Coca Cola company is a multinational corporation of American origin which manufactures beverages. The company is also a retailer, manufacturer and the marketer of various non-alcoholic beverages, syrups and concentrates. Coca-Cola company is mainly known in the market for the flagship product Coca-Cola which was invented in the year 1886. The headquarter of the company is located in Georgia, United States. The organization currently supplies its products to the different countries all over the world. The total worldwide revenues that have been earned by the company in the year 2017 has amounted to 35.410 billion US Dollars (Coca Cola.com 2018). The company also has an employee base of more than 60,000 members. The various brands that are manufactured and supplied under the brand of Coca Cola include, Healthy beverages, Green tea, Glaceau, Huiyuan Juice, Holiday can, Coke Mini can and many more. The organization provides sponsorships to various events which include, sports, theme parks and television programs. The company has been successful in growing at a rapid pace with the help of the different brands that are offered to the consumers (Coca Cola.com 2018).
The essay will be based on the analysis of the international strategy that has been implemented by Coca-Cola in the various international markets. Coca-Cola has been hugely successful in its international ventures and has become the first organization to register sales of 1 billion Euros in the year 2017.
The international strategy of Coca Cola company can be analysed based on the IR framework. The constantly growing market of the organization is based on the technologies, the knowledge and the integration of the market in which it operates. The organizations need to face huge challenges when they move from their home country to a new region on an international basis. Coca Cola had been invented in the year 1886 in Atlanta Georgia. The major reasons that have led to the global ventures of the company are based on distribution, cheap labour, transportation, increase in the disposable income and cultural convergence. The organization has been making huge investments in the emerging markets of the world which is a major part of its international strategy (Perri and Peruffo 2016).
The companies plan their global operations normally when the domestic markets become saturated in nature. The better means of communication and faster modes of transport have further led to huge globalisation and the world has become a global village within a short period of time. The global marketing process is based on two different strategies which include, standardization and adoption. Coca Cola is also well aware about the requirement of a perfect strategy related to global marketing. The organization has its operations in more than 200 countries and has become a famous brand in the world. The standardisation strategy was applied by Coke in the year 1996 and the company was quite rigid about this decision (Cortina, Köhler and Nielsen 2015). The company made a decision of taking the same of Coca Cola in the different countries of its operations. The of the company had been “think global, act global” and the labels and standards of the products of Coca Cola remained the same throughout the world. The strategy had proven to be successful for the operations of the company in different countries. The company was able to earn 67% of the revenues and around 77% of total revenues in its operations outside North America. However, this strategy had been quite successful for the increase of revenues of the company in Asia due to the currency crisis related issues (Cavusgil et al. 2014). The strategy was changed by the CEO after Coca Cola company faced losses due to its implementation in the countries of Asia. A new strategy was implemented by the management of Coca Cola in the year 2002. The local marketers of various areas were guided by the marketers present in the head office. The new strategy was not as rigid as the previous one and it was a customised form of the actual strategy that had been formulated by the Coca Cola company previously. The marketing mix of the company went through little changes and corn syrup was used in the beverages instead of sugar syrup in some of the countries (Singh 2016). This strategy has proved to be successful for Coca Cola company as compared to the previous ways. The branding of Coke was maintained, however, the products, the prices, the placement and the promotional activities were customised according to the needs of the local consumers.
Coca Cola is the largest beverage manufacturing company in the world. The company has used various processes of decision-making based on the needs of the individual markets. However, the global strategy of the brand has remained the same with the help of collaborative practices. Coca Cola has been one of the most active global companies in the world and has acquired 80% of the total market in its operations outside US. The organization has thereby proved to become the most experienced in tackling various emerging markets where it operates (Kolk 2016).
Coca Cola has made many changes in its international strategies during the course of its operations. The company has always been successful in adapting itself to the changes that take place in the external environment in which Coca Cola operates. The five major strategic actions that have been taken by the company in the various years of its operations are as follows,
The Coca Cola company had taken aggressive measures in the year 2015 for the purpose of accelerating the refranchising related activities of the territories of Coca Cola that are Company-owned in nature. The effective global strategies of Coca Cola have thereby been able to bring Coca Cola to a positive position where it can operate easily (Stahl and Tung 2015).
The relationship that has been developed by Coca Cola with its consumers has become more global and powerful in nature. The company was also identified as an admired trademark in the world. The loyalty of the consumers of the company further increased in the process and the new taste of the products was an instant hit. The global strategy that had been formulated by Coca Cola had led to the increase of consumers on all the continents. The advertising related activities of the company were also based on the simple pleasures of life. The global network of the organization was started from the year 1920 (Ha and Giroud 2015). At present the company has its operations in 200 countries and has produced around 450 brands which are based on a successful global formula. The distribution and the production system of Coca Cola is considered to be efficient in nature which has been a major force behind the huge success of the company in the industry. The Coca Cola company has been able to bring a successful and sophisticated consumer product along with its huge network of bottlers. The company has been successful in creating a special moment in the lives of its loyal customers. The history of the organization is based on these special moments and the unique advertising activities undertaken by Coca Cola company. Coca Cola has been strengthening its position in the market based on each moment in the beverage industry (Buckley and Ghauri 2015).
Coca Cola has followed the strategy of operating on a local scale within the various communities where it has its operations. The global reach of Coca Cola company is being increased with the help of the Coca Cola system which is based on the 250 bottling partners of the company all over the world. The entire system of Coca Cola is not a single entity from the managerial or the legal perspective as well. The system of the organization is based on the operations of different local channels which are a part of the distribution network of Coca Cola (Kingsley, Noordewier and Bergh 2017). The company is responsible for the various promotional activities that are related to the promotions of the brands that are owned by Coca Cola. The bottling partners of the company on the other hand responsible for the manufacturing, packaging, merchandising and distributing the beverages in the local areas of operations of Coca Cola. The bottling partners of the company work closely with the customers of the local areas like those of the grocery stores, the restaurants, street vendors, movie theatres and many more. The bottling partners are further responsible for executing the localized strategies which are developed in the partnership with the company (Clougherty et al. 2017). The company owned bottling partners of Coca Cola had further formed a Bottling Investments operating group which is now the second largest partner of bottling of the products of the company. Coca Cola has always relied on independent franchises of bottling for its operations in the different local markets. This strategy has proved to be quite successful for the company to increase its profitability. The Bottling Investments Group was created for ensuring that the bottling operations can remain an integral part of the entire system of Coca Cola. The BIG Group started making investments in the select bottling based operations and taking them under the ownership of Coca Cola. The major goal of BIG is to search for a qualified bottler so that the operations can be assumed and the business can continue to grow (Ayyagari, Dau and Spencer 2015).
The innovative marketing campaigns of Coca Cola have been a major reason behind the huge success of the company in the market. The organization is known in the industry for selling happiness in the bottle. The “Open happiness” campaign of Coca Cola was introduced in the market in the year 2009. The social issues in the world have also been taken into account by the company while promoting its products in the market. The new CEO of the organization Marcos de Quinto however had negative views of the effects that the campaign can have on the customers. The over preachy nature of the advertisement had been a reason behind the lack of belief on the campaign that was shown by Marcos (Meyer 2015). The first big move that was taken by Marcos soon after his appointment was to close the “open happiness” campaign and replace it by a new campaign under the name of “taste the feeling”. According to Marcos this campaign will be helpful in placing Coke in the centre of the various advertisements that will be designed by the company. A significant strategic shift will take place in the company which will further adopt the “one brand” approach. This strategy aims at uniting many varieties of products offered by the company including Coke Zero and Diet Coke (Contractor et al. 2014). The campaign had been announced in the year 2016 in 200 countries where Coke is currently being sold. The “Open happiness” strategy of Coca Cola was based on different societal issues. The main aim of Marcos was to maintain the image of Coca Cola by placing advertisements which tell emotional stories. However, instead of huge societal issues the advertisements will be based on the daily activities of the customers which would place the product in the centre of everything. The advertisements would be based more on the product instead of focussing on the brand of Coca Cola (Cuervo-Cazurra 2016). The advertisements needed to maintain the simplicity related to the products offered by Coca Cola and ways by which people associate with the products. This move taken by the new CEO of the company had been a major driving force for increasing the profitability of Coca Cola in the market. The strategy employed by Coca Cola had further led to the selling of smaller packs of the product which were able to provide more financial benefits to the company on the long run. The company had also been able to increase its consumer base with the application of this strategy in the market. The “one brand” based strategy of Coke has also been quite critical to the launch of the new campaign of Coke (Millar, Grant and Choi 2016). The company had decided to stop the separate campaigns that were made for the promotion of products like. Diet Coke and Coke Zero. The main reason behind this step was that the CEO felt that the loyal customers of the company are divided and are getting confused due to the introduction of healthier products of the brand Coca Cola (Cantwell 2015).
Coca Cola had been able to show fast expansion rates in the various new markets of the world after the establishment of the company. The major expansion related plan of Coca Cola was based in India in the year 1950. The emerging market of the country had been quite attractive for operations of Coca Cola. However, due to some major issues in the foreign policies that company had to exit the market in the year 1977. Coca Cola returned to the Indian market in the year 1992 and its official operations started in the country in the year 1993. The return of the company to India was great news for the consumers of the country (Lien and Filatotchev 2015). The organization had been able to gain the position of a market leader in India within a short span of time. The Indian economy was made open to foreign investments in the year 1990, which was the main reason behind the re-entry of Coca Cola in the market. The company first planned a joint venture with Britannia Industries Limited, which did not work out finally. The company then made a major move by forming a strategic alliance with the Parle Group and by acquiring its famous brands including Thums Up spicy cola. This strategic alliance helped the company to gain access to the infrastructure of the nation based on bottling and distribution (Alcácer, Cantwell and Piscitello 2016). This deal helped the company to gain around 60% of the share in the Indian within a short time period. The return of Coke to the Indian market thereby proved to the be strongest and the wisest move for the company.
Coca Cola has however made a huge mistake by trying to enter the Chinese market by acquiring the Chinese company named Huiyan Juice. The Chinese government did not approve the deal in spite of the announcement made by the Coca Cola company. China was not considered as an emerging market by the government due to the recent developments that have been made by the country recently. The different foreign organizations are trying to enter the Chinese market in a vigorous manner. The government had thereby rejected the deal to protect the Chinese market from monopoly of a single organization (Welch and Björkman 2015). The Chinese juice company would be capable of providing Coke with the much needed penetration of the Chinese market which comprises of a huge consumer base. The move that had been made by Coke to enter the Chinese market was quite smart in nature. However, the attempt to enter the market failed as the company had not taken care of the laws that are followed by the government of the country related to the entry of a foreign organization. This had caused Coca Cola a loss of the huge potential market base in China (Canare, Ang and Mendoza 2016).
Coca Cola has received a rank among the top 10 respected brands in the world based on its engagement in various CSR activities. The CSR activities of the company have thereby been a part of the effective strategy related to the business of Coca Cola. The organization has been successful in benefitting a lot from the CSR based activities that are performed by the management. Coca Cola had to face huge criticisms related to its ways of operations in the countries like USA and India. Coca Cola was given the name of the corporate villain in these countries. The CSE or corporate responsibility report of the organization had not been favourable for the growth of Coca Cola in the industry (Ajami and Goddard 2014). The CSR related activities that are being performed by the company in the recent times have helped Coca Cola to earn goodwill in the market. Coca Cola has gained many awards for its excellent contribution to the society and this influenced the behaviour of the consumers towards the brand. Coca Cola has contributed to the issue related to community well-being and the sustainability of the environment. The company was termed as a corporate villain by an NGO based in India, due to the wrong usage of natural resources by the company (Meyer and Peng 2016). The major allegations that were made against the organization was based on the levels of pesticides that were present in the products manufactured by the company. The company was also fined regarding the unethical activities undertaken in its manufacturing processes in the year 2010. Coca Cola had to go through long legal implications and further the organization lost a huge number of customers and stakeholders. The company then applied the theory of strategic philanthropy which helped in creating CSR activities which can affect the revenues of the company (Davis 2014). The Aqueduct Alliance was the first step that was taken by Coca Cola to win back its consumers and stakeholders. The move was taken to strengthen the reputation of the company with respect to, general society, evading any personal liability, preparing the organization against any future claims related to the consumption of groundwater. The increment of the ecological transparency of the company and further combining it with the value provided to the shareholders has been a solution to the major issues being faced by the company. The involvement of Coca Cola in Aqueduct Alliance has reflected upon the corporate movement of the company (Meyer and Peng 2016). The movement had been undertaken by the organization based on the ecological concerns of Coca Cola combined with the marketing related practices. Coca Cola thereby believes that the development of the diplomatic programs needs to be a part of the strategies formulated by the organization. The strategic investments in these programs will be helpful in providing high returns to the company in the short term and long term as well. The new dialogue that has been developed by Coca Cola states that the importance related to the successful combination of purpose and profit (Canare, Ang and Mendoza 2016).
Conclusion
The essay can be concluded by stating that Coca Cola has been successful in its operations internationally in the various countries. The company has however faced some obstacles in the operations in some of its international operations which have affected the growth of Coca Cola. The internationalisation strategies used by Coca Cola have also been a major part of the growth of the company in the world. The organization has faced some major issues related to the ways by which it has fulfilled its social responsibilities. The company has thereby formulated strategies to improve the social responsibility related activities in the industry.
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