The Coca-Cola Company was founded in 1892. Since its inception, the organization has seen a steady increase in its market share over the years, and to this day has operations in over 200 countries worldwide. To achieve such success in its competitive market, Coca-Cola has employed sound strategies that have helped it become among the leaders in its industry. The Coca-Cola Company utilizes Market Based Management (MBM) techniques as well as Value Driven Management (VDM) techniques within the organization and in its market to help the firm sustain its stronghold of the market.
Market Based Management is premised upon a free market system, as described by Jones and George (2014). The principle is based around pleasing the customer by meeting supply with demand. It is imperative to be able to understand the market, and then to react accordingly to the market. These customer-centric values are essential to organizational success in the short-term and long-term (Wenstein, 2012). The values in MBM are integrated into Value Driven Management values because the common denominator between the two is ultimately to add value over time. Any variable that increases customer satisfaction, in turn adds value over time to an organization.
According to Pohlman (1995), the purpose of Value Driven Management is for employees to consider the implications, positive and negative if any, of how certain proposed actions or decisions will affect the respective organization over time. VDM was constructed as a more encompassing approach to building a successful organization. In this context, employees consist of all leadership, management, and staff because they all share those same responsibilities in a broad manner (Pohlman, 1995). Pohlman opines that “Rather than being unidimensional as many other theories have been, Value Driven Management takes into account what drives action of all relevant groups and how this impacts the value of the organization over time” (1995). In essence, there are many moving parts in respect to value creation, however, a firm must identify its competitive advantage, and it must sustain it while continuing to build upon it. In order to maximize long term profit, employees within an organization should keep the aforementioned ideas in mind because there will always be opportunity costs between short-term and long-term gains. The key is to not sacrifice long-term profit for the short-term. All employees within an organization must be cognizant of all factors and variables to successfully implement this strategy.
When broaching the subject of Value Driven Management, it is integral to evaluate short-term and long-term consequences; the key is maximizing value over time (Pohlman, 1995). It is also prudent to recognize one’s own role in an organization, what is valued, be aware of the time horizon, and to avoid gain in the short-term benefit at the expense of long-term benefit (Pohlman, 1995).
The Coca-Cola Company...