Coca-Cola Company: History, Strategy, And Partnerships

History of Coca-Cola Company

Write an essay on Coca- Cola Company .

Coca- Cola Company laid its foundation in 1886 and now is the leading manufacturer and distributor of the world. It is now currently operating in more than 200 countries having brands of more than 230 in number. Around 80% of the company’s profit is from the United States. The Chairman of Coca Cola Company revealed that the main strength of the company is being global and it has achieved so by acting locally (Coca-cola.co.uk 2016). The company effectiveness and profit level is due to their strong market share and competitive rank in the world. Initially the company was just geographically located in US but with time, it soon spread to the other countries by adopting the market development strategy. In addition, Coca Cola has separated its geographical units where each unit has an organizational and operational section (Coca-cola.co.uk 2016). They have focused on the key elements of the markets, reporting lines and the flexibility so that the business gets adapted to such geographical features.

Company Name	% value
Coca Cola Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	47
Cadbury Schweppes	8
Pepsi Cola	21
AmBev	1
Cott	2
Others	21
Total	100

Table 1: Global market share

Source: (Smith 2016)

The Coca Cola Company has its headquarters in the midtown of Atlanta, Georgia. A home country is important for any organization because it helps in building up that organization. The norm of the home country’s culture has been divided into psychological and institutional level. The psychological level defines individual’s attitude, behavior for the organization and how they react to it whereas the institutional level defines those people who are group into the business organization where they are bound to work accordingly (Verbeke 2013). A home country can guide business organization very well because the people who are native to their hometown have same characteristics of culture. They have the same psychological understanding towards the work. Also they possess the same religious beliefs, behavior patterns and subcultures which add advantage to the growing business culture (Cavusgil et al. 2014).

As per the Hofstede’s theory, he defined the four dimensions, which has intensified the Coca Cola Company. These are

Power distance: In this, the organization power has been accepted by the culture of the people but it is distributed unequally. The distribution is unequal which means that less power distance is related to the participation of the employee, which is very less and high power distance means that the hierarchy of the organization is increasing steeple with the leadership (Leonidou et al. 2015).

Global Market Share

Uncertainty avoidance: this defines that the countries having low avoidance of uncertainty requires more flexibility than bureaucracy does but the Coca Cola Company has a high avoidance of uncertainty where the priority is reflected more upon the organizations procedures and rituals (Wild et al. 2014).

Individualism: this signifies that the individual should take care of himself or herself alone, which would be beneficial for the company.

Masculinity: this refers to the materialistic success, achievement, and assertion of the Coca Cola Company.  

The Coca Cola Company has set up Supplier Guiding Principles for choosing the right suppliers for their company. These principles help the suppliers and the company to communicate between them so that the policies are implemented correctly. To understand this, the theory of value chain analysis is adopted which concentrates on the activities like starting of raw materials to its conversion to final products (Fojcik 2015). This theory has two categories primary activities, which include sales, distributions and operation activities, and the other is support activities, which comprises of human resources and R&D. this value chain theory has proven to be beneficial because it has created much opportunities to secure the advantages of cost and the opportunities for the differentiation of the product (Coca-cola.co.uk 2016). The value chain theory increases the organization’s competitiveness. Reduction in costs, share of market is improved and the profit margin. The global value chains are the most recent ones as it is more prevalent as it integrates the activities of the organizations on daily basis. It means that the workers and the firms, which are geographically separated, can intercommunicate with each other, which was not possible in the past (Teece 2014). This approach leads to the firm establishment of the organization. This global value chain is a framework, which mainly focuses on the retailers, merchandisers that govern the production and distribution globally.

If the suppliers are foreign then there come many barriers in the organizations. The barrier could be of differences in language, methods of payment, and the transportation methods. The good’s origin could be affected by the duty and the raw materials from the suppliers.

Coca Cola has been selling its products in more than 200 countries so it has vast customer countries for running its organization (Coca-cola.co.uk 2016). The customer countries favor globalization. There are two type of customer industry, which favors an organization. They are the facsimile customer industry who emphasizes more on the homogenous factors and the furniture customer industry whose factors or needs are given by the local culture, tastes etc.

Home Country Influence

This company has the planned method of market entry strategies where it role is to deliver the services or goods to the market that is in target and distributing the products. In the case of exporting or importing the services, the market entry strategies refer to managing and establishing contracts in the other countries (Forsgren and Johanson 2014).

The internationalization strategy helps the organization to expand its business outside its domestic domain. They help in making the organization go international by entering new markets; it helps in the cost reduction and enhances competitiveness of the organization. it helps in the exploitation of the core competencies in the new market, helps in sharing higher market risks, the lower cost of labor, lower tax, the natural resources which are cheaper are some of the facilities given by the internationalization strategies (Mellahi and Frynas 2015). Thus, the internationalization strategies help the organization by getting them access to the various markets, helps to get capital from the foreign markets, it also lead to the access to the production valuables of the organization, helps to corporate risk management. It also helps in the launching of new products in the market.

Coca Cola has a major partnership with the WWF to conserve water, as it is one of the most important elements of the nature, which needs conservation. These two companies have a partnership since 2007 to conserve the freshwater (Coca-cola.co.uk 2016). Their partnership aims to provide healthy basins of freshwater in the Mesoamerican Reef in Mexico. These two companies are trying to address the challenges of the natural resources by changing the freshwater impact and thus improving the performance of the environmental conditions. This improvement is done across the supply chain of the company, where its core value is integrated to make some decisions about the process and explaining the influential nearby partners to solve the global challenges of the environment. The partnerships of these two companies are on a global basis but they also serve locally in many of the countries to conserve water and create a secure future of water (Radebaugh et al. 2015). As more and more of the alliances are, being made up in the company they need a strategic alliance, which would make their organization much better and on a higher level. Revenue was considered to be as the major alliance but this was not the only thing there are five other criteria, which determines the strategic alliance of the organization. These criteria are making the business objective as it core goal. Developing the competency of the organization or serves as the reliable source of competitive advantage, the blocking of a competitive threat is another criterion, making the choices, which are strategic for the organization, and last is the risk to the business organization (Thome and Medeiros 2016). The issue with developing such strategic alliance is that the organization needs to figure out as which criteria should be used where and how and what would be the effect of such criteria on the company because if any of the partners misunderstands the strategic alliance then it would lead to the fall of the organization.

Coca Cola is one of the most recognized and biggest beverage companies in the world. It spreads to more than 200 countries having more than 3000 products. The success of this company is due to the strategy, the rules it follows, and the way it takes care of its employees. They do so by making the environment of the place peaceful and having union among the employees. The company has also formulated some policies for the safety of the company and it employees. The company is so huge and has it branches almost everywhere that it has created some databases to keep an account of their customers, suppliers and how they are doing business with their consumers. This company has been able to set up its market strategies to bring a revolution by making its business high, launching more and more of products and increasing the competition with the other companies. Thus, the new companies are unable to keep up with the growing pace. 

References:

Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International Australia.business. Pearson

Coca-cola.co.uk. 2016. Company Structure | Coca‑Cola System | Coca-Cola GB. [online] Available at: https://www.coca-cola.co.uk/about-us [Accessed 23 Jun. 2016].

Fojcik, T.M., 2015. International Business Strategy: Rethinking the Foundations of Global Corporate Success, Cambridge University Press, 2013. Management International Review, 55(1), p.151.

Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.

Leonidou, L.C., Fotiadis, T.A., Christodoulides, P., Spyropoulou, S. and Katsikeas, C.S., 2015. Environmentally friendly export business strategy: Its determinants and effects on competitive advantage and performance.International Business Review, 24(5), pp.798-811.

Mellahi, K. and Frynas, G., 2015. Global strategic management. Oxford University Press.

Radebaugh, L.H., Sullivan, D.P. and Daniels, J.D., 2015. International business: Environments and operations. Pearson Education.

Smith, L. 2016. Foodline Market. [online] Foodlineweb.co.uk. Available at: https://www.foodlineweb.co.uk/foodline/market.aspx [Accessed 23 Jun. 2016].

Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), pp.8-37.

Thomé, K.M. and Medeiros, J.J., 2016. Drivers of successful international business strategy: Insights from the evolution of a trading company. International Journal of Emerging Markets, 11(1), pp.89-110.

Verbeke, A. 2013. International business strategy. Cambridge University Press.

Wild, J., Wild, K. L., and Han, J. C. 2014. International business. Pearson Education Limited.