For an organisation of which you are part, or one which with you are familiar, or one sourced from the Internet, you are asked to examine the introduction of a project portfolio management function in order to improve the organisation’s strategic advantage, project success and achieve its sustainability goals. Prior to developing the plan for the introduction of the project portfolio management function, you are asked by Executive Management to consider the way the organisation currently manages its project portfolio and then address the following requirements:
Situational Context and Evaluation
- How the organisation is likely to view the introduction of portfolio management given its size and project needs?
- How the organisation currently manages its projects and is there scope for improvement?
- How the organisation incorporates sustainability criteria into its business decision-making process and its operations, including social equity, economic efficiency and environmental performance? Is there scope for improvement and how might this be achieved?
Opportunities and Threats
- The likely successes that the organisation might experience by introducing a project portfolio management process.
- The likely challenges the organisation might face with the adoption of the project portfolio management process and how would these challenges be overcome?
Development of the Plan
- What would be the key elements of a plan to introduce project portfolio management into the organisation and how would it impact the strategic goals?
- What type of project portfolio management model would you propose for the organisation and why?
- How would you plan to implement project portfolio management into the organisation?
Tools and Techniques
- What tools/techniques are available for managing different types of project portfolios and which ones would you propose for the organisation and why?
Situational Context and Evaluation
Project portfolio management helps organizations both large and small to break down its project’s resources, its budgets, and targets into manageable elements. This paper will look at the strategies, processes, and deployment of an efficient and easily adaptable project management portfolio in Coca-Cola Company. Portfolio management helps in improving the multi-level projects of Coca-Cola Company, and it takes into account the projects which deserve to be given priority in the company (Cooper, Edgett, & Kleinschmidt, 2008).
Coca-Cola is a large corporation operating worldwide. It works for global businesses on a local scale. It has a complex system single since it’s not a single business entity, and the company is not in control off all its bottling partners hence it is a bit complex. The system operates through many multi -national channels. Coca-Cola manufactures and distributes several brands of beverages and distributes them with the help of the Coca-cola enterprises (Rajegopal, McGuin, & Waller, 2007). The company manufactures and introduces new products of different package sizes of products which are in line with their strategies. The company continuously looks for undeveloped markets in the world of juices and soft drinks. To achieve this, the company intends to invest $5billion by partnering with its African partners by 2020. This will raise the company’s investment to 17% from 2010 through to 2020.
Currently, coca-cola being a global company has a high standard and processes from the production of its concentrates through the bottling process until the product delivery to their consumers that ensures sustainable quality across their entire value chain. Coca-Cola highly values its customers hence strive to offer them high quality, refreshing and safe products. They achieve this by following of stringent ingredients and products to enable the company to provide quality, and safety of their products (Rajegopal, McGuin, & Waller, 2007).
When it comes to the introduction of a new business element regardless of its impact, it faces opposition system before its inception. Coca-cola has a strategic approach to its projects activities that enables it to achieve its project plans and have competitive advantages over its competitors. To a have a consistent, safe products and highly quality products the company has set aside strong governance practices that regulate its processes. The company diligently complies with the set regulations, and is always updated on new regulations(F. L. Harrison, 2004).
The company has a project management portfolio known as KORE. This function manages the company’s manufacturing, and distribution policies, process requirements, and specifications. The company has a quality management program which helps the company manage its risks and propel product improvements.
Opportunities and Threats
In incorporating sustainability into its business, Coca-cola engages all its stakeholder groups in decision making especially ones which have long term impacts on the company. This is done through formal and informal meetings with the national, local, and regional stakeholders in discussions with their suppliers, distributors, bottlers and consumers of their products. By involving these parties, the company can manage its internal and external environment (Sanwal, 2007). The company takes part in international multi-stakeholders initiatives. This assists the company in overcoming global challenges. These approaches also help the company in retaining sustainability and attaining positive impacts on its environmental, economic, social aspects.
Introducing a project portfolio for coca cola faces both opportunities and challenges. One of the drivers of success in coca cola is the use of its competitor’s weakness, its main competitor being Pepsi. Coca-cola has a high opportunity as it has a strategy that engages its stakeholders in long-term dialogue. This means that the stakeholders will give their views on the proposed project hence minimizing chances of rejection. In introducing a project portfolio, the company should lay much focus on its target markets; assess the required resources, the anticipated resources, as well as the company’s level of risk tolerance. Coca-Cola should use appropriate strategies combined with its opportunities to maximize its competitive advantages. It also utilizes the portfolios and come up with joint ventures (Kester, Graffin, Hultink, & K.Lauche, 2011).
The success of the portfolio will be significantly supported and strengthened by the availability of resources. Coca-cola as well has a strong marketing capability, strategic global business location and the advantage of its great diversification strategy (Kester, Graffin, Hultink, & K.Lauche, 2011).
On the other hand, the project portfolio is faced with challenges. They include the managers’ fear of the unknown since they don’t know what to expect from these new projects. Some employees might be resistant to change, and the management cannot force them to embrace change. This makes the project portfolio implementation hard. Every change comes along with additional costs, the company might not be willing to incur the costs, or they may have an inadequate budget for the program(Phillips, 2003). The staff of Coca-cola is diverse, and some might have an improper understanding of the dynamicity of the portfolio management. Also faces the challenges of too many projects running at the same time hence failure due to lack of focus, project failure due to lack of support from the management.
Development of the Plan
To overcome these challenges coca cola should come up with a capability identification strategy that will enable them forecast if the project will be profitable or not. The organization should also budget allocation on anticipated projects which follows the order of priority for each project (Blanding, 2010). The management should set up open discussions with the employees who resist change. This will help the management establish the reasons besides their resistances. A strategy cannot succeed without the support by the management hence to overcome every challenge the management needs to approve and support the portfolios(Cattani, 2011).
Companies should recognize the differences in its assets; distribution of property helps in optimization of the risks and improves the investors' returns through mixed asset investing. The type of assets investors have affects the kind of possible investment.
Due to the unpredictable nature of portfolios and investments it is not possible to determine which project will be successful and which will fail. Companies should, therefore, diversify and invest in multiple assets diversification helps in spreading of risks as well as rewards. Diversification impacts on the economic, securities and geographical regions.
This helps in returning portfolio to the original targeted annual interval allocations. Rebalancing deals with disposing of high and low securities, hence taking back the assets to their initial capacity over time. It helps investors to monitor their gains annually keeping it aligned with the investor’s risks and return profile.
- Aggressive portfolio involves high risk and high returns.
- Income portfolios lay focus on making profits and yielding good cash flows.
- Defensive portfolios isolate themselves from large markets. For them, they give returns regardless of the nature of the economic times.
- The speculative portfolio is more of gambling and has the highest risks. They are based on rumors or an unconfirmed and hybrid, which incorporates other business investments. It increases the returns through diversification.
For the case of Coca-cola, I would recommend them to use the defensive portfolios which will enable them to survive tough economic times especially due to their existence in the global markets where various changes exist (Foster, 2008).
Implementation of a project portfolio mainly takes eight steps. Coca-cola can as well put these steps into consideration in implementing their project portfolios. To start with, the company should embrace the principles involved with the portfolio, and choose portfolio that suits their company. It should be precise and settle on a particular approach based on the status of the company. Securing executive support by making sure all executive representatives of Coca-cola worldwide approves the approach. After receiving executive support, the next initiative is on governance. After which coca cola comes up with a value chain measurement frameworks which in the long run will determine the value of the overall portfolio. After all has been done, it’s now time to implement the plan, and all proposed processes and inherent capabilities should be put in place as well (Foster, 2008).
Tools and techniques; there exist quite a number of tools useful to follow. These include; mathematical programs which are based on the mathematical logarithms. It targets on portfolio optimization and helps in making investment decisions. 2D and 3D which deals with graphical representations, in either a three or two matrix forms. It helps in analysis of business unit. The projects and activities are appropriate for any company since they are easily implemented (Oliver, 1996).
Project portfolio is important as it helps the organizations in establishing environments which create platforms for open discussions for coca cola and its stakeholders worldwide. This allows for debate before the actual project implementation hence creating a uniform business environment with all stakeholders working towards the same direction. Portfolio management leads to proper utilization of organization’s resources. The efficiency and positivity use are achieved since the organization has an effective strategy towards organization’s progressive. The company should identify the challenges facing the implementation and introduction, to help them come up with solutions to these problems.
Blanding, M. (2010). The coke machine: Dirty truth behide the worlds favorite soft drink. New York: Avery.
Cattani, G. F. (2011). Project-Based Organizing and Strategic Management, Advances in Strategic Managemennt. Emmerald: ISBN 1780521936.
Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (2008). Portfolio Management for New Products. Adison : ISBN 0-20132814-3.
L. Harrison, D. L. (2004). Advanced Project management: a structured approach. .Oxford: Gower Publishing, Ltd.,.
Foster, R. (2008). Coca-cola Globalisation: Followinh Soft Drinks from New York to Guinea. New York: Palgrave; Macmillan.
Kester, L., Graffin, A., Hultink, E., & K.Lauche. (2011). Exploring portfolio decision making processes. Journal of Production Management , 28.
Oliver, T. (1996). The Real Coke, The Real Story. New York: Random House.
Phillips, J. (2003). PMP Project Management Professional Study Guide. New York: McGraw-Hill .
Rajegopal, S., McGuin, P., & Waller, J. (2007). Project portfolio Management :Leading the corporate vision. Basingstoke: Macmilan.
Sanwal, A. (2007). Optimising Corporate Portfolio Management: Aligning Investments Proposals with Organisational Strategy. Wiley: ISBN 978-0-470-12688-2.
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