Christine Falcone
Management of Information Systems
December 9, 2014
Grantham University
Coca-Cola Is Everything The role that supply chain management is essential to decrease the cost of inventory and movement of that inventory. Coke has focused and dedicated considerable resources to standardize its supply chain to capitalize on the decrease in cost by standardizing its supply chain. Coke is using a standardize business and technology platform to standardize the bottling of their products across the entire chain. By removing the variations across the chain and ensuring both the corporately owned and independent franchise are utilizing the same language, process, and technology it removes the variations and increases the efficiency of the bottling. This in turn decreases cost in the supply chain and thus increasing revenue. The very principle of supply chain management and standardization of process affords, generally the benefits the Coke Corporation would be greater than the cost. Because of the overall benefit, it is likely a cost that the corporation will allocate for the independent franchise. (Haag, 2012) My Coke Rewards an example of a switching cost because the potential cost associated with it, is outweighed by the potential gains. The My Coke Rewards plan is a platform to keep the consumers who are loyal to the products; by offering them rewards. This in turn entices them to stay a product consumer. The additional potential gain for Coke is new consumers, the reward plan may attract other brand or product users, because to the potential gains, achieve through the rewards plan. If the definition of cost switching is a “negative costs that they a consumer incurs as a result of changing suppliers, brands or products”1 then the same principle can be applied to a corporation. The cost of switching platforms is and programs within a corporation would apply as well. The cost incurred by the company are outweighed, by the benefits. My Coke Reward is linked to far more than just coke products. It links it users to magazines and other corporate assets, which encourage consumers to switch, purchase or just maintain as a loyal consumer. The penalties associated with switching can be numerous depending on what switch one is undertaking. One example is the cost of switching phone services. This switch would entail ”effort needed to inform friends and relatives about a new telephone number after an operator switch; costs related to learning how to use the interface of a new mobile phone from a different brand; and costs in terms of time lost due to the paperwork necessary when switching to a new electricity provider.”2 There are other penalties to switching, such as fees for installing, equipment fees, emotional cost, time costs, and financial risks. When exploring cost of a switching these are all factors one must keep in mind to determine if the benefit is worth the switch. The business intelligence Coke can and is gathering from the My Cokes Rewards program is far reaching. The total number of visitors who access the site daily is approximately 300,000 per day. This type of exposure to consumer information and data mining is an extraordinary opportunity for coke to understand the consumer’s wants, need, and financial means to purchase products. The very basic information about the consumers would afford coke a basic profile of consumers. This would allow them to market and create products, enhance current products and track the desires of their loyal consumers and the newly acquired consumers through the rewards program. The customer relationship management activities that could be achieved for product marketing and even philanthropic opportunities such as links to American Red Cross are endless. The power is in the intelligence acquired. Knowledge is power, and the Coke Corporation has a great deal of this. Their influence is felt in the political environment as well. The information
