Globalisation and Coke

Topics: International trade, Globalization, Coca-Cola Pages: 11 (3306 words) Published: April 2, 2011
GLOBALISATION – The world today has been described as a ‘global village’, this stems from Marshall Mc Luhan’s concept that ‘the globe has been contracted into a village by electric technology and the instantaneous movement of information from every quarter to every point at the same time’.

Mc Luhan has only described one aspect of how the world has become a global village. A closer examination of globalisation will indicate that indeed the barriers of space, time and borders which once existed have now disappeared or are disappearing.

Globalization has been described as the rapid increase in cross-border economic, social, technological exchange under conditions of capitalism, which also, influences all spheres of our life: culture, business, trade, politics, environment and even our mentality. It connects different countries and makes their interaction easier.

The globalization of the world economy is reflected in many ways. The General Agreement on Tariffs and Trade (GATT) simulates free trade between countries by encouraging the reduction of tariff and non-tariff barriers (e.g. local content requirements, safety regulations, etc). This allows firms to trade more easily and move around the world. A result of this increased mobility is the increasingly large scope of money and capital markets and general regulations on Foreign Direct Investment (FDI).

Globalization implies that there are forces that are global, objective and universal which restrict not only diversity, but also the scope for national governments’ policy formulations. An example of this, are the conditions of the IMF loan to the British Labour government in 1976 which led to a greater role for the private sector and forced the government to implement policies contrary to their manifesto.

Additionally, a growing inter-independence through technology is bringing people together. People are better able to communicate with, understand, and learn from each other using technology as a standard tool.

Globalization is characterized by challenges such as environmental degradation, over-population, over-consumption, public health, and education. The integrating global economy, legal system, culture, infrastructure and the widespread recognition and acceptance of human rights such as equality of opportunity, and freedom of thought and expression are other factors we are facing together as a world.

The globalization of markets is one of the most significant developments of the twenty first century. It impacts on the economic transactions, processes, institutions, and players.

The liberalisation of information and communication technologies has resulted in a lower cost for information, furthering globalization. Technological developments have also resulted in reduction of size of components and products. As a result transportation costs have dropped and global sourcing has become common practice.


To be successful in terms of time to market, customer satisfaction and cost-effectiveness; companies must internationalise, that is, plan and develop for the international market from conception of the product.

Globalisation challenges established norms and behaviour thus, it requires different mindsets. However, globalization creates opportunities for the well-prepared participants who are futuristic and possess insight.

It also reflects the increasing frequency of cross-border transactions and financing and the heightened level of competition.

Multinational corporations (MNCs), that is corporations that have their facilities and other assets in at least one country other than its home country, have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management;

MNCs, under the framework of the Bretton Woods institutions (World Bank, International Monetary Fund) and the World Trade Organization (WTO) have achieved a standard international...
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