International Business About the Cocacola Company Essay

1 . Provide a brief background of the company and the industry. Outline the reasons that drove the company to start expanding across national border. Soft drink is a part of carbonated beverage industry and typically contains water or carbonated water with adding sweetener, colorings, preservatives, a flavoring agent and other ingredients. Soft drinks can be like soda, coke, soda pop, fizzy drink, tonic, mineral, sparkling water, carbonated drink, and seltzer. Most of the soft drinks are non-alcoholic drinks, the alcoholic soft drinks must be contained less than 0. Percent alcohol of total volume. Some soft drinks contain caffeine. Soft drink industry was started in the late of ass century. It was found by an Englishman whose name is Joseph Priestley. He then sold his apparatus for commercial use to pharmacies and it has been expanded until now becoming a small part of beverage industry. The Coca-Cola Company is an American multinational beverage corporation, manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia.

The company’s best product which is the most popular is Coca-Cola which was invented in 1886 by a Georgia harmonist and it was bought in 1889 by As Candler who incorporated the company in 1892. This company has expanded its business in over 200 countries, offers more than 500 brands and 1. 7 billion servings each day. The earliest year, the company was focusing more in producing syrup concentrate and started to open franchised distribution in 1889. This company is listed its stocks in NYSE.

There are few reasons why Coca-Cola Company has expanded their business to other nations: 1. TO refresh the world with the products and bring the world closer by using their product. As the proof from the history that in 1950, Robert W. Woodruff, former Coca- Cola Company president and current chairman of the Executive Committee, stated the following in an interview: “We’re not selling the world short, we’re playing the world long. We decided that we would live with the world and that the world would survive, that it must survive, as a decent place to live in. L To sell short in the stock market is to bet against your investment, believing that it will fail or depreciate in value – representing a desire to make money quickly and walk away. Woodruff expressed Coca-Cola’s aspiration for long-term investment in the world based on his life that the world would benefit and that the Company would prosper. His high- minded tone suggested that Coca-Cola was powerful enough to assert its will around the world and would use that power for good. 2. Because at the time Coca-Cola was launched there was hardly any brand which was making a mark on the global stage.

Their main competitors Pepsi was not launched until 1956. The company saw this vacuum in the market as an opportunity to expand pass the national borders and make a mark in the work market. 3 Coca-Cola was very success in the United States, so the company decided to expand operations worldwide. Coca-Cola is the most recognizable trademark on the planet, which is known to 94% of the world population. The Coca-Cola Company invests a lot in not only the brand recognition, but also in quality of its products, sustainability and charity sponsorship.

Coca-Cola implied branding and cost leadership strategies in many of the countries it entered. As example: the most challenging country for western firms is China. The western companies need to revise their name in Chinese words so the Chinese can pronounce the words easily. The Coca-Cola needed to find four characters whose pronunciations approximated he sound of the brand without producing a nonsensical or adverse meaning when strung together as a written phrase. Since Coca-Cola entered the mainland China market, it used a revised name, which appealed more to the ideographic sense than the original English sound. . What are the key drivers of globalization today? What are the opportunities and threats arising from these key drivers to the company? Globalization is a trend towards a greater economy, culture, political, and technological interdependence among notional institutions and economies. Coca- Cola is one of the globalize company with its economy growth, cross culture all over he world and high technology is used to lower the labor cost. Key driver that involve in a globalization market are market driver, cost driver, technology driver, government driver and competitive driver.

Market driver are the primary driver of globalization which allows consumers to have free trade around the world. Market is the area of economic activity in which buyer and sellers come together and forces of supply and demand affect prices of producing goods for market rather than for consumption. Coca-Cola country can’t market globally without the market economy support of consumer. If there is no demand, the Coca-Cola Company can’t do its production in the beverage product market. However, cost driver is the secondary in globalization market. Which is defines as a factor of a production that can cause a change in the cost of an activity.

Coca-Cola Company produces access of lower cost of worker and access of production input to achieve the target of profit. Technology driver is also one of the important drivers in a globalization market that survives a firm or industry. This driver makes work easier, faster, and less costly to move data, goods, and equipment around the world. Coca-Cola industry does marketing product of product internationally using the e-mail system. Online conferencing is also one of the technologies used for the purpose of urgent meeting. To reduce the usage of petroleum Coca-Cola had introduce greener bottle.

After introducing this bottle it had improve the packaging system of Coca-Cola. Social networking and online advertising is also one of the technologies that helps the Coca-Cola industry go more globalize. Government is also one of the drivers of globalization market which supports infant firms that have the capacity to become globalize by giving financial purport like loan at a lower interest charged. Competitive is also one of the drivers of globalization which is the competition between two different companies competing same industry. Coca-Cola, Pepsi Co and Dry.

Pepper Snapped are in the same industry selling beverage manufacture but they are three different companies that compete. It is good opportunities for Coca-Cola to update according to Consumers nowadays preference of drinking soft drinks in a smaller packing that are not sold in mass amount weight. Other than that, there is also opportunity for the company to add or introduce more products like non-carbonated drinks that are more prefer by consumers. To increase the efficiency of a business Coca-Cola has the opportunity of showing their concern of consumer help by offering more hygienic product.

European and china country has rapid growth. It is good opportunity for Coca-Cola country to keep in track on the consumer’s preference and produce more new latest product. 3. Explain some of the company’s efforts to localize its offerings. What could have been done differently? Coca-Cola is a brand which is based on western culture that unconnected to Chinese market, it is seems like more difficult for its localization because there are huge differences between eastern and western culture. However, Coca-Cola finally found the way to cross cultural brand marketing in order to enter China market.

Coca-Cola localized their product in china by few ways. Firstly, logo of Coca-Cola is the most recognized and classic in the world. Their original bright red and white color scheme logo is the global unified visual identity of Coca-Cola. There are three core elements in the visual identity system of Coca-Cola which are broadly accepted by the customers all over the world. It is this unique name that is remembered by the people from all over the world. Red color is Coca-Cola selected standard color which is applied in the whole production from the logo till employee uniform to the product packaging.

All of these are the most valuable treasure and distinctive features of the Coca-Cola compared with other rivals. In Chinese, there is Chinese name for Coca-Cola which is “Eke Kook Eke El”. The combination of the former two characters mean can eat or good to eat. Then later two characters mean can be happy. So the Chinese name of Coca-Cola meaner delicious and happy. It is this name that is recognized as one of the most beautiful translation and brings luck and popularity to Coca-Cola. In china, red has special meanings to Chinese people.

It is a traditional popular festival color which reflects happiness, prosperity, luck, celebration and the spiritual and material pursuits of Chinese people. Whether it was a stroke of luck, the red of Coca-Cola brings Chinese people familiarity and joyousness. Coca-Cola Chinese logo design continues applying wax. Y ribbon patterns which express the brand value of the company: Infinite possibilities, dynamism and duality. Even though the Chinese characters are completely different from the English letters, both versions of the trademark today have a very similar and familiar appearance.

From visual unity, customers can feel the integration of western and Chinese cultures directly. Secondly, it is packaging. When Coca-Cola adopting a new packaging, it is a talking point for market and audience, not Just the product itself but packaging design is also the highlight to attract all eyes. There are three main aspects that Coca-Cola integrates Chinese culture with packaging, which makes nonusers identify its brand, feeling brand affinity without knowing. Coca-Cola’s localization on the packaging is reflected in following three aspects.

First are the stars that Chinese young people like. Secondly, it is about the Chinese traditional culture. Thirdly, it is significant events for Chinese people. Thirdly, it is advertising of Coca- Cola. It is important to understanding target audience is obviously significant for a brand. It’s necessarily for a brand to know the need that its target audience requires. Coca-Cola recognized that consumers in different regions have different cultural backgrounds and preferences. Especially in China, people desire for Auspicious, jollification and family psychologically.

Company is paying more attention to the psychological needs of consumers rather than spread American culture only. Coca- Cola advertisement in China changed its main popular character in local America “Santa Claus” into two children wearing Chinese costume and also Joined quite a lot of Chinese elements and focusing on the expression of the philosophy of family first and harmony. Over the years, Coca-Cola’s red is become very remarkable in the world. 4. What ethical issues (corruption, environment, employment practices, unman rights, financial fraud, etc. Have you witnessed or heard about on this company? State your opinions on what should have been done to deal with these ethical issues. Labor Practices in Colombia: Colombia is widely considered as one of the most dangerous countries in the world for trade union activists and union leaders. The country was in the midst of a four-decade-old civil war involving leftist guerrillas, right-wing paramilitary groups, and government forces. The civil war claimed approximately three thousand lives a year including those of many trade union leaders and workers.

It was reported hat in 2000, three out of every five trade unionists killed in the world were from Colombia. In 2001, SENATORIAL, a Colombian labor union, charged that Coca-Cola and its bottlers Pan-American Beverages (Panama), Abides y Aliment’s De Aruba, and Coca-Cola Femmes, were linked to the violence against its union members in Colombia. Around eight union leaders of Coca-Cola’s plants in Colombia had been murdered since 1989, and many others had been abducted and tortured.

Coca-Cola was accused of hiring paramilitary death squads to kidnap, torture, or kill union leaders and intimidate worker union activists at its bottling plants. Solution for this: Coca-Cola needs to move their factory to Mexico. Because trade practices in Mexico Mexico was a very important market for Coca-Cola as the country was second, after the US, in terms of per capita consumption of soft drinks in the world. The Mexican market for soft drinks was estimated at IIS$ 6. 6 billion for the year 2004. Over the years, some of the highest profit margins for Coca-Cola in its overseas operations came from Mexico.

Coca-Cola was the number one seller of soft drinks in Mexico with a 70% market share. Coca-Cola’s largest bottler in Mexico was Coca-Cola Femmes (CUFF) n which Coca-Cola had a 40% stake… Environment & Product Issues in India: In India, Coca-Cola was accused of draining the underground water table, of releasing improperly treated industrial effluents, and of selling products containing pesticide residues above standard limits. The focal point of the environmental accusations in India was the Coca-Cola plant located in Kraal.

Coca-Cola, through its subsidiary in India, The Hindustan Coca-Cola Beverages Pat. Ltd. , had established a bottling plant at Appalachia locality in Planked district in Gala Dear Solution for this: Stop Using Groundwater in Gala Dear The assessment made four recommendations with regard to the Coca-Cola bottling plant in Gala Dear, making it clear that Coca-Cola could no longer utilize the overexploited groundwater resource in Gala Dear: 1. Transport water from the nearest aquifer that may not be stressed 2. Store water from low-stress seasons 3.

Relocate the plant to a water-surplus area 4. Shut down this facility 5. What do you think of the company’s future prospects? What new directions are needed to position the company to meet its future challenges? Future Prospects Coca Cola has done a good Job with the company future prospects. No doubt, Coca Cola is one of the greatest companies that have ever existed. They are also the most recognizable brand name in the world by intense marketing and advertising. However, they still face some challenges ahead as they move towards the future.

Decrease in Carbonated Soft Drink Consumers One of Coca cola challenge is the decline in carbonated soft drinks (SD) of the consumers. “The current set of teens may become the “lost generation” for the SD category. Our latest survey of 1 ,550 consumers aged 13-65 supports our view that the US SD segment is likely to remain under pressure. We maintain a forecast for a 1. Percent annual volume decline for the SD segment” (Beverage World 2007). Health Issue Next, challenge is to tackle the health issue in most of Coca cola products.

Nowadays people tend to be more health cautious and prefer organics and more “natural” beverage to lower the consumption of negative chemicals. New Direction: Focus on other Family Brands The solution is to have Coca cola focus on other family brands and bring it to the level of achievement that is accomplish by the famous coke without damaging its branding. By focusing on other 160 existing products in its highly individualized rand, they are able to have new and stable profits and able to try new products with less risk to its reputation if the product fail.

This way Coca cola will not only be known for SD but will be known for all beverages. Example: “Far Coast”, coffee and tea brand in Canada which is under Coca cola family brand. By improving focusing on “Far Coast” to achieve great heights, Coca cola can be the main supplier for SD and Coffee and Tea. It will also solve the health issues by producing tea, coffee and other organic beverages like soy or orange Juice. These products have less negative chemicals and more natural to consume. They must only employ these steps, after a careful research on the target market.

Nowadays, environmental change is rapid. Coca-Cola should be sensitive of any new trend and position itself as a unique brand in order to keep its competitive advantage. Green Packaging Next is to focus on making a greener product which will give Coca cola a unique selling point compare to others. Coca cola could change all of the packaging with a more bio degradable material and reduce the amount of plastics by imprinting the logo on the bottles itself instead of manufacturing the extra plastic wrapping labels n bottles.

That way, Coca cola would be able to sell itself as an environmental trendily product. 6. What does the company’s success experience tell you about the nature of true global businesses (globalize its markets; globalize its production; cultural literate, etc. )? Globalize in Market As the expansion of the new product’s brand, the new form of marketing is emerging. Customer’s standard of demands to the products and service also increase to higher levels. However, Coca-Cola Company’s success in globalize its market by understand how their brand is meeting the needs of customers.

Coca-Cola remains committed to paying attention to consumers’ changing needs as well as cultural diversity in what people like to drink and how they drink it. Coca-Cola view the brand is company’s most valuable asset to attract buyers and retain them. Understanding how own brand creates value is the key to maintaining market leadership or establishing it in the first place. Strategies pricing is also Coca-Cola success in globalize its market by sell to mass market from the start as volumes generate higher returns than it used to and attempts to understand the price sensitivities of customers.

Furthermore, second step of strategies price is specify a level within the price corridor. Many competitor tried to imitate others companies products/services and by this it’s important to determines how high the firm can afford to set the price within the price corridor, without increasing competition from imitation products and services. Globalize in Production Coca-Cola company’s success in globalize its production with streamlining operations cost by switching to less expensive raw materials. High cost low level added activities in your value chain should be eliminated as it will only generate loss n sales.

This is because customers prefer low price but high quality products. By this can potentially lowering prices and providing more choices for consumers. Second method of success is partnering. Why partnership is overlooked because companies make the mistake of trying to carry out all activities of production and distribution on their own, because they identified the product as their platform for other products and services. This method can provides a way for companies to secure needed capabilities fast and effectively while dropping the cost structure.

Coca-Cola can closes the gaps in capabilities through small acquisitions when doing so is faster and cheaper. Furthermore, it can provide company access to needed expertise that has been mastered by other organizations. The benefit of partnering can establish partnerships with several manufacturers to find the cheapest materials and production activities. Cultural literate In 1886, The Coca-Cola made by John Pembroke at first only sold nine glasses, but now the Coca-Cola Company can sell so many every day. The company built a core asset, which its culture literate.

The perfection organization culture is the important part of the Coca-Cola Company success. The Coca-Cola Company has a nice culture which its asset is people. The company believes that work in the Coca- Cola is more than a place that people go every day. It should be a place of exploration, innovation, development and interpersonal relationships. All people’s talents, skills, knowledge, experience combined together that make the company who they are. As a result, the Coca-Cola Company culture is more and more merging. The company opens tort the employees to snaring ideas across departments and markets in new ways.