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Coca Cola Global Strategy
International Presence
The Coca-Cola Company, a renowned multinational firm, operates in all continents. The firm sells non-alcoholic beverages in more than 200 nations around the globe (The Coca-Cola Company). By 2019, the company was selling over 500 brands of beverages in the global market (Rad, 12). In 2015, the carbonated drinks sold by the firm had around 42.5 percent share in the global market (Rad, 15). As such, it is the leader in the global market in the production and sale of non-alcoholic syrups and drinks. Although Coca-Cola operates in the global market, its presence in some markets is more significant than in others. For instance, the company’s greatest market share is in North America, where it derived around 31.9% of its revenue in 2019 (Rad, 12). However, the share of unit sales volumes was greatest in Latin America in 2019 (around 27% of total sales), which is also one of the firm’s major markets. Asia also a major market for Coca-Cola, with unit sales volume in the region amounting to around 24% of total sales in 2019 (Rad, 15). The countries in which the company has the greatest market shares include the US, China, Mexico, Japan, Brazil and India (Rad, 15). Despite this, the company has significant market shares in Europe and Africa.
Entry into Significant Markets
Coca-Cola was initially established in the US, Georgia. After successful establishment in the local market, the company started entering the foreign markets (Banutu-Gomez 158). The firm has used varying strategies in the past to enter foreign markets. In India, Coca-Cola initially entered the market through the establishment of a wholly-owned manufacturing plant in 1947 (Banutu-Gomez 158). However, the company ended its operations in the country in the 1970s due to civil unrest, among other issues. The company re-entered the Indian market again in 1993 through the acquisition of local manufacturers of non-alcoholic beverages that were established during its absence. Similarly, Coca-Cola entered the Chinese market initially through the establishment of a wholly-owned production plant in1923 (Banutu-Gomez 160). However, the company ceased to operate in the Chinese market after a take-over by the government in 1949. Despite this, the company re-entered the market again in 1979. Unlike in India, Coca-Cola’s initial re-entry strategy entailed shipping its already manufactured products into the country and to franchises (Banutu-Gomez 160). Later, however, Coca-Cola increased its presence in the Chinese market through the establishment of joint ventures with local state-owned firms in China. In the Brazilian market, franchising was the only initial strategy that Coca-Cola used during the initial entry efforts in 1934 (Haugland 95). However, the company established bottling plants or subsidiaries in the country afterward.
Approach to Internationalization
Based on the integration- responsiveness framework, a firm’s internationalization strategy can be understood by determining its levels of global integration and local responsiveness. Global integration entails the extent to which a multinational firm’s strategies, products and other aspects are similar across countries (Veale 75). Conversely, local responsiveness is the extent to which a multinational firm modifies products, strategies and other aspects in response to the unique needs or nature of the local markets. In its internationalization strategy, Coca-Cola adopts a transnational strategy, which involves high levels of both global integration and local responsiveness. The high level of global integration is mainly expressed by Coca-Cola’s use of the same input, “coke,” to make products such as Sprite, Coca-Cola, Fanta and Died Coca-Cola t are sold in all regions where it operates (Veale 75). At the same time, the company makes some modifications to fit local needs. In addition to the main brands, the company makes additional products meant for specific markets or countries. Examples of the products that are unique for specific markets are Abbey Well (United Kingdom), Toluca (Mexico), Ades (Indonesia) and Cal King (Japan) (Rad, 15). Also, the company uses local languages on the packaging of products.
Works Cited
Banutu-Gomez, M.B. (2012). “COCA-COLA: International Business Strategy for
Globalization.” Business and Management Review, Vol. 3, No. 1. 155-169.
The Coca-Cola Company. Who We are. 2020. [https://www.coca
colacompany.com/careers/who-we-are] Accessed 20hat November, 2020
Haugland, Sven A. “The integration-responsiveness framework and subsidiary management: A
commentary.” Journal of Business Research, Vol. 63, No. 1, (2010): 94-96.
Rad, Završni. Coca-Cola Internationalization Strategies. 2020. [https://zir.nsk.hr/islandora/object/efzg:5858] Accessed 20 November, 2020
Veale, David, Lynn Oliver and Kees Van Langen. “Three Coca-Cola perspectives on international management styles.” Academy of Management Journal Vol. 9 Issue 3, (2015): 74-77.