Coca Cola

Topics: Globalization, Multinational corporation, Coca-Cola Pages: 2 (636 words) Published: January 10, 2013
Coca Cola Case Study|


Why do you think that Roberto Goizueta switched from a strategy that emphasized localization towards one that emphasized global standardization? What were the benefits of such a strategy? Localization strategy focuses on increasing profitability by customizing the firm’s goods or services to the intended country’s preference (Hill, 2011). Global standardization strategy focuses on increasing profitability and profit growth by reaping the cost reduction that come from economies of scale, learning effects, and location economies (Hill, 2011). Mr. Goizueta believed that the main difference between the United States and international market was the lower level of penetration in the latter, where consumption per capita was only 10 to 15 percent of US consumption. Thus, he made Coke become a global company, centralizing a great deal of management and marketing activities at the corporate headquarters in Atlanta, he focused on core brands and took equity stakes. Moreover, it eliminated duplication of functions that were conducted in each country and placed strategic control to the headquarters. The benefits of global standardization strategy include cost reduction due to economies of scale and learning benefits. It also reduces duplication of functions which lowers expense. What were the limitations of Goizueta’s strategy that persuaded his successor, Daft, to shift away from it? What was Daft trying to achieve? Daft’s strategy also did not produce the desired results. Why do you think this was the case? The strategy did not address the various cultural differences with the international market. It was not tailored to each country’s preferences. It was a one-size-fit all approach which as time went by became less successful. Daft wanted to put more power into the hands of local mangers. Thus, he fired 6,000 employees from the Atlanta headquarters. He also ceased global advertisement and allowed the local...
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