Operational Sustainability Assignment Sample : The case of Coca Cola in Brazil
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Introduction
The present assignment will focus on critically intercepting the operational sustainability under the shape of the shared value creation approach of Coca Cola in Brazil. In this concern, a critical reflection will also be added regarding the significance of companies doing the most good in a profitable manner.
Shared value approach of Coca Cola in Brazil
Serving as the world’s largest beverage company, Coca-Cola has paid attention to empower the creation of social value across the Brazilian market. In this regard the company had initiated a conceptualized and innovative youth development program in Brazil namely Coletivo programs. In terms of critically defining the shared value approach undertaken by Coca Cola in Brazil, the Mintzberg argument has been considered.
Mintzberg argument
According to the theoretical concern, both business and moral reasons can be notified for an organization to be socially responsible. The business reasons include customer satisfaction, employee attraction, and commitment, conceptualization of long-term investment for benefiting the cooperation and others. Similarly, the moral reasons include social impact through all corporate activities, dependency upon the contribution from a wider set of stakeholder’s perspective in the society and others (Matinheikki et al. 2017).
The prime concern of the Coletivo retail program reflected to empower the organizational business under the shape of advancing both the social and economic condition within the operating community. However, this program has been spread across 126 sites throughout Brazil based on which it was able to reach 60,000 youth as per the end of 2013 (case study). The approach of shared value is notified to utilize a virtual cycle in terms of maximizing the business and social impact. Moreover, Coletivo retail programs initiated to establish youth development programs under the shape of enlarging the basic retail and merchandising skills along with the practice of interviewing and presentation techniques. This model also provides a source of high quality talent for key accounts including Subway and McDonalds (case study). Because of this, the accountability and credibility of Brazilian youth was enlarged with improved skills level. This intention of Coca-Cola reflects the organizational focus upon the conceptualization of community welfare for conceptualizing social responsibility according to the moral reasons (Chen et al. 2020).
In this concern, Coca-Cola initiated to develop additional approaches in terms of improving the technical training along with life skills and market access for the communities across Brazil. The additional programs might include Coletivo Forest, Coletivo logistics and production, Coletivo entrepreneurship, Coletivo events execution excellence, Coletivo recycling, Coletivo arts, and others (case study). Coletivo Forest has been a holistic approach to the development of community in the Amazon rainforest. It empowers the capabilities of super fruit harvesters by endowing with superior quality source of raw ingredients for Coca Cola Brazil beverages. Adequate training is also provided to the community members in order to promote environmental conservation with this model along with shared value creation (Barki, 2017).
Coletivo logistics and production focuses on preparing participants for jobs in production and warehousing, distribution and others. Similarly, Coletivo entrepreneurship focuses on providing sufficient training to the youth participants in order to further develop, formalize, and enhance small businesses with the potential for connecting with the Coca-Cola system value chain. Coletivo events execution excellence pays attention to preparing the Brazilian youth regarding hospitality roles along with supporting outsized events hosted in Brazil sponsored by or relevant to the Coca-Cola company. These events might embrace the 2016 Olympics, the Rock in Rio music festival, FIFA world cup and others (case study). Coletivo recycling supports sustainable co-operatives under the shape of recycling by investing in materials along with infrastructure and skills creation in order to enhance efficiency. It is also designed to cut down the expenditure of the Coca-Cola system. Lastly, the Coletivo arts delivers access towards formal design skills training along with markets regarding the items prepared from recycled beverage packaging.
The mentioned Coletivo approaches and models have been playing a major role in terms of connecting the local communities across the value chain of Coca Cola. Based on this attribute, the organization has been creating concrete social impact along with business benefit. From this viewpoint, the creation of the Coletivo platform can be recognized for embodying the optimism and values of Coca Cola (Jackson, 2018).
On the other hand, Coca-Cola had also initiated to empower their concern over the community by conceptualizing practo popular, which has been a government laid investment in reduced cost meal centers. This program was outlined in order to address both malnutrition and hunger amongst the lower socio-economic groups in Brazil. Coca-Cola also formed a cross-functional team in order to identify the social requirements in Brazil. In order to create shared value, Coca-Cola initiated to address several issues present in Brazil including low productivity among small retailers, comparatively low levels of formal education, high youth unemployment, limited access to economic opportunity and others (case study). In order to address these issues, Coca-Cola initiated to bring together both business and community leaders in terms of outlining the organizational shared value strategy by collaborating with the local community leaders in terms of informing the key design elements (Becerra-Vicario et al. 2020). These elements might include the target demographic and structure of the program, recruitment and incentives practices and others. A strong interrelation was also conceptualized by the Coca-Cola Brazil’s business leaders between business and social impact. The first Coletivo retail program was launched by Coca-Cola Brazil during 2009 in Sao Paulo and Recife. With this innovative program, Coca-Cola initiated to bolster the NGO partners management and leadership capabilities in Brazil in order to help them to conceptualize a secure growth with sustainable funding sources.
The mentioned aspects disclose the creation of social value in Brazil from the perspective of Coca-Cola.
Significance of shared value approach from Coca-Cola regarding value creation and strengthening market position
With the help of the shared value approach created by Coca-Cola in Brazil under the lights of Coletivo models, the organization initiated to create a decent value for their services by proactively communicating with the community. From the business perspective, the mentioned quality models have benefited Coca-Cola Brazil to experience 9.5 % growth of Coca-Cola sales in the Coletivo communities per year on average (case study). The prime concern behind this increasing sales growth among quality over communities reflects on having increasing small retailer productivity along with high levels of economic prosperity. This economic prosperity has been created by Coca-Cola Brazil under the lights of quality over programs. From the social perspective, it can be seen that 30% of quality for retail graduates found a job within six months of program completion, which contributed up to 50% increment over the household income among those who find employment (case study).
On the other hand, a transformational social impact was created by Coca-Cola Brazil among the qualitative of program participants. Because of this, greater consumer engagement with the Coca-Cola brand was conceptualized within the community. Apart from that, Coca-Cola initiated a 5by20 initiative with an intention to economically empower around 5 million women across the organizational global value chain by 2020. However, Coca-Cola had started the journey with empowering more than 49,000 women under the shape of political programs in Brazil as an integral part of their initiative (case study).
In order to define the market position empowerment of Coca-Cola in Brazil, the impact of the quality of programs upon Coca-Cola market position can be considered. As per the sustainability report of Coca-Cola Brazil, during 2016 it can be notified that it influenced around 186000 people across Brazil through their system social programs (cocacolabrasil, 2016). Moreover, around 36200 youth were trained by proactively relating with the quality of our youth programs, which has been a record in the history of the program. During the continuation of the Rio 2016 Olympic Games, more than 300 youth trained in the Coletivo platform (cocacolabrasil, 2016). Apparently, this mentioned community welfare initiatives considered by Coca-Cola in Brazil had also played a positive role in terms of extending their financial feasibility. It has been notified that Coca-Cola has been operating within the Brazilian beverage industry with a 27 % market share (forbes, 2014). The prime reason behind this market share increment of Coca-Cola Brazil reflects on having positive signs of revival in economic activity throughout the country along with increasing disposable incomes. In terms of continuing the maintenance of increasing market share from the perspective of Coca-Cola in Brazil, the company was assumed to generate an increment $ 3 billion annual retail sales throughout the nation by 2017 (forbes, 2014). The mentioned evidence supports the creation of shared value along with an empowered organizational position in the Brazilian market.
Critical discussion of the statement
In terms of critically discussing the provided statement, the triple bottom line theory has been considered.
Triple bottom line theory
The theoretical argument can be considered as an accounting framework with three different segmentation including social, financial and environmental (Hunt, 2017). In this aspect, the theory defines these three variables as people, profit, and planet respectively.
In the context of Coca-Cola Brazil, it has been seen that the mentioned Coletivo programs had been beneficial in terms of proactively engaging the community with the brand Coca-Cola. Moreover, the program also initiated to empower the internal skills and knowledge level of unemployed youth in Brazil based on which a fair amount of graduates from the program were able to get a job. This aspect had also been beneficial for increasing the household earnings across the Coletivo communities. The mentioned programs reflect Coca-Cola Brazil’s initiative regarding social welfare under the triple bottom line approach (Svensson et al. 2018).
Similarly, a greater attention was also provided by Coca-Cola in terms of empowering their market position and financial feasibility by relating the community with their innovative programs. Because of this, Coca-Cola was able to grab close to 27 % market share in Brazil during 2014 (forbes, 2014). Along with this, a decent sales growth was also reflected for Coca-Cola Brazil among the Coletivo retail community. The implementation of the program completely supports the organizational intention of doing the most good in a most profitable manner. For instance, it can be noted that the implementation of the program had resulted in an increase of more than 80% in exclusive brand love for Coca-Cola along with a 20% increment in brand love compared with the control communities (case study).
Similar consequences can be notified about the environmental welfare considered by Coca-Cola in Brazil. Under the shape of the Coletivo recycling program, Coca-Cola initiated to conceptualize recycling cooperatives by making adequate investment in infrastructure and skills creation in order to enlarge sustainability and efficiency.
With regards to the aforementioned analysis, Coca-Cola can be recognized to consider the most good in a profitable manner.
Conclusion
The overall assignment has disclosed creation of social value in Brazil from Coca-Cola through Coletivo programs. Moreover, this program also enlarged brand engagement of Coca-Cola with the local community along with the creation of shared value and empowered market position. The analysis also supports Coca-Cola to consider most good with most profitability.
References
Barki, E., 2017. Beyond the base of the pyramid: For an inclusive and purposeful capitalism. Revista Interdisciplinar de Marketing, 7(1), pp.77-85.
Becerra-Vicario, R., Leon-Gomez, A., Gutierrez-Ruiz, A.M. and Fernandez-Gamez, M.A., 2020. Sustainable Development through Corporate Social Responsibility, Corporate Philanthropy and Creating Shared Value. Technium Soc. Sci. J., 10, p.291.
Chen, Y.R.R., Hung-Baesecke, C.J.F., Bowen, S.A., Zerfass, A., Stacks, D.W. and Boyd, B., 2020. The role of leadership in shared value creation from the public’s perspective: A multi-continental study. Public Relations Review, 46(1), p.101749.
cocacolabrasil.com.br, 2016. SUSTAINABILITY REPORT Available at: https://www.cocacolabrasil.com.br/content/dam/journey/br/pt/private/pdfs/coca-cola-brazil-sustainability-report-2016.pdf [Accessed April 10 2021]
forbes.com, 2014. Coca-Cola In Brazil: Global Events And Energy Drinks Could Drive Growth (Part 1) Available at: https://www.forbes.com/sites/greatspeculations/2014/03/12/coca-cola-in-brazil-global-events-and-energy-drinks-could-drive-growth-part-1/?sh=7a4bbde27f5e [Accessed April 10 2021]
Hammer, J. and Pivo, G., 2017. The triple bottom line and sustainable economic development theory and practice. Economic Development Quarterly, 31(1), pp.25-36.
Hunt, S.D., 2017. Strategic marketing, sustainability, the triple bottom line, and resource-advantage (RA) theory: Securing the foundations of strategic marketing theory and research. AMS Review, 7(1), pp.52-66.
Jackson, A.L., 2018. An exploratory study on shared value and its influence on brand image (Doctoral dissertation, The IIE).
Matinheikki, J., Rajala, R. and Peltokorpi, A., 2017. From the profit of one toward benefitting many–Crafting a vision of shared value creation. Journal of Cleaner Production, 162, pp.S83-S93.
Svensson, G., Ferro, C., Høgevold, N., Padin, C., Varela, J.C.S. and Sarstedt, M., 2018. Framing the triple bottom line approach: direct and mediation effects between economic, social and environmental elements. Journal of cleaner production, 197, pp.972-991.
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