Harvard Case - Project Last Mile in Tanzania: Learning from Coca-Cola's Supply Chain
"Project Last Mile in Tanzania: Learning from Coca-Cola's Supply Chain" Harvard business case study is written by William E Youngdahl. It deals with the challenges in the field of International Business. The case study is 7 page(s) long and it was first published on : Jan 1, 2017
At Fern Fort University, we recommend that Coca-Cola Tanzania implement a comprehensive strategy to address the challenges of the 'last mile' distribution in Tanzania, leveraging its existing strengths and adapting to the unique market conditions. This strategy should focus on building a robust and sustainable distribution network, fostering local partnerships, and embracing innovative solutions to overcome logistical hurdles and reach the vast majority of Tanzanian consumers.
2. Background
This case study explores Coca-Cola's challenges in reaching consumers in rural Tanzania, a key market for the company's growth in Africa. The case highlights the complexities of the 'last mile' distribution, characterized by poor infrastructure, limited access to transportation, and a dispersed population. Coca-Cola's existing distribution network, heavily reliant on trucks, struggles to reach remote areas, resulting in missed sales opportunities and customer dissatisfaction.
The main protagonists of the case are Coca-Cola Tanzania, its management team, and the local distributors and retailers who play a crucial role in the company's distribution network. The case also explores the challenges faced by the Tanzanian government in developing its infrastructure and supporting the growth of local businesses.
3. Analysis of the Case Study
We can analyze the case study through the lens of Supply Chain Management and International Business frameworks:
Supply Chain Management:
- Distribution Network: Coca-Cola's existing network is inefficient and expensive due to reliance on trucks for long distances. This leads to high transportation costs, product spoilage, and limited reach.
- Last Mile Challenges: Poor infrastructure, limited access to transportation, and a dispersed population in rural Tanzania pose significant challenges for efficient distribution.
- Local Partnerships: Coca-Cola needs to build stronger relationships with local distributors and retailers to leverage their knowledge of the market and improve access to remote areas.
- Innovation: Exploring alternative distribution channels, such as mobile vending, bicycles, and community-based distribution models, can improve reach and reduce costs.
International Business:
- Emerging Markets: Tanzania represents a significant growth opportunity for Coca-Cola, but the company must adapt its strategies to the unique challenges of emerging markets.
- Globalization: Coca-Cola's success in Tanzania depends on its ability to integrate its operations with local realities and navigate the complexities of international business.
- Cross-Cultural Management: Understanding the cultural nuances of the Tanzanian market is essential for effective marketing, communication, and building relationships with local partners.
- Government Relations: Coca-Cola needs to engage with the Tanzanian government to advocate for infrastructure development and favorable business policies.
4. Recommendations
Short-Term:
- Pilot Innovative Distribution Models: Coca-Cola should pilot innovative distribution models like mobile vending, bicycle delivery, and community-based distribution in selected rural areas. This will allow the company to assess their effectiveness and scalability.
- Strengthen Local Partnerships: Coca-Cola should invest in training, capacity building, and financial support for local distributors and retailers. This will improve their efficiency, expand their reach, and foster a stronger sense of partnership.
- Leverage Technology: Implement technology solutions like GPS tracking, route optimization, and mobile payment systems to improve distribution efficiency and transparency.
Long-Term:
- Develop a Multi-Modal Distribution Network: Coca-Cola should invest in a multi-modal distribution network that combines trucks, rail, and waterways to reduce transportation costs and increase reach.
- Advocate for Infrastructure Development: Coca-Cola should actively engage with the Tanzanian government to advocate for investments in road infrastructure, transportation networks, and rural development.
- Embrace Sustainability: Implement sustainable practices throughout the supply chain, reducing environmental impact and fostering local economic development.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies: Coca-Cola's core competencies in brand management, marketing, and supply chain management can be leveraged to address the challenges in Tanzania.
- External Customers: The recommendations focus on reaching a wider customer base, improving customer satisfaction, and building brand loyalty in Tanzania.
- Internal Clients: The recommendations aim to improve the efficiency and effectiveness of Coca-Cola's internal operations by streamlining distribution processes and fostering collaboration with local partners.
- Competitors: The recommendations aim to strengthen Coca-Cola's competitive position in Tanzania by expanding its reach, reducing costs, and improving customer service.
- Attractiveness: The recommendations are expected to generate positive financial returns by increasing sales, reducing costs, and improving market share.
6. Conclusion
By implementing these recommendations, Coca-Cola can overcome the challenges of the 'last mile' distribution in Tanzania and achieve sustainable growth in this key market. The company needs to embrace a multi-pronged approach, combining innovation, local partnerships, and government engagement to build a robust and efficient distribution network that reaches every corner of Tanzania.
7. Discussion
Alternatives:
- Focusing solely on urban areas: This would be a less ambitious approach, but it would limit Coca-Cola's market potential and miss out on the significant growth opportunities in rural Tanzania.
- Acquiring existing distribution networks: This could provide immediate access to a wider customer base, but it may be expensive and require significant integration efforts.
Risks:
- Political instability: Political instability in Tanzania could disrupt business operations and hinder investment.
- Economic downturn: An economic downturn in Tanzania could reduce consumer spending and impact Coca-Cola's sales.
- Competition: Competition from other beverage companies could erode Coca-Cola's market share.
Key Assumptions:
- The Tanzanian government will continue to support economic development and infrastructure projects.
- Local distributors and retailers will be receptive to collaboration and capacity building initiatives.
- Consumers in rural Tanzania will be willing to pay a premium for Coca-Cola products.
8. Next Steps
- Phase 1 (6 months): Pilot innovative distribution models in selected rural areas.
- Phase 2 (12 months): Develop a multi-modal distribution network and strengthen local partnerships.
- Phase 3 (24 months): Advocate for infrastructure development and implement sustainable practices throughout the supply chain.
By following these steps, Coca-Cola can achieve its strategic goals in Tanzania, expand its market reach, and contribute to the economic development of the country.
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Case Description
Discussion between Coca-Cola, The Global Fund to Fight AIDS, Tuberculosis and Malaria and The Bill and Melinda Gates Foundation focused on how Coca-Cola's supply chain knowledge could be harnessed to improve the distribution of essential medicines and health supplies in Africa. This led to Project Last Mile, a pilot project that aimed to deliver sustainable improvement in distribution of essential medicines and health supplies in Tanzania.
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