Management in Global Economy
August 12, 2012
Professor Thomas Brantle
A global leader in the beverage industry, the Coca-Cola Company offers hundreds of brands including soft drinks, fruit juices, sports drinks and other beverages (The Coca-Cola Company, 2012). The Coca-Cola established itself as a premier beverage business by maximizing its production and distribution throughout the world. These strong production efforts were met with equally effective marketing campaigns which led to it becoming the biggest beverage company in the world. Coca-Cola operates on a local scale creating a global reach with local focus because of the strength of the Coca-Cola system, which includes the company and 300 bottling partners worldwide – including India and Colombia.
Coca-Cola is a multinational business which is a business that operates in more than one country. These companies are a well-established brand and are recognized across the globe. These businesses are large and highly influential, because they bring inward investment to the countries that they are expanding internationally in to. With the barriers to international trade falling, companies like Coca-Cola pursued international strategies to gain a competitive edge. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today.
Recognizing that the world is changing all around, Coca-Cola continues to thrive as a business. They understand the trends and forces that will shape their business in the future and prepare what’s to come (The Coca-Cola Company, 2012). Coca-Cola’s vision is all about the global market, and expansion. Coca-Cola’s mission clearly states they plan to refresh the world, inspire moments of optimism and happiness, and create value and make a difference in the world (The Coca-Cola Company, 2012). Coca-Cola has not been narrow-minded but visionary in their goals. They are focusing on the international market, all of it.
Coca-Cola made its debut in Atlanta in 1886, quickly focusing on making a presence in the United States. In the early 1900’s, Coca-Cola was enjoyed in 8 countries worldwide, the beginning of internationalization. Towards the early 1990’s, they continued with new markets and brands which lead to the acquisition of Thums Up ® in India.
Coca-Cola’s expansion into India was logical, the country has billion-plus consumers, a growing middle class, and the climate is hot. In the early 1990’s, Coca-Cola was entering new markets which included returning to India. After earlier challenges, Coca-Cola wanted to emerge in the market that was thought to be a logical with a country the size of India. Another large bottling company includes Coca-Cola FEMSA, the largest bottler in the world, in terms of sales volumes, delivering more than 2.5 billion unit cases per year covering Latin America. Coca-Cola FEMSA operates in most of Colombia. In 2003, Coca-Cola FEMSA acquired Pan-American Beverages and began producing and distributing Coca-Cola trademark beverages in Colombia. In February 2009, another acquisition was made to increase the market presence in Colombia, giving FEMSA the title of the largest bottler in Latin America.
To facilitate growth and make an international presence, Coca-Cola had to determine how they would diversify into the international market, and develop a strategy to do so. A strategic alliance is an option in a firm’s corporate strategy and is defined as a partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial (Ahlstrom & Bruton, 2010, p. 118). A strategic alliance is what Coca-Cola used to enter into India and Colombia. Traditionally, the Coca-Cola’s main technique for entering and building foreign markets had been through independent bottlers, to whom it sold its...