Why Manage Better?

Wednesday, November 23, 2011

For Coco-Cola, Business is still simple – deliver good quality product.

As I read through a post by ASQ’s MD Laurel Nelson-Rowe two things struck me like lightening.  Firstly, for Coke, their business still is about delivering a good quality product. Everywhere.  How much more simple can anything get.  Second was the title of their quality head.  Carletta Ooton is Chief Quality and Product Integrity Officer.  Wow! Product Integrity. 

Coke is one of my favorite companies. Not that I love their product.  I deeply respect them for lasting this long, profitably. They must be doing many things right.  I was surprised when they did not make the Built to Last and Good to Great lists from Jim Collins.  Coke and Citibank, to me exemplify an old-school charm that endures forever.  Citibank did lose its way a bit but is getting back on track. Coke, meanwhile, has been a pillar.

For insights into how Coke manages to remain a pillar please do watch a video series at http://asq.org/blog/2011/11/coca-colas-quality-culture/

How is Coke so enduring?  I don’t really know but have some views.

1. Have a fantastic product that actually serves a need.  Now I know many will jump and say what need does carbonated water serve? It may not for you and me, but it does serve for tons of people. And has done for over a century.

2. Make sure your product is known to as many potential customers as possible.  I have travelled a bit and I am sure many of you have done more than I have.  Have you ever seen a corner of our planet (leave Antarctica and Arctics out) without a Coke bottle or hoarding around?

3. Once it is known, make sure it is available. For me, the real game for companies such as Coke is won in distribution.  And Coke knows this well.

4. Don’t over-charge. If you do, someone else will come along and challenge you on price.  Since Coke leads the market on this, others have no choice to follow or differentiate.  Following doesn’t make you a leader and differentiating is tough.

5. Retain the core but improve everything else. Yes, Coke did make a major change to its taste but was smart enough to change back when customers didn’t like the change.  Since then they have retained the classic product but brought in many new flavors.

Most companies that last really long follow fairly simple business practices. They don’t over-complicate life.  Coke surely doesn’t.

1 comment:

Ashok M Vaishnav - અશોક વૈષ્ણવની ફુર્શતની પળો said...

Right from my days as raw management student, I wonder how do we justify incremental cost of advertsing to relatively non-essenatil and /or not-much-differnatiated prodcut or service.
While reading through this psot , that question has revisited me.