The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Coca-Cola has a total of six business segments, with four of these geographic divisions and the remainder business-type units for the company’s acquired brands and bottling operations. In 2021, the company introduced 9 new business units to eliminate the duplication of resources and introduce new products more quickly.
Product-based divisions help Coca-Cola manage a portfolio of approximately 200 brands, while there are also various functional groups to support business operations in multiple departments.
Department
Type of Structure
Structure Details
Advantages
Drawbacks
Global Business Units
Geographic Structure
– Coca-Cola is organized into global business units (GBUs) that oversee specific geographic regions, including North America, Latin America, Europe, Africa, Asia-Pacific, and Global Ventures. Each GBU has its own leadership and adapts strategies to regional market needs.
– Tailored approach to regional markets. Quick response to market demands. Local market insights.
Coordination challenges between GBUs. Potential duplication of efforts.
Functional Departments
Functional Structure
– Various functional departments like marketing, finance, supply chain, and HR. These departments provide specialized expertise in their respective areas and support global operations.
– Efficient use of functional expertise. Streamlined processes within departments.
Potential communication challenges. Decision-making delays.
Coca-Cola Bottlers
Network Structure
– Coca-Cola’s products are primarily distributed through independent bottling partners worldwide. The company’s core organization focuses on coordination, marketing, and brand management, while bottlers handle production and distribution.
– Cost-effective distribution model. Focus on core competencies like branding and marketing.
Potential challenges in aligning strategies with independent bottlers. Limited control over production and distribution.
Corporate Functions
Functional Structure
– Corporate functions like finance, legal, IT, and sustainability. These functions provide centralized support and services to the entire organization. Operate independently from GBUs and bottlers.
– Efficient resource allocation. Consistency in global operations. Standardized processes.
Potential disconnect from GBUs and bottlers. Limited specialization.
Strategic Business Units
Hybrid Structure
– Coca-Cola has various strategic business units (SBUs) responsible for specific product categories, such as sparkling beverages, juices, and dairy. SBUs combine product-focused teams with functional expertise.
– Specialized product focus and innovation. Expertise in specific product categories.
Potential conflicts between SBUs and functional departments. Complexity in balancing product and functional roles.
Ventures and Investments
Hybrid Structure
– Ventures and Investments division explores new opportunities, investments, and partnerships to drive innovation and growth. It combines innovation-focused teams with financial and strategic experts.
– Pursuit of new growth avenues and innovations. Synergy between innovation and financial expertise.
Complexity in aligning innovation with traditional operations. Potential risk associated with new ventures.
The Coca-Cola Company was founded in 1892 by Asa Griggs Candler who purchased a beverage brand and recipe from pharmacist John Stith Pemberton. After three short years, Coca-Cola was available in every state in the union.
Today, the Coca-Cola brand is one of the most valuable in the world and is available in all but two of the world’s 195 countries. To manage its vast global operations, the company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Interested in learning more about how this gigantic company is structured? Let’s delve into the details below.
Geographic divisions
The Coca-Cola Company is structured according to four geographic divisions not unlike other companies with similar reach.
These divisions, which the company calls segments, are:
Europe, Middle East & Africa (EMEA).
Latin America.
North America, and
Asia Pacific.
Business-type units
The company also has two non-geographic divisions which it also calls segments:
Global Ventures (GV) – this was a unit that was created after Coca-Cola acquired coffee chain Costa Ltd in 2019. Today, the Global Ventures unit houses any other brand, acquisition, or investment the company feels it can scale globally. This includes energy drinks, juices, smoothies, and tea.
Bottling Investments Group (BIG) – incorporating all company-owned bottling operations. At present, these facilities are located in parts of Africa, Bangladesh, India, Malaysia, Nepal, Oman, Philippines, Singapore, Sri Lanka, and Vietnam.
Effective January 1, 2021, the company also introduced nine new business units to eliminate the duplication of resources and allow new products to be introduced more quickly.
Business units are also based on geography and include:
North America.
Latin America.
Europe.
Africa.
Eurasia and Middle East.
Japan and South Korea.
Greater China.
ASEAN and South Pacific.
India and Southwest Asia.
Operational leaders of all geographic divisions and business-type units report to current President and COO Brian Smith.
Each category is led by a President who works across a networked organization to build Coca-Cola’s brand. Each also reports directly to the Chief Marketing Officer.
Function-based groups
Coca-Cola has a number of specialized function-based groups where the organization itself is divided according to shared employee skill sets and experience.
Functional groups include:
Marketing.
General Counsel.
Security.
Investor Relations.
Global Community Affairs.
Global Finance Operations.
Mergers & Acquisitions.
Services Operations.
Global Flavor Supply.
Communications, Sustainability, and Strategic Partnerships.
Technical and Innovation.
Accounting.
Corporate Development.
Securities and Capital Markets.
Comparison with Top Related Companies
PepsiCo: PepsiCo uses a mixed organizational structure, incorporating elements of both functional and divisional systems. It organizes its divisions based on both geography and products (e.g., Frito-Lay North America, PepsiCo Beverages North America, and Latin America). This structure allows PepsiCo to manage a diverse portfolio of products more efficiently than a strictly geographic or product-based structure.
Nestlé: As a global food and beverage company, Nestlé employs a matrix organizational structure. This structure is complex, combining geographic divisions with global product divisions (e.g., Waters, Nutrition, Milk products). Nestlé’s approach provides a balance of localized adaptation and global integration, which is crucial for managing its extensive range of products.
Dr Pepper Snapple Group: Before its acquisition by Keurig Green Mountain, Dr Pepper Snapple primarily used a functional organizational structure, with a focus on North America. This structure was simpler and more centralized, focusing on product lines rather than geographic divisions, which differs significantly from Coca-Cola’s emphasis on global geographic segmentation.
Similarities and Differences
Similarities: All these companies use elements of divisional structuring, either by geography or product or both, to effectively manage operations across diverse markets and extensive product lines.
Differences: Coca-Cola’s focus is more on geographic divisions, allowing it to tailor its strategies to regional markets. In contrast, PepsiCo and Nestlé use a mix of geographic and product-based divisions, providing them with the flexibility to focus simultaneously on product innovation and regional needs. Dr Pepper’s structure was more centralized, which can enhance efficiency but may limit market responsiveness.
Implications
Market Adaptation: Coca-Cola’s geographic divisional structure enables strong local presence and quick adaptation to changing local consumer preferences, which is vital for the beverage industry.
Innovation and Product Development: PepsiCo and Nestlé’s mixed structures facilitate both regional tailoring and global product innovation, potentially offering a broader innovation landscape compared to Coca-Cola’s primarily geographic focus.
Operational Efficiency and Control: Coca-Cola’s structure, while beneficial for local adaptation, might face challenges in global strategic alignment and operational efficiency compared to more centralized structures like that of Dr Pepper Snapple.
Key Highlights:
Matrix Organizational Structure: The Coca-Cola Company employs a matrix organizational structure that encompasses geographic divisions, product divisions, business-type units, and functional groups.
Geographic Divisions: Coca-Cola is divided into four geographic segments: Europe, Middle East & Africa (EMEA), Latin America, North America, and Asia Pacific.
Business-Type Units: Two non-geographic segments are Global Ventures (GV) for brand acquisitions and investments and Bottling Investments Group (BIG) for company-owned bottling operations.
New Business Units: Introduced in 2021, nine new business units were established to eliminate resource duplication and expedite the introduction of new products. These units are also based on geography.
Product-Based Divisions: Coca-Cola manages its extensive portfolio of around 200 brands through product-based categories such as Coca-Cola, Sparkling Flavors, Hydration, Sports, Coffee and Tea, Nutrition, Juice, Dairy, and Plant, and Emerging.
Function-Based Groups: Various functional groups are organized based on shared employee skill sets and experience. These groups include Marketing, General Counsel, Security, Investor Relations, Global Community Affairs, and more.
Operational Reporting: Operational leaders of geographic divisions, business-type units, and product-based categories report to the President and COO.
Marketing Leadership: Each product-based category is led by a President who reports directly to the Chief Marketing Officer, facilitating a networked approach to building the Coca-Cola brand.
Diverse Brand Portfolio: Coca-Cola’s complex structure helps manage the vast diversity of its product offerings, from traditional beverages to emerging trends.
Global Presence: The matrix structure allows Coca-Cola to manage its operations across the globe, catering to various regional preferences and market demands.
Coca-Cola follows a business strategy (implemented since 2006) where through its operating arm – the Bottling Investment Group – it invests initially in bottling partners operations. As they take off, Coca-Cola divests its equity stakes, and it establishes a franchising model, as long-term growth and distributionstrategy.
Coca-Cola’s top investors include Warren Buffet’s company, Berkshire Hathaway, with 9.25% of shares, and other mutual funds like The Vanguard Group, holding 8.51% of shares, and BlackRock owning over 7.19% of shares of the company. Other individual investors like Herbert A. Allen, director of The Coca-Cola Company since 1982, and Barry Diller, Chairman of the Coca-Cola board since 2002. And former CEO Muhtar Kent.
Coca-Cola generated $45.75 billion in revenue in 2023, compared to over $43 billion in revenue in 2022, and $10.7 billion in profits in 2023, compared to over $9.5 billion in net profits in 2022.
Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”
Coca-Cola is the market leader of the soft drink industry. It is also the most widely recognized brand, with a Business Insider study revealing that a staggering 94% of the world population recognizes the red and white logo. However, Coca-Cola faces significant challenges with increasingly health-conscious consumers and less access to water resources.
The Coca-Cola Company is an American multinational beverage corporation founded in 1892 by pharmacist Asa Griggs Candler. Many consumers associate the company with its signature soda in a red can or bottle. In truth, however, The Coca-Cola Company owns a plethora of soft drink, juice, tea, coffee, and other beverage brands.
The Coca-Cola Company has 21 different billion-dollar brands or brands that generate more than $1 billion or more in revenue each year. The company also sells its products in nearly every country in the world, with Cuba and North Korea the only two countries where it is not sold officially. What’s more, the Coca-Cola brand is worth $87.6 billion, making it one of the most valuable among all companies. Though these figures allow Coca-Cola to enjoy market dominance in many countries, the company is nevertheless subject to intense competition.
Pepsi is owned by PepsiCo, the holding company which owns many brands spanning from drinks to food & snacks and more. PepsiCo generated $91.47 billion in revenue in 2023, and $9.07 billion in profits for the same period. PepsiCo is primarily owned by institutional investors like The Vanguard Group (8.9%) and BlackRock (7.6%). Top individual investors comprise Robert Pohlad, the company’s board member; and the company’s CEO, Ramon Laguarta.
PepsiCo was founded in 1902 by American pharmacist and businessman Caleb Bradham as the Pepsi-Cola Company. Bradham, who hoped to emulate the success of Coca-Cola, marketed the beverage from his pharmacy and registered a patent for its recipe the following year. Today, Pepsi is a global company with a portfolio of 23 billion-dollar brands, or brands earning more than $1 billion in annual revenue. Sixteen of these brands are beverage-related, while the remaining seven are associated with snacks and other food products.
In 1965, PepsiCo acquired Frito-Lay in what the chairmen of both companies called a “marriage made in heaven”. The resultant company transformed PepsiCo from a soft drink organization and set it on a path to becoming one of the world’s leading food and beverage companies. Today, PepsiCo claims to operate in more than 200 countries and territories around the world with seven distinct divisions and many successful brands.
PepsiCo generated $91.47 billion in revenue in 2023, over $86 billion in revenue in 2022, over $79 billion in revenue in 2021, and over $70 billion in 2020.
PepsiCo generated $9.07 billion in profits in 2023, compared to nearly $9 billion in profits in 2022, over $7.6 billion in profits in 2021 and over $7 billion in 2020.
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The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
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Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
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Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
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Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
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Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
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Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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