Wk 4 Case Coca Cola International Strategy
CASE: Coca Cola- The Strategy and Structure of International
Business
Coca Cola, the iconic American soda maker, has long been one of the most international of enterprises. The company made its’ first move outside the USA in 1902, when it entered Cuba. By
1929, coke was marketed in 76 counties around the world. In World War 2, Coke struck a deal to supply the US military with Coca Cola wherever in the world it went. During this era, the company built 63 bottling plants around the world. Its global push continued after the war, feared in part that the
US market would eventually reach maturity and by the perception that huge growth opportunities lay overseas. Today more than 59,000 of the company's 71,000 employees are located in 200 countries outside the USA and over 70% of Coke's volume is in its international markets.
Until the 1980's, Coke’s strategy was one of considerable localisation. Local operators were granted a high degree of independence to manage their own operations as they saw fit. This all changed in the
1980'sand 1990's under the leadership of Robert Goizueta, a talented Cuban immigrant who became
CEO in 1981. He placed renewed emphasis on Coke's flagship brands, where were extended with the introduction of Diet Coke, Cherry Coke, and the like. His prime belief was that the main difference between the USA and international markets was the lower levels of penetration in the latter, where consumption per capita of cola was only 10 to 15 per cent of US consumption. Goizueta pushed Coke to become a global company, centralising a great deal of management and marketing activities at the corporate headquarters in Atlanta, focusing on core brands, and taking equity stakes in foreign bottlers so the company could exert more strategic influence and control over them. It's 'one size fits all' strategy was built around standardisation and the realisation of economies of scale, for example, using the same advertising message worldwide.
Goizueta's global
Business
Coca Cola, the iconic American soda maker, has long been one of the most international of enterprises. The company made its’ first move outside the USA in 1902, when it entered Cuba. By
1929, coke was marketed in 76 counties around the world. In World War 2, Coke struck a deal to supply the US military with Coca Cola wherever in the world it went. During this era, the company built 63 bottling plants around the world. Its global push continued after the war, feared in part that the
US market would eventually reach maturity and by the perception that huge growth opportunities lay overseas. Today more than 59,000 of the company's 71,000 employees are located in 200 countries outside the USA and over 70% of Coke's volume is in its international markets.
Until the 1980's, Coke’s strategy was one of considerable localisation. Local operators were granted a high degree of independence to manage their own operations as they saw fit. This all changed in the
1980'sand 1990's under the leadership of Robert Goizueta, a talented Cuban immigrant who became
CEO in 1981. He placed renewed emphasis on Coke's flagship brands, where were extended with the introduction of Diet Coke, Cherry Coke, and the like. His prime belief was that the main difference between the USA and international markets was the lower levels of penetration in the latter, where consumption per capita of cola was only 10 to 15 per cent of US consumption. Goizueta pushed Coke to become a global company, centralising a great deal of management and marketing activities at the corporate headquarters in Atlanta, focusing on core brands, and taking equity stakes in foreign bottlers so the company could exert more strategic influence and control over them. It's 'one size fits all' strategy was built around standardisation and the realisation of economies of scale, for example, using the same advertising message worldwide.
Goizueta's global