Organizational Change Strategies- Customer Orientation

Change is the only thing that remains constant in an organization and therefore it does not just happen. Proper management is needed. The main objective for change is to transform the organization into a better one. Strategic change deals with broad and long-term issues of the organization that require change. It is about the future defined by strategic vision and scope. It covers the mission of the organization, corporate philosophy on growth, quality, and innovation, values concerning employees, customers and strategic positioning to achieve competitive advantage. Therefore, strategic change requires proper planning linked to the firm’s resources (Pettigrew, 1991)

The coca cola company is a multi-national company and it is the world’s largest beverage company. This company owns, licenses and markets over five hundred nonalcoholic drink beverages, mostly sparkling ones but also other varieties including enhanced water, juices and juice drinks, ready-to-drink teas and coffee; energy and sports drinks. Among these are top five non-alcoholic sparkling drinks namely, coca cola, diet coke, Fanta and sprite. These products are made available to consumers though out the world via their network of company owned or controlled bottling and distribution operations as well as independently owned bottling partners, distributors, wholesalers and retailers.

This company’s success depends on their consumers who are provided with a variety of products to suit their lifestyles. The human resource determines further success by doing their work effectively every day. Coca Cola Company competes in the non-alcoholic segment, which is highly competitive due to the other companies. For example, Pepsi Company, Nestle, Kraft Foods, Unilever among others are the primary competitors. The employees in this company are referred to as associates. As of December 31 2011 and 2010, they had an approximate 146,200 and 139,600 number of associates respectively. These associates are covered by a collective bargaining agreement, which takes three to five years to be re-negotiated.

Firm’s strategies are greatly influenced by the business environment (Porter, 1990). Deciding on the strategy to work on today depends on the global view of the business environment and especially for Multinational companies. Research on strategy shows that customer dimension should be put into consideration. Any company, at the industrial level attracts their customers, at the national level, customer expectations are reached through surveys but at the global level, things become complex. The product that any company produces should be customized to meet a particular culture’s needs and tastes thus gathering a greater market share. This visibility report will focus on customer orientation strategy to show how its implementation will influence the company’s strategies to competitive advantage through customer adaptation. The research will draw its sources from past research related to customer orientation, the Coca Cola Company annual report, books and journals.

Stakeholder analysis

This strategic change focuses on the coca cola company whose stakeholders are the employees, community, shareholders and most importantly are the customers. The target population here involves the consumers, which the company works to meet their needs. This change will therefore involve the management of the company as a whole and the employees to work towards meeting the customer needs. The products offered should also satisfy the customers to maintain customer loyalty.Through this change initiative, the company’s management will adopt an organizational culture that recognizes customers as the key players.

Problem statement

Marketing strategy in any company aims at reaching the customer and thus it has moved from a transaction-orientation to a customer-relationship-building orientation (Foxall, 1992). The customer has to be created for they define the business. Through marketing, a company should make sure they make the stuff that customers want (Holbrook, 1988). This is because nowadays customers are quite organized, well informed and more demanding. Companies should therefore work towards fitting the products to the customer by adapting the products to customers’ needs or tastes for this is more profitable (McKitterick, 1957). For this reason, customer orientation strategy should be implemented. Customer orientation can be defined as the dissemination of information and using it in the business unit (Kohl, 1990)

Further, it is the set of beliefs that put the customers’ interests first but not forgetting other stakeholders as owners, managers or employees in order to develop long-term profits for the company (Deshpande, 1993). The coca cola company is facing two major challenges that need attention. The first one is obesity and other health concerns by customers and other stakeholders. Consumers, public health officials and government officials are so much concerned about health issues associated with obesity among the young people. Some researchers, health officials and guidelines on diet are discouraging consumers from drinking sugar-sweetened beverages. This has resulted in bad publicity, new taxes on sugar-sweetened beverages and additional government regulations with regard to marketing. Demand for their products by customers is therefore low.

Another problem is about product safety or quality. Product contamination, production and sale of counterfeit products tarnish the company’s brand image. Although the company has made a commitment to respect all human rights, there is still a problem. All these challenges touch on the consumer or the customer and affect their loyalty. These are critical problems, which if not well addressed; the company can easily leave the scene. Through the customer orientation strategy, these problems can be overcome.

Change drivers

The need for strategic changes should be carried out systematically for these changes can easily affect industry and bring a further need to change the strategies (Roberts, 2007). Drivers for this change can be internal or external. Internal ones arise from the company itself while the external are associated with forces from outside the company. The internal drivers include innovation, culture, need to improve products and services and the need to build the company image and maintain customer loyalty. From the problem statement, the challenges facing the coca cola company require new ideas and creativity to be able to get a solution. For example, new products that do not raise health concerns, proper inspection and storage to avoid contamination and keeping closer customer contact are ideas that need to be worked on through innovation.

Due to the concerns raised, organizational culture is a drive to this strategic change. The change in behaviors, attitudes, beliefs and policies will enable the company to work effectively in a cross-cultural situation (Saldana, 20110. Coca cola is a multinational company with branches all over the world. There is therefore a need to examine their organizational culture to enable them to relate well with customers from all over the world in a multi-cultural context. The concern on the products’ quality calls for improvement in the quality of products. One of the challenges the company is facing is bad publicity and therefore there is a need to build on the company image and maintain customer loyalty.

The external change drivers are issues to do with globalization, hyper competition and advancement in education. Globalization has turned the world into a small village where new markets spring up and therefore this calls for organizational dynamism. These new markets can only be ventured through customer orientation. There are varieties of companies that deal withnon-alcoholic beverage drinks business. For this reason, the competition is therefore very high and this calls for a strategic change. To deal with competitors, the customers have to be given a priority. Nowadays, consumers are highly educated and they have plenty of information on what is good for them. Due to this, an extensive market research has to be done to ensure any concern or complaint is captured and addressed in time.

Benefits of this change

Implementing this strategy will bring so many benefits including customer loyalty will be maintained, business intelligence, competitive advantage, mass sales, motivation of associates, production of quality products that are fit for human consumption and so much more. Customers associate themselves with organizations that recognize them, listen to their complaints and act appropriately, produce a variety of products that meet their needs and of quality. They are not always comfortable with status quo and therefore organizations should ensure that they work on product rebranding that should be in line with the current technology. If all these issues are addressed, then customer loyalty is maintained.

Another benefit touches on business intelligence where the company will gather information on the concerns and complaints of customers to be able to meet their needs. This will come because of intensive market research. The company will gain competitive advantage due to the positive publicity. It will be in a position to counter competition from the other companies. Sales will also be on the increase because the company will venture in other market segments. Employees or the associates of the company will be motivated since this change will ensure continuous training and development. This will empower them with knowledge and hence they will be motivated to perform. Quality is of the emphasis as far as this change is concerned. Therefore, products that are fit for human consumption will be produced hence reduce on customer complaints. All these benefits justify the need for the implementation of the change.

Tangible and intangible costs associated with this change

Strategic change is a process and therefore there are costs incurred during the implementation. Market research is very necessary but it comes at a cost. Collecting information from consumers will involve one on one contact with the customer themselves where they air their opinions concerning the company products. The company has to address the health issue and therefore it needs to stay close to the health officials. The concerned products have to be tested to verify whether they have the said effects. All this involve expenses.

Associates will be trained continuously to improve their performance and customer relation skills. They will also be trained on the new methods of production to ensure quality. This will cost the company a great deal. A lot of product promotion needs to be done to ensure the company creates awareness that the quality of their products has just become better and it will ensure an increase in sales. This will be accompanied by intensive advertising and product rebranding to clear any rumor that may spoil the company’s image.Another cost will be associated with performance appraisals where the performance of the associates will be rated and closely monitored. The best performing associates will be rewarded to increase their motivation. To further better the company’s image, a lot of corporate social responsibility is required. This will cost the company time and resources.

Context analysis

Out of the discussion so far, it is evident that there is a need to implement this change due to the benefits that come along. If the company does not embrace this change, it means that the problems that it is facing will not be done away with. Customers will keep on complaining about inefficient products that do not meet their needs thus the company will be adversely affected. The other companies who are primary competitors are likely to do well in the market and gain a competitive advantage. However, implementation of this change will depend on the amount of resources allocated and the readiness of the company to embrace the change. This change may also be affected by weather conditions since during hot seasons the demand for the beverages is high as compared to the cold seasons where the demand is low.

Change assessment- Kurt Lewin’s change model

According to Lewin, change is normal to any organization irrespective of the size, industry and age. Therefore, as the world is changing, organizations must change too. Handling change well brings success to the organization but the organizations that are comfortable with the status quo have problems. Managing change well depends on the type of the business, the nature of the change and how the people involved understand the change process. This model is composed of three stages namely unfreeze, change and refreeze (Cummings, 2009). To help us understand this model, Lewin compares it to a block of ice that needs to be changed into a different shape. If one wants a cone of ice out of a large ice cube, they should melt the ice to enable it to change (unfreeze). The iced water is then molded to make the required shape (change). The final step is to solidify the new shape (refreeze). Before one embarks on a change process, they should prepare adequately.

Unfreeze

This stage involves creating awareness to the organization that the change is necessary. Every person in the organization has to be uncomfortable with the status quo. Key issues like increased customer complaints, declining sales, declining profits should be emphasized so that people see the need to change. Preparing the organization to accept change, attitudes, beliefs, values and behaviors need to be challenged for they may not support the change. This motivates people to accept that they have to embrace the change. Practically, the change initiative in Coca Cola Company has to start by surveying the company as a whole in order to understand the current position. Top management has to support this initiative. Then the need for change will be emphasized by focusing on the vision that has to be communicated in terms of the change required. Any doubts or concerns will be managed through communication.

Change

The unfreeze stage creates uncertainty and in the change stage people begin to resolve it by coming up with new ways of doing things. However, this does not just happen; it has to take time for people require time to get into the right track. Resistance to change may arise because of the people that are comfortable with the current state of things. This should be foreseen and managed well. In the coca cola company, the change initiative on customer orientation will be communicated often during the planning and implementation stages. Everyone will know the benefits of the initiative and any questions will be answered openly and honestly. There will be a high involvement of the associates and the line managers will be used to provide day-to-day direction. To reinforce the change, training sessions will be conducted especially on customer relations, product quality management and excellent performance of work will be emphasized. This will empower people to embrace the change completely.

Refreeze

This happens when the change becomes a reality to people. This can be indicated by a stable organizational structure, clear job description, reduced customer complaints and high sales. However, people have to be helped to reflect and institutionalize the change by ensuring that the change is used always and incorporated in all organizational operations. The new sense of stability instills confidence among employees and motivates them to perform. As for the coca cola company, the change initiative will be linked with the organizational culture where support attributes and barriers to sustaining the change are identified. The management has to support the change, a reward system will be created where best performers will be rewarded, feedback on how the change is doing will be provided and a proper organizational structure in link with the culture of the company will be adopted. Continued support and training will be encouraged as well to keep people informed.

Lastly, the change initiative will be celebrated where people will be thanked for their endurance and be in a position to believe that future changes will be successful. The reason as to why I prefer this change model is because it is simple to understand and implement. It involves only three stages, which can be easily understood by every stakeholder of the organization. After the implementation of the change, there should be proper monitoring and evaluation. This helps in showing whether the change initiative is effective or not. Indicators of effectiveness will be reduced customer complaints, increased sales, positive publicity about the company, increased associates’ morale and so much more.

Recommendations

Firstly, the company should organize seminars, workshops and conferences to emphasize the need for a competent organizational culture and its impact on quality products thus customer orientation. Information from customers can be used during the training sessions. Pioneering a change without a proper organizational culture does not lead to success (Oakland, 2005). The company should devise an organizational structure that is based on customer orientation. This provides customer guidance and transforms the organization into a social one. The company and its members focus on customer understanding and satisfaction (Huff, 2005). There is also a need for the company to emphasize on public relations, which will focus on delivering correct and exact information about the company. This information should be printed on brochures, newspapers, the internet and updates made in the company’s website.

Employee performance assessments should be done regularly and awards given based on the best performers. A 360-degree approach to performance approach should be used where fellow employees, supervisors, customers and other company’s stakeholders give information on employee performance. The company needs to establish a proper knowledge-oriented system. This will ensure continued better performance. The company should allow knowledge to disseminate freely and easily (Cepeda, 2007). The company’s environment needs to be shaped to accept new ideas and innovations. This leads to new ways of doing things and a good response to customer problems. High involvement also motivates employees to perform well.

Emphasis on quality is important and this should be achieved by establishing functional quality control departments to ensure people do not sleep on their jobs. Issues like contamination may arise possibly because of negligence or machines that malfunction. Every operational stage in the company has to be controlled (Barzegari, 2007). Emotional and trust-building leadership is important. Managers should cultivate a culture of trust among their subordinates. This plays a critical role in satisfaction, commitment and loyalty in serving customers (Leban, 2004). Justice and professional ethics should be put into a consideration where all the “dos” and the “don’ts” are obeyed in the company operations to ensure quality of products and services. This generates products that are fit for human consumption (Yaghinlu, 2003).

The company should create a sense of belonging, loyalty and organizational citizenship. This is cultivated by the culture of the organization. Associates should feel proud to be associated with the company. They should feel part of it thus they show lot of commitment to their work. Organizational citizenship will greatly depend on the kind of working environment managers create for their associates. It should be a conducive one based on trust, proper work design to avoid monotony and career development. If the associates own the company, they will not want it to fail and therefore they will treat customers as required. This increases the relationship among themselves and between them and customers.

The marketing concept forms a base to customer orientation. The economy is competitive and so customers choose where to buy depending on their preferences. In order for the company to succeed, it must provide a superior value, which is better than competitors are as far as quality is concerned, prices and customer service delivery. The market concept should therefore find the best way to meet the customers’ needs and adopt this strategic change initiative. This calls for internal marketing as well as external dimension. The internal dimension comprises of teamwork, creation of customers and business partners data base. The external dimension involves formation of partnership relations not only with customers but also with the suppliers and distributors.

In conclusion, customer orientation is a strategy for any industry or company that wishes to succeed. With globalization and internalization of many companies, customer orientation is a common trend. Companies need to differentiate and create a closer customer contact. This closer customer relationship maintains the national population and helps to know their tastes and preferences of its customers. It will cost the company money and time to study customers’ behavior but if the company needs to maintain their standards then it has no choice. Customer orientation is one of the best ways to venture in new markets, reach new customers on developing markets, increase market shares and become a market leader in mature markets. Based on the discussion, Coca cola Company needs to embrace and implement customer orientation strategy in order to better their best.

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