Reworded

However I am going to take a case study of Coca cola Company, its global business strategy and how it utilizes it to become successful in the global market.

According to a report by United State Securities and Exchange Commission (2006) the Coca-Cola Company was established in Atlanta, Georgia, in the year 1886. The company is considered to be the world number one non-alcoholic beverages company, leading in manufacturing, marketing and distribution of its product (concentrate and syrups). Concentrates and syrups are being sold out to bottling companies for final dilutions and packaging to consumers, Coca-Cola Company produces a wide range of about 500 different beverage brands across the world. In the late 1920’s the company begins its journey for globalization and presently operating in more than 200 countries following a simple global formula “Provide a moment of refreshment for a small amount of money – a million times a day”.

The Coca-Cola Company together with the bottling companies forms the best production and distribution system in the world, the system is designed in such a way that employees dedicated and put the company’s objectives as their number one priority. Products of this company have proven to be the number one soft drink in quenching consumer’s thirst of non-alcoholic soft drinks from Moscow to Montreal and from Beijing to Boston all over the world for more than 115 years of its existence. One of the key objectives of the company is to increase its market share-value, which was achieved by operating with associates with the aim of satisfying customers and valuing customers’ interest as well as protecting company’s assets and minimizing business risks. However Coca cola utilizes the following business strategies.

Political changes in accordance with the ruling government, changes that has to do with government regulations, majors and policies as to how a company should operate and as to how the products should also be. By setting up those rules and regulations the government intervene with the company’s decisions because the board have to make sure in every decision that is being made those roles and regulations must in no circumstance be violated, some of which includes monitory policy, trade restriction, recruiting policy, environmental policy.

However, aside from the FDA’s requirements other political majors that are being set in accordance with the jurisdictions of countries include income tax, import and export regulations and the uncertainty of political crisis. Political crisis can be in form of protest, which might affect the demand of products, as well as political violence that makes it hard for the products to penetrating in political crisis zones.

Economic factors, which companies uses in forecasting future decisions on investment. These include interest rate, inflation, standard of living, wages, exchange rate, unemployment rate and the overall economic growth of the country. These economic factors differs in each of the operating countries, which is why before a company venture any country it has to comprehensively analyzed the economy of the country considering the upper mentioned factors.

Economic growth of a country gives a company a glimpse of high purchasing-power; this is what most marketers use in penetrating the market. Coca-Cola Company uses this tool to market their product across the world, which brought about the 63 different types of currency being used by the company. However, due to constant fluctuation on exchange rate strong or weak currency are some of the determinants of exporting product worldwide which is very important as the company generate 72% of its operating profit outside the United State.

Furthermore, another major economical tool is the interest rate imposed on borrowed money. Changes in interest rate affect the financial status of a company and further investments as it increase total cost, the Coca-Cola Company manage to cope with interest rate fluctuation by implementing a derivative instrument. In the case of inflation, the Coca-Cola Company sorts their employees with higher wages and salaries in countries with high inflation rate so as to enable them cope with the situation. This increase in wages increase product cost and couldn’t be reflected on the product price due to the competitive and risk of the market, a threat being faced by external environment in most companies.

The social factors have to do with people’s cultures, traditions, health perception, safety majors, population growth and new trends among the population. A company is not expected to change the social factors but rather, to adapt and adjust to suit these social factors.

This is a very important section as regards to a company like Coca-Cola that has a direct link to the customers; companies of this nature are considered to be B2C. Countries are diversify in terms of culture and tradition, this element have to be absolutely analyzed before introducing marketing and introducing products. Coca-Cola Company has about 3300+ different products, in penetrating new market after intensive market analysis the Company start by introducing few of their products based on the social factors of the general population subsequently increasing products based on social factors.

Technology plays several functions in beverages industry as with the manufacturing new products, packaging product and distribution of products.

Coca-Coca Company rely on its bottling partner for packaging, 83% of case volume produce across the world is being manufactured by bottling partners which the company don’t have total control power over. This is why it’s essential for the company to keep a healthy relationship not just with its bottling company but within and outside the entire departments companies involved.

The availability of different Coca-Cola packaging has everything to do with the advance in technology; various vending machines are available all over the world. This led to the production of some stylish non-refillable bottles and cans, which are trending among youth and attractive to children which also serves as a marketing tool for promoting products.

International Differentiation Strategy

Differentiation strategy is defined as a marketing technique used by a manufacturer to establish a strong identity in a specific market. It also may be referred to as segmentation strategy. Using this strategy, a manufacturer will introduce different varieties of the same basic product under the same name into a particular product category and thus cover the range of products available in that category. There are several ways a firm can differentiate its’ products. We focused on two aspects of this; branding and cost leadership.

International Diversification Strategy

“With a portfolio of more than 3,300 beverages, from diet and regular sparkling beverages to still beverages such as 100 percent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages, our variety spans the globe.” (List, 2010). Sparkling beverages, such as the brands Coca-Cola, diet Coca-Cola, Sprite and Fanta are part of the traditional range of refreshment products offered by Coca-Cola. Products in this category are an important segment, offering consumers an enjoyable and satisfying solution to maintain good hydration. This strategy has really helped the company penetrate into the global market.

International Marketing Strategy

This section concentrates on marketing strategies in international business and ways Coca-Cola has established these strategies around the world. First, one must understand that globalization has become a trend in response to nontariff trades and the growth of elimination of barriers, which has helped the marketing of international brands. International marketing strategy can be defined in many ways. International marketing strategy is the manner in which an organization performs based on a predetermined set of activities in order to plan, promote, price and distribute a good or service for a profit to consumers in various locations (Cateora & Graham, 2007, p.9). Van Mesdag also describes international marketing as a company having a marketing strategy in different markets depending on the market characteristics (Van Mesdag, 2000, p.75).

Coca-Cola’s strategy is noted to be “global.” This strategy is a combination of both strategies previously described. By attaining both qualities of each strategy, Coca-Cola enjoys of an identifiable brand image as well as instilling local practices that allows them to create and embrace cultural differences. Coca-Cola prides itself not just for its distinguishable brand but for its attentiveness to local markets’ needs.

Conclusion

We performed an in-depth review of how effective or ineffective Coca-Cola was in implementing each of the six strategies discussed in their operations in the United States, China, Belarus, Peru, and Morocco. We have found that Coca-Cola’s global brand’s success is accredited to its “think global, act local” campaign. Most of their marketing strategies focus specifically on local culture and customs. Localization is a key element in the effectiveness of Coca-Cola’s international strategy plan. We have also noted Coca-Cola’s performance could be better when compared to other mid-sized companies.

REFERENCES

1. Albaum, G., &Tse, D. K. (2001, August). Adaptation of international marketing strategy components, competitive advantage, and firm performance.

2. Ahmad ElAmin (2007). “Coca-Cola reports progress in red environmental impact” William Reed Business Media. United State.

3. Brian Nordmann (2004) “Organizational Structure”