Assessing the Advantages and Disadvantages of Coca Cola Company - Case Study Example

Business Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 19th November 2012 Introduction Coca Cola Company is a leading producer of beverage and soft drinks. The company’s mission statement is to provide refreshments, create optimism, happiness, value and bring a difference to the society. The company’s vision is to inspire a suitable working environment. Additionally, it aims at developing quality beverage products, social responsibility and effective production. Some of the company’s values are leadership, accountability and integrity. In order to achieve these objectives, Coca Cola Company needs to understand the current trends and factors that shape the beverage and drinks business (Staff 2012). Social media refers to applications that allow social networking or interaction. The users of social media can share images, texts and videos. Social networking is becoming useful in marketing development of client base. Social media is currently viewed as a ‘must-have’ for any entrepreneur that wants to have a place to invest in both the traditional and digital market place (Bosari 2012). Some of the social networking sites applications that Coca Cola has been using are Twitter, Microsite, Face book, Pid Media and SocialTV. The aim of this paper is to analyse the advantages and disadvantages of social networking presence in Coca Cola Company (ABC Ballarat 2012) Social networking and media has several advantages The social media enables a business to attract more consumers especially during recession. This is because less marketing costs are incurred. For example, a company can post blogs and look for followers. This way, costs associated with face to face networking are reduced. Additionally blogs help in reducing wastage of time and money. They enable a business man to establish his professional credibility and experience to a large audience (Allen & Overy 2012). For example, Coca Cola Company has been running a promotion aimed at encouraging this year’s super bowl. The social media enables a business to create and improve brand awareness as well as to build connection with prospective clients and referral partners (Rajagopal 2012). This means that a company like Coca Cola can freely advertise its products and services as long as it follows the acceptable rules and conditions. By advertising via social media, the company is able to reach a wide number of prospective and existing clients (Allen & Overy 2012). Through the use of social media in its polar super bowl promotion, Coca Cola Company was able to gather the highest number of participants (Dachis Group 2012) Additionally, a business is allowed to publish its contents freely by respecting third parties’ rights such as trade mark and copy rights (Allen & Overy 2012). The visual nature of the social media attracts more people. For example, Coca Cola Company has been using SocialTV to engage directly with the consumers and avoid middlemen. Therefore, consumers are able to see and analyse the products. Coca Cola’s ‘thismoment.com’ involves entertainment across Latin America and Mexiso (Mcentire.2012). This means that advertising on TV is getting faced out (Furrier 2012). Businesses are currently incorporating social media. According to a survey conducted by Business Network International (BNI), 75% of businesses have run out of business due to their inability to use social media. For example, Coca Cola’s ‘Thismoment’ is enabling the company to interact with existing and prospective customers across South America. The ‘Paul McCaetney is an icing on Coca Cola’s promotion (Furrier 2012). This enables the company to continue retaining its clients. A business is restricted by terms and conditions, rules and regulations and privacy/ data protection laws. These restrict the level and type of content that the company can publish or advertise. While Coca Cola enables people to participate in its promotions, it is covered by the terms and conditions that it publishes in its social site (Connor 2012). This protects it against theft of online products and brand names. Social networking can enable a business to change its vision. This is because businesses are becoming more transparent. As a result, employees will be looking out for enterprise culture and stakeholders will be in search of corporate social responsibility. Therefore, a business will be forced to change their vision in order to incorporate the needs of its social networking platform. For example, Coca Cola Company aims at improving growth by offering innovative products to its consumers. It has managed to achieve this through social network promotions and campaigns. As a result, the company needs to envision its next move in the social network platform. Social networking enables a business to have collective intelligence and innovation. Collective thinking from employees and social media followers can enable a business to adopt new production strategies and meet consumer needs. Through social networking a business is able to attain employee excellence and to gain more knowledge in areas that interest them. Companies pay attention to comments from the online contacts. Therefore, social networking results to self-development. Social networking enables employee mobility. When employees publicize their skills and experience they become more solicited. This enables the company to observe and meet employees from various backgrounds and with diverse skills and experience. Additionally, some companies such as Coca Cola run promotions that enable its funs to experience mobility by touring the countries where the company is established. For example, in 2009 Coca Cola ran an Expedition 206 campaign. The company used social media to select three individuals that would travel the world in 2010. The aim of this travel was to visit all the 206 markets where Coca-Cola is established (Warren 2009). This idea helped the company to connect with customers. Businesses that use social networking may benefit from expanded reach, innovation of new and better products and transformation of CRM due to personalized customer contact centre. It also enables businesses to establish an external management channel by developing external networks that enable other businesses to market their products. Coca Cola’s new social networking project ‘Thismoment’ is giving a task to its call centre. This is because there are calls from customers enquiring about the promotion. As a result, the company is in a position to transform its CRM in order to ensure efficient and effective communication (Griffith 2012). Social networking enables businesses to access new markets, develop new strategies and niches. For example, through the TV promotion Coca Cola is able is able to reach the Latin American market. Social networking can also help businesses to change their mode of communication. This enables customers to see a company’s values. Figure 1 in the appendices page shows the maturity stages of a business that engages in digital network (The Business Impacts of Social Networking 2012). However, the social networking and media has various disadvantages There is need for a business to implement new ROI (Return on Investment) Concept. Social networking is more of sociological rather than technological. This makes it difficult to justify using the traditional ROI, if a company’s vision includes social networking. For example, it becomes difficult for Coca Cola to determine the returns it gets from its social network promotions and campaigns. Security risk: social networking poses risk to a company’s security. This is because as business partners and internal employees start using collaborative applications insecurity arises. Security providers also become reluctant in alleviating the situation because the internet is naturally an open source of information. Additionally, a business risks acquiring viruses that can cause damage to its information. Coca Cola Company faces a security risk to fraudsters and hackers who might try to manipulate the already available data. Intellectual property: it is important for businesses to be careful about the information that they reveal to external users. Internet search engines increase the risk of information leakage. Therefore, all the employees should be trained about intellectual property. Coca Company runs a risk of exposing its critical information to the public. This is because social media enables the employees of Coca Cola to engage with other social network members. This can result to breach of confidential information (Bueno 2012). Adoption: companies have a task of regularizing use of social networking tools. Therefore, they need to determine the critical mass of users of its online content. For example, studies show that only 1% to 20% of internet users create value by interacting online with other businesses. However, managers and executives of companies such as Coca Cola can oppose some of the social media campaigns that the company has been running. As a result this can affect the company’s vision and strategy (Brottlund 2009). Storage: a company that is engaged in social networking requires more storage space for media applications. Rich media lifecycle is one of the policies that a business can establish in order avoid or reduce online congestion. For example, Coca Cola needs enough space to carry out its campaigns. It also needs to budget for the trips that it organizes during the promotions. Interoperability: many applications are developing collaborative abilities. Therefore, there is need for interoperability and shared authentication schemes `(Lanuto 2012). Unhealthy speed in the corporate business: soft wares such as web 2.0 are fast. This means that the corporate world needs enough time to specify and implement business applications. Speed is necessary in keeping track with Coca Cola’s technological and mindset changes. It is also challenging for a business when striking employees use the social media, Capturing a business’s value; it is necessary for Coca Cola to establish a management system that can capture the value of a business’s online operations (Harrison 2012). Through social networking, businesses are at a risk of losing their employees and human capital. This Is because the internet increases employee mobility. This has become possible because employees are able to share and maintain professional profiles with international counterparts (The Business Impacts of Social Networking 2012). Businesses risk losing the control they have over their image through social networking. For example, in Coca Cola enables bloggers and viewers of its website to post their views and comments and to review the posts. Some of the views are usually negative. Therefore, they portray a bad image about the company. This is especially is the comments earn a low review. Main Findings According to a 2012 report by the Social Media Marketing Industry: I. 94% of all businesses that have a marketing division relied on social media to market their products. an increased market exposure was realized among 85% of all businesses that use social media. Coca Cola Company falls is one of the companies that are using social networks such as Face book and SocialTV to promote their products. As a result, the company’s products have been known world-wide (Vries 2012). II. 58% of enterprises that have used social media marketing in a period of 3 years achieved increased sales volume over that period. III. In 2011 there were more than 40 million users of social media in Europe. Statistics show that one in every 1/3 to ½ of the globe is connected to social media.  The main disadvantages of social networking in Coca Cola Company are: I. High costs of running the promotions and campaigns II. Internet insecurity (cyber-crime and viruses) III. Breach of intellectual property by employees and IV. Poor image or reputation through blog reviews This information was collected through research from various articles posted on the internet. The source articles were reports and newspaper articles. Analysis and Conclusions  Social networks are currently being used by companies to promote their products and create awareness to the prospective clients. Some of the applications being used are Face book, You Tube, Google, SocialTV and Twitter. The paper analyses the impact that social networking has on Coca Cola Company. Some of the advantages that the company has obtained from social networking are brand awareness, free publishing of company’s products and employee excellence. On the contrary, social networking has disadvantages such as internet insecurity, breach of security, inadequate storage space and adoption. It is also important that businesses should note the following major points for using social media (Reilly 2012). To be selective and to concentrate on areas where the potential customers are likely to be established (Conner 2012) Use of YouTube videos helps in optimization Be social and engage with the customers Be interactive and responsive to people; invite them to communicate with you. Adapt and evolve your business Involve other people and form relationships with them; invest your time in them (Coleman 2012). References ABC Ballarat: Future forum: have your say on the challenges facing regional universities 2012, viewed 20 November 2012, . 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Furrier J 2012, Coca-Cola and Procter and Gamble Lead the way into the New Advertising Era of SocialTV… A Money Machine, viewed 20 November 2012, . Griffith, I 2012, How social media and digital marketing has impacted global branding, viewed 20 November 2012, . Harrison, C 2012, The Importance of Having a Gleaming Social Networking Presence, viewed 20 November 2012, . Lanuto, A 2012, Samsung challenges Coca-Cola in the 2012 brand Socialympics, viewed 20 November 2012, . Mcentire, C 2012, Effective Social Media in Supply Chain: The Search Is On, viewed 20 November 2012, . Rajagopal, R 2012, How Social Media Optimization Helps in Reaching out to Target Audience, viewed 20 November 2012, . Reilly, A 2012, What Do Small Businesses Do on Social Media?, viewed 20 November 2012, . Staff, J 2012, Our Company: Mission, Vision & Values, viewed 19 November 2012, < http://www.coca-colacompany.com/our-company/mission-vision-values>. The Business Impacts of Social Networking: A White Paper in Cooperation with Early Strategies Consulting 2012, viewed 20 November 2012, . Vries, C 2012, Social media expert preaches 'balance' in how it gets used to parents, students, viewed 20 November 2012, . Warren, C 2009, Inside Coca-Cola’s Social Media Strategy and Happiness Ambassador Program, viewed 20 November 2012, . Appendices Read More