Case Analysis: Coca-Cola
Coca-Cola is one of most well known brands in the world today. This company has continued to gain growth, momentum and capitalizing on the rapidly expanding beverage industry and ranking as the largest beverage company in the world (Coca-Cola Company, 2014). With its push for global market share, Coca-Cola now operates in over 200 countries with over 84,000 suppliers. Currently, over 70% of Coca Cola’s business income is generated from non-US sources (Coca-Cola Company, 2014). In over a century, Coca-Cola has grown the company into a multi-million dollar business. This case study discusses the history of Coca-Cola and its leadership and marketing strategy over the years. In the case study, we see that each CEO developed and implemented a unique marketing strategy that produced different results over time. The following questions will be assessed base on facts provided in the case study and international business concepts from our textbook: 1.) Why do you think that Robert Goizueta’s switched from a strategy that emphasized localization toward one that empathized global standardization? What were the benefits of such strategy? 2.) what were the limitations of Goizuata’s strategy that persuaded his successor, Daft, to shift away from it? What was Daft trying to achieve? Daft strategy also did not produce the desired results. Why do you thin was the case? 3.) how would you characterize the strategy pursued by Coca-Cola under Isdell’s leadership? What was the enterprise trying to do? How is this different for the strategies of both Goizueta and Daft? What are the benefits? What are the potential cost and risk? 4.)What does the evolution of Coca-Cola’s strategy tell you about the convergence of consumer’s tastes and preference in today’s global economy? “Globalization allows firms to increase their profitability and rate of profit growth in ways not available to purely domestic enterprises (Hill, 2013). “ Goizueta’s switch from a strategy that emphasized localization toward one that empathized global standardization was implemented due to the fact that he recognized a lowered level of “penetration” in the international markets, where the “ consumption per capita of colas was only 10 to 15 percent of the U.S. figure” (Hill, 2013). This was a gap in the company’s strategy at the time and Goizueta knew with this gap closed, the firm can increase their revenue and profit. Due to this change, Coca-Cola became a global company, with a great deal of management and marketing activities left in control of the corporate headquarters, and they began to direct their focus more on core brands, and taking equity stakes in foreign bottlers so that company could gain more strategic control (Hill, 2013). With the success that the company had with the globalization strategy, there were still some limitations, which persuaded the new CEO of Coca-Cola to shift away from it. According to the case study, Goizueta’s strategy was a “one fits all” strategy”; and after some time, it began to lose its message and power as smaller local competitors marketing local beverages began to have more competitive advantage over Coca-Cola (Hill, 2013). Coca-Cola’s limitations at their failure to tailor their products to the local environment and effectively meet consumer’s needs. By neglecting Goizueta’s strategy and formulating his own; Daft was trying to restore the locals’ power that was taken away from them, and tailor strategy, product development, and marketing to local needs. This strategy did not produce great results as expected because Daft abandoned global advertising and place advertising budgets and control over creative content back in the hands of the local managers (Hill, 2013). With the slightly disappointing results form Daft’s strategy, Coca-Cola hired another CEO Neville Isdell, who implemented another strategy to improve the financial...
References: Hill, C. W., (2013). International Business:Competing in the Global Martetplace (9th ED). New York, NY: McGraw Companies.
Coca-Cola Company., (2014). Retrieved from http://us.coca-cola.com/home/#
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