International Business Strategy: Literature Review Of The Coca-Cola

Discuss about the International Business Strategy for Literature Review of the Coca-Cola.

 

 

This review paper will analyze best international business which in this case happens to be the Coca-Cola company. A leader in the nonalcoholic beverage business, the company was incorporated on September 1819, as a beverage company, the organization has over 500 beverage nonalcoholic brands across the globe. Some of its famous brands include Coca-Cola, Fanta, sprite and diet coke. Coca-Cola company supplies its beverage product through its network of owned and co-owned bottling centers across the world. The beverage content, is packaged in refillable bottles and non-refillable plastic bottles and cans. The organizational market is global; it has a joint venture called Beverage partners worldwide, which markets and distribute products in Canada and Europe. Main competitors include; Pepsi, Nestle, Mondelez international and Uniliver.

To be a leader in the beverage industry, Coca-Cola has developed a number of strategies such as market segmentation, communication advertising, segmentation of the lifestyle in the market and also product differentiation this is aimed to attain an upper hand over its competitors (Michman & Mazze1998, p.233).For example, Coca-Cola introduction of the diet soda called Tab, made its main competitor Pepsi, to introduce Diet Pepsi. The Tab brand was originally a product developed or designed for the female market but with introduction of Diet Pepsi, Coca-Cola, diversified its market, for the Tab to be consumed by men and families too. While Pepsi produced a Diet Pepsi, to counter Coca-Cola markets for Tab, Coca-Cola couldn’t throw away its product with a new rival in the market but diversify the market through the competitive strategy of segmenting more customers that can be on the reach out by the Tab diet brand.

 

Another competitive strategy of the Coca-Cola company, is product differentiation. Coca-Cola has reinvented or made its products different with time and again in the market for relevance.to manage change Coca-Cola has always introduced new brands in the market, for instance in 1989, the organization introduced Power Ade which happens to be a sports drink. In 1990’s Coca-Cola came up with products such as bottled water, fruit juices like minute maid and tea. The Coca-Cola is not resilient introducing new products, as well as differentiating it products to meet the market gap and thus it employs use of competitive strategy product differentiation. (Michman & Mazze1998, p.240).

 

Coca-Cola has highly invested heavily, in promotional or advertising strategy across the globe, what makes its advertising to be a great strategy is advertising on uniform information and Coca- Cola, creative team behind advertising always comes up with appealing information to the markets, for instance in 2013 Coca –Cola invested $3.3 billion geared towards marketing and advertising, in the “Share a coke campaign” the campaign was aimed at allowing the Coca-Cola fans ,to share bottles or cans personalized with their names. The campaign saw Coca-Cola company volume of sales rise at 5% in Germany, Nordics and North west Europe regions.

 

On January 2016, Coca-Cola united its advertising information globally to be the same, embracing the new slogan “Taste the feeling” the Chief Marketing Officer Coca-Cola company Marcos de Quinto justified the advertising campaign by stating that even though, Coca-Cola has different brands in the market, they all share the same values in the market. Whenever coca cola does advertising it is global and the information is uniform, this strategy has helped the organization to inform its clients about the products always.

Use of the media in advertising instill perceptions and preferences in customers, the media is capable of communicating to large numbers and thus making awareness of the Coca-Cola brand globally a reality (Wood,2010, p.82).

For the organizations in the beverage industry to thrive, competitive strategies aren’t enough, organization need to come up with other models that can support the strategies in place. Coca-Cola needs to come up with the corporate social responsibility model. (Mullerat & Brennan, 2005, p.4) Corporate social responsibility involves companies, giving services or money in kind, supporting certain causes in the society where their business operates in. Coca-Cola will need to support causes like donating football uniforms in primary schools where it has a business footprint, the uniforms should be branded with coca cola logo. Coca-Cola can also support digging up of boreholes, especially in African communities, where piped water is very scarce The corporate social responsibility increases shareholder value, the aspect of giving uniforms to football clubs and supporting causes in the society, enables the society to interact more with the Coca-Cola brand. Most investors tend to partner or invest with companies that have certain principles, Corporate social responsibility gives Coca-Cola an advantage to woo investors. (Mullerat & Brennan, 2005, p.127).

Another model to be embraced is the London benchmarking Group model, the model embraces aspects such as corporate social responsibility, corporate interest on a long-term basis and direct commercial interest. This model was formed in 1994 September, it was formed in the United Kingdom and it analyses how different organizations have funded their communities’ activities, the London benchmarking model measures the benefits of community investments to a company, the model will allow Coca-Cola to be mindful of its communication and other competitive strategy since, Coca-Cola engagement with the community is highly measured. In a world whereby people are fighting with obesity and cancer is becoming a global threat, Coca-Cola can highly encourage people to consume the Diet Coke Tab and engage the community with a corporate social responsibility of education on healthy living (Hancock, 2004, p.19-20)

Another aspect of the London benchmarking model is a long term corporate interest; companies should not be seen using certain brand aspects in the mother countries only but also globally whereby they have business, Coca-Cola should be seen having an impact in its market directly, they should create employment in host countries. Natives of the business host countries should be the people employed and not export talent from their mother countries to where they have business. Creating opportunities in other countries increases the believability of the Coca-Cola brands. (Hancock, 2004, p.23)

Profit model for the business can be used by Coca-Cola in its operations, the model focuses on the pricing of the goods by the stakeholders, this design focuses on where the income originates from, the cost of business operation and the relationship between income and expenditure, the model looks at deriving income from the customers as it reduces the cost of production. (Lin et all2015, p.1-2).  Since Coca-Cola has continuously reinvented its goods, the model can really be in sync with Coca-Cola operations as it embraces innovation, as well as cost reduction while generating huge corporate profits. (Brandenburg, 2013, p.41). The profit models take into consideration too, on the cost of the fixed assets of an organization and impact of the assets on the shareholder inputs monetary value or investments. Coca-Cola has assets globally and thus it is the high time that the business examines the assets in each and every country of operation, the cost of managing the assets and the profit margin to the shareholders of the company.

After an analyzing various models to be used internationally for the Coca-Cola international business execution, I highly recommend the corporate social responsibility model to be deployed in Coca-Cola as a corporate entity globally. As discussed earlier the model advocates, Coca-Cola to give services or money kind to the community where it operates. This will in the long run woo investors and believability in the markets they operate. (Mullerat & Brennan, 2005, p.4.).

Factors to consider include; All the teams of the organization where the organization has a presence should be highly made aware of the corporate social responsibility activity and the period which the activity will be rolling out, this is a strategy that will be executed by the communications team, with the help of human resources department. (Aras, 2016, p.357-359).

Increasing employee’s awareness is the first step towards execution of the model.

Coca-Cola should have a future vision about the goal to the organization, the organization should factor in the relevance of the event pursued in organization future presence, that is if it is within the vision and mission of the organization. (Ward & Smith,2008, p.13).

The organization should consider a factor like budgeting for the entire corporate social responsibility activity either as a corporate entity or in various places they have business, there should be a team that does the whole cost analysis. (Nicholson & Meek,2010 p.184).

It is the duty of the top managers, or directors to execute the event into a reality, they should be seen as the first selling points of the event especially when availing the event. (Idowu & Louche ,2011, p.39).

After Coca-Cola has informed, budgeted and executed the CSR event, it has to factor the monitoring aspect of the activity, raising concerns; like how relevant has the project been? what needs to be improved in future? and so forth (Katamba,2012, p.5).

The paper has availed a review of international business and in this context, Coca-Cola was used, a global leader in the soft drink beverage business, the competitors and its mode of operation was analyzed. Several competitive strategies of Coca-Cola like market segmentation and product differentiation have been discussed. The paper farther points out on the models, like the corporate social responsibility, to be used in the soft drink beverage industry where Coca-Cola plays a key role. Last but not least in the paper I have covered the corporate social responsibility model plan execution and factors to consider for the model to be a reality.

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Coca- cola(KO). (2016, August 09). Retrieved from https://www.reuters.com/finance/stocks/companyProfile?symbol=KO

Hancock, J. (2004). Investing in corporate social responsibility: A guide to best practice, business planning & the UK’s leading companies. Kogan Page Publishers.

Idowu, S. O., & Louche, C. (2011). Theory and practice of corporate social responsibility (p. 284). Berlin: Springer.

Jay. M (2016, Jan 19). One Brand’ Strategy, New Global Campaign UniteCoca-Cola Trademark. Retrieved from https://www.coca-colacompany.com/stories/taste-the-feeling-launch

Katamba, D. (2012). Principles of Corporate Social Responsibility (CSR): A Guide for Students and Practicing Managers in Developing and Emerging Countries. Strategic Book Publishing.

Lin, G., Wei, W., & Zhu, W. (2015). The Principle of Profit Models. Springer.

Michman, R. D., & Mazze, E. M. (1998). The food industry wars: Marketing triumphs and blunders. Greenwood Publishing Group.

Mullerat, R., & Brennan, D. (2005). Corporate social responsibility: The corporate governance of the 21st century. Kluwer Law International.

Nicholson, F., & Meek, R. (2010). CIM Coursebook: Managing Marketing. Routledge.

Sharon. B (2014, Nov20). Investor insights on the non-alcoholic beverage industry. Retrieved from https://marketrealist.com/2014/11/guide-non-alcoholic-beverage-industry/

Ward, H., & Smith, N. C. (2008). Corporate Social Responsibilty at a Crossroads: Futures for CSR in the UK to 2015. IIED.

Wood, R. C. (Ed.). (2010). Strategic questions in food and beverage management. Routledge.