioratedliquid in comparison to its competitors. Mypersonal experience is that the product quality andtaste is far better than any product of it’s kindand also the improvement in packaging and the



commencement of plastic shells has received afavorable response from the dealers and theloaders.

REGULAR SUPPLY

The regular supply of the products is anotherstrength of the company. The products are regularlysupplied to the dealers through proficient means ofdelivering and distribution has given Coca-ColaPakistan an added advantage. Coke trucks supply theproducts regularly and always have the desiredproducts for the dealers.

AVAILABILITY OF PRODUCTS

In the past Coca-Cola was not available in abundance but now stiff measures has been taken to increase its availability. The increase in the procurement of Coca-Cola has done through new supply and distribution measures and advertising campaigns

AGGRESSIVENESS IN THE MARKET

Its marketing strategy is very aggressive whichaids it in further and incessant production anddistribution of its products. It gives trade offersto its dealers for storing more and more cokeproducts and the signage strategies andagglomeration of all the marketing strategiesproves that it has a very aggressive marketingstrategy. This will help Coca-Cola Pakistan instrengthening its integrity in the market.



WEAKNESSES

DISSATISFACTION AMONG STAFF

One of the major weaknesses as in majority of companies is the lack of co-ordination between the management and the worker. In short there is a weakpoint in their Human Resource management. Workers feel that they are being exploited and are not given the remuneration that they deserve. The management fault is that they think that the workeris indefatigable and can work tirelessly. The toughschedule results into limited rest for them and there are no holidays.

MOTIVATIONAL FACTORS

The employees lack motivation simply because ofthe huge communication gap between them and themanagement. Thus grievances reign high for theyfeel that their problems and recommendations arenot being aired the top management. The workersexpect to be adequately satisfied in terms of theirsalary and compensations

CENTRALIZED DECISION MAKING

The decision making process in the company ishighly centralized and the workers feel that there



exists no proper authority existing in the firm.The salesmen feel dissatisfied for they are totallypowerless to make any decisions themselves. Indealing with their buyers they have not theslightest authority to allow them any credit ordiscount.

LESS AVAILIBITY

The product is not available to the extent thatit should be. If Coca-Cola wants to make an impactin the market they will have to do more than theyare doing at the present moment.

LACK OF PROMOTION

Promotional activities have been greatlyneglected in many areas. In an interview with theroute officer and a few salesmen it was clear thatfor areas such as Nazimabad and Liaquatabad no heedhas been paid both to the singe and promotionalactivities. This indeed results in a high degree ofdifficulty for coke in penetrating the market.

MANUAL PAPER WORK

The huge amount paper work takes a lot of time,which could be effectively channeled to otherimportant activities. The salesmen have to do a lotof clerical work i.e. he has to fill a lot of forms(call slips, route riding forms, cash memos,clearing bills etc.) at the shops and also afterarriving back at the factory. At the same time themanagement also complains that the paper work leads



to a lot of pilferage by the employees. All suchactivities cause an overall great reduction inproductivity.

LACK OF COORDINATION

In the factory there is a co-ordination lagbetween the activities of the marketing, sales andrepairing departments. The sales departmentcomplains that the marketing department does notpay any heed to their problems. The salesdepartment also complains that the repair of thevisicoolers is always delayed. Until or unlessCoca-Cola restructures its co-coordinatingactivities the availability of its product would bealways delayed.

OPPORTUNITIES

NEW MARKETS

We know that Coke came to Pakistan in 1996 and since it is working hard to develop its market. We think that Coca-Cola can secure new dealers and buyers of its product as still large part of the country is still devoid of its products. It can promote its products in the younger generation by targeting the new outlets being opened due to



improved law & order situation and a growing population.

THREATS

FAKE PRODUCTS

In areas such as Liaqatabad, New Karachi,Glimmeretc. Fake beverages by the name of coke arebeing supplied by unknown people. Such activitiesreally hamper the company’s name and its brandoriginality. Above all the fake beverages suppliedare almost similar to the taste of the originalCoke brand and not everyone can decipher thedifference between the original and the fakeproduct. This is in fact a great threat to Coca-Cola for unworthy people is taking advantage of itsbrand name and spoiling its good name in themarket.

COMPETITOR’S SCHEMES

For the purpose of promoting its product, Coca-Cola’s competitors have been doing much more thanCoke itself is doing. For example Pepsi’s signageoperations have been very successful. In additionto this Pepsi is also giving very liberal creditpolicies to its dealers, which gives the dealers agreater incentive to buy Pepsi rather than Coke.



THE MANGO SEASON

The mango season is a great threat to Coca-Cola’s operations and also its sales. According tostatistics during the mango season Coca-Cola’ssales are reduced by about 25-30%. This is indeed ahuge blow to Coca-Cola especially since it is afairly new company in the market. The greatestaffect is on the revenue from the rural areas wheremango drinks take over. However this is one factorthat Coke cannot do anything about for it is not intheir hands. If the mango season is to come then itwill and nothing can be done about it.



ACKNOWLEDGMENTS

I would take this opportunity to thank Ms. Sadie Kari,our teacher for the course of Principles ofManagement at the Institute of Business AdministrationKarachi, for her valuable support and encouragementwhich she has offered. Her words of wisdom willalways be remembered, and I am convinced that theknowledge of management that she has imparted wouldgo a long way in making good managers and helpingus all through our professional career. This report cannot be solely attributed to myeffort but it is indeed the joint effort of manyfriends and well-wishers. There were times in thecourse of preparing this report when things weretough and the future seemed dark. It could not havebeen possible to write it, without the immense helpof a few individuals to whom I would like to offermy gratitude.

In particular I would like to thank Mr. Frederick Gill(Regional sales Manager, Karachi) of Coca ColaCorporation for his immense contribution towardsthis report and Mr. Mehmood Ajmal khan (Human CapitalManager). Without their cooperation and the amountof time they gave me, this report would not haveexisted.

Thanks a lot!


MANAGEMENT REPORT

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