International Development of Coca-Colaadmin / December 17, 2018
Coca-Cola Company was established by Doctor John Pemberton who was a pharmacist in Georgia Atlanta. The coca-cola formula was created in a brass kettle in his garden. The name coca cola was recommended by his book keeper, Frank Robinson. Therefore, this paper focuses on the history and international development of Coca Cola Company.
History of Coca-Cola
The coca-cola drink was first sold at Jacob’s pharmacy in 1886 with 9 servings per day. Coca-cola became America’s most popular drink by 1890’s due to Asa Candler’s aggressive marketing; he also reinvented the coca-cola formula.
The drink was sold all over United States and later in Canada. Today, the coca-cola drink is sold in many countries across the world because the Company makes concentrate and sells it to licensed coca colas bottlers all over the world.
These coca-cola bottlers create finished products in bottles and cans. The drink concentrate is mixed with water and sweetener and then distributed to retailers. The coca-cola has many cola drinks, which include the caffeine free coca-cola, diet coke, coca-cola cherry, coca-cola zero, and coca-cola vanilla.
Coke’s Globalization Strategy
According to Luthans & Doh (2009), coke has spread globally and it is renowned worldwide. It has many customers in North America with 30% earnings, Latin America with 25% earnings, Europe and Middle East with 22% earnings, Asia with 17% earnings, and the least in Africa with % Earnings. Trade in many businesses has become global because of technology with improved communication channels and transportation.
Many consumers have access to better products from many countries and this has led to coca-cola’s improvement in global marketing strategies. The coca-cola image is globally recognized, placing the company in the competitive edge. The company has a great symbol of value. Its bottling system allows countries to do business worldwide and also to maintain a business approach.
To increase profits and sales, the Coca-Cola Company wants to change its image; for instance, the company aims at changing the shape of its bottles to cater for different markets. Another strategy for the growth of coke is to enlarge internationally where sales of soda are still growing, particularly in countries like China and Brazil. Also, the company considers the health concerns by introducing drinks with little or no sugar.
Additionally, Punima (2000) concurs that coca-cola started a social marketing strategy by managing social media communications for over 206 countries. This enables the employees and partners around the world to speak on behalf of coca-cola and they are able to review the social buzz comments about marketing of products and are able to respond. This helps them to put important information on their websites.
Similarly, Coke’s main objective in globalization is maintaining the sustainable growth with commitments for long term goals. It has a wide plan of innovation with improved efficiency and effectiveness.
The company has created several brands that focus on health and wellness of different countries with different cultures. Apart from soft drinks, Coke has new brands of juice, sports drinks, water, milk, and coffee, and each day the company is looking for new ways to create other beverages for better nourishment and enjoyment.
Effects of Coke’s International Strategy
Coca-cola has gained trust from different countries because of the sale of non-alcoholic drinks and still continues to foresee the consumer’s needs all over the world. Annual marketing budget has increased with the launching of new products and helping the retail customers to get the most out of sales.
With products being available worldwide, human resource deliver unique services and low cost products thorough survey of staffing services, proper pricing strategies and effectiveness.
Globalization has led to multicultural and multi-linguistic leaders all over the world. This means that the company has hired managers across the borders who manage workforce planning and deal with transnational teams, manage competencies with cross-national recruitment, select and train, and manage attitudes and behaviors of cross-national labor force with different cultures.
Korey (2003) argues that competition from other countries that sell coca-cola affects product innovation, which does not have access to supply chain or other resources available.
Larger companies are likely to be more innovative than smaller firms. Countries with business friendly environment and easy access to supplies promote innovation and hence, highly innovative countries are able to perform better than the less innovative.
In this regard, Coca-Cola’s decision making involves different people in different places. There is a difference in developing a plan for a single country as compared to that of multiple countries.
This affects the company’s decision making because it has to decide on the products and services that a company will sell, where and how to make those products and services, where and how it will sell them, how to acquire resources, and how to outperform the global competitive market.
This helps to organize and ensure quality in their products. It is able to cope with change due to government’s policy, barriers and ban, political state of affairs as well as economic state. It is able to know internal and external environmental power and the opportunities available while identifying weaknesses and threats.
Managing New Markets
Waters (2000) affirms that Coca-Cola has been able to expand into new markets while protecting its core brands. It has come up with strategy formulation and implementation which has helped the company to assess its activities to ensure quality. Additionally, the company has to deal with change government policy and threats to maintain to new market segment.
After entering the new market the company assesses the weaknesses and threats of the target market while trying to achieve strategic goals. It has used these strategies for entry into new markets: adaptation and conformity approach, low-price approach, security plan, product adaptation policy, and technical innovation plan.
For marketers, culture is very difficult to understand because one may violate others’ cultural norms without their knowledge. People from dissimilar cultures may feel uncomfortable in the presence of one another. For example, people in countries like the US can walk half-naked while others in the Arab countries or Muslims culture cover their bodies and thus, the company surveys their marketing targets before entry.
The company creates a good working environment by first understanding different people with different cultures. Working with diverse people with different talents and ideas helps in easy distribution of products to countries and communities with different ethnicities. The company has embraced multicultural world, both in the market place and workplace, which is critical to long term sustainability.
They also do surveys with diversity programs where issues affecting those groups are solved. Cross-cultural market research is done in two ways: primary research – where a company conducts surveys, interviews and observations of the target group; and secondary research – the firm gets information gathered by someone else (Luthans & Doh, 2009).
The company understands economic interdependence with cross-border movements of services, goods, and technology. Economic globalization increases economic combination between countries which makes the world appear as one market.
Coca-cola has distributed its goods and services all over the world and hence, economies that are developed are incorporated with the less developed through direct foreign investment and cutback of trade.
However, Coca-cola is affected by political factors which are the limit to globalization. Countries with great nationalists and militarism hinder international trade.
The coca-cola company understands and deals with many governments, currencies, political and legal systems, and multicultural societies. There are cases where the government and public health officials raised concern for carbonated drinks which they believed caused obesity. This affected the demand for these drinks, but the company later produced diet cokes which are not carbonated.
In some countries, the governments claims that the coca-cola has led to water scarcity with pollution, but it has come up with water conservation programs, especially in countries like India where they have come up with devices for collecting rain water. Changes in government laws and regulations in the US about non-refillable containers have affected the company. The non refillable containers are highly tax compared to refillables and so the company has minimized the no of non refillable containers.
Coca-Cola Company has long become globally known and has greatly improved from selling a few servings of beverages in a pharmacy to international global markets. It has achieved its goals due to dedicated transnational workforce with the aim of attaining high quality products.
The company is appreciated worldwide and this has led to its spread in over 200 countries. In addition Coke deals with changing social values in developing its marketing strategy, which has given it a competitive advantage. In essence, Coca-Cola has developed aspects that enable it to run a global enterprise which refreshes people worldwide.
Korey G. (2003). Multilateral Perspectives in international Marketing Dynamics. European Journal of Marketing, 20(7), 34-42.
Luthans, R. M. & Doh, J. P. (2009). International Management: Culture, Strategy, and Behavior (7th ed.). New York: McGraw-Hill.
Punima, B. (2000). Cultural and Critique and the Global Corporation. Indiana: Indiana University Press.
Waters, P. (2000) Coca-Cola: An illustrated History. Garden city, New York: Double Day & Company.