coke and dabur analysis
DESCRIPTION
Problems faced by Coca Cola and Dabur during HR restructuring as well as solutions tot he problem. Also includes SWOT analysis.TRANSCRIPT
HR Restructuring ofCoca-Cola & Dabur
Aditya Kohli B03
Parth Khurana B15
Vigneshwar B29
Shusank Parihar B39
Ajinkya Thorat B51
Mitali Barot B63
2
WHY WAS IT NEEDED?
CAUSE
• 4 CEOs replaced within 7 years.
• Huge losses and heavy employee attrition
• Negative mass media information
IMPACT
• Arch rivals: Pepsi making
• Write off assets worth $ 405 million
• Corruption and Rule Violation
3
THE COCA-COLA WAY- HR RESTRUCTURING
• Merging of four bottling operations in 1999
• Two new companies -Coca Cola India and Coca Cola Beverages
• Plant Incharge became Profit Centre Head
• Regions increased from 3 to 6
• People driven company
• VRS system
• Talent development
• Salary restructuring and Cutting Expenses
4
ISSUES DURING RESTRUCTURING
• Reports received for wrongdoings in North India operations
• Large number of employee resigning due to regionalization including Senior managers
• Violation in discounting terms and the credit policy
• Unexplained cancellations and re-appointments of dealerships
• The manager who quit or were sacked claimed the company to be farcical and the company was already planning to get rid of them
5
MAJOR CHANGES AFTER RESTRUCTURING
• Talent development
• Inculcate feeling of belongingness in employee
• Setting up hierarchy in a proper manner
• Standardized the discounting limits and best practices
• Launched a major IT initiative
STRENGTHS
The strength of Brand Position as the largest beverage company Incomparable promotions Sponsors of main events Wide distribution globally Improved packing and new products Customers loving coco cola(Brand loyalty) Large involvement in CSR activities
WEAKNESSES
Diminishing performance in markets Health issues regarding carbonation Some promotions presenting negative image Less diversification-Only in FMCG
OPPORTUNITIES
Drinking water issues- high demand for bottled water
Rise of beverage as style quotient Ability to promote anything along with. Potential expansion to many third-tier
countries Mergers and acquisitions
THREATS
Strong competition ( from Pepsi) People becoming more health conscious Different countries having different
regulations Demand and trends changing frequently Inflation, economic slowdown and instability
S W O T
INTRODUCTION TO THE PROBLEM
• Family oriented work culture
• Higher net working capital
• Low return on Net worth
• Low operating profit margins.
RESTRUCTURING PLAN
Burman’s tacking back seat and appointing a CEO to run Dabur
To concentrate on few businesses
To improve the supply chain and procurement process
To reorganize the appraisal and compensation systems
SOLUTIONS
Outside professionals were appointed
Annual Sales conferences and cash incentives to Junior level sales officers
Performance Appraisals and compensation planning was based on KPAs
BUSINESS UNIT HEADS• Health Care• Personal Care• Ayurvedic Specialities• Ayurvedic Veterinary• Pharmaceuticals• Oncology• Foods
FUNCTION HEADS• Operations• Supply Chain• Purchase• IT• HR• Packaging Development• R & D• Quality Assurance• Finance & Accounts• Corporate Communications
AFTER RESTRUCTURING
CEO
Management Committee
Board of Directors
AFTER EFFECTS
• Overall ‘feel good’ sentiment
• Increased Employee efficiency and morale
• Increased sales from Rs. 9.14bn in 1998-99 to Rs. 10.37bn in 1999-00
• Increased profits by 53%
STRENGTHS
Strong brand Performance Appraisals and
compensation planning was based on KPAs(Key Performance Areas)
Cash incentives to Junior level sales officers
Improved morale of employees
WEAKNESSES
Price to Earnings(P/E) Ratio was less prior to restructuring
Low return on Net worth Inefficient organization
OPPORTUNITIES
More competitive environment can be created
Expansion (merger and acquisition)
THREATS
Increasing competition Increasing bargaining power
S W O T
THANK YOU!