Coca Cola - Competitive Advantage, Organizational Form, Stages Models of Internationalization - Example

International Business Report Plan: Coca Cola Name Institution Name Background and Reasons for Choosing Coca Cola Coca Cola is a company that was established in 1886 and still maintains some of its original ingredients including flavors (Coca Cola 2014). Coca Cola operates in more than 200 countries and the company has more than three thousand brands within its product portfolio. The company has continued developing and introducing products that fulfill and addresses competition in indefinable markets (Porter 2003). Therefore, apart from its core product Coke, Coca Cola produces other soft drinks that include juices and water (Coca Cola 2014). These products are strategized from Atlanta where the syrup for the Coke brand is produced. Generally, the following are the major reasons why Coca Cola Company has been chosen: It has presences in more than 200 countries across all the continents It has regional and local production agencies that addresses requirements of local and regional consumers Continuously diversify products and aims to produce additional products to fulfill the requirements of regional and local customers (West, Ford & Ibrahim 2010) Has a strong Corporate Social Responsibility model that adheres the consumers to the organizational vision and mission. The CSR program factors into consideration regional requirements and aim to satisfy these requirements based on the requirements of consumers (Coca Cola 2014) The quantity and quality of the products sold continuously increase and this may be associated to the strong brand equity Coca Cola has a large turnover and revenues continues to grow throughout Coca Cola has continued to increase its market share and has instituted strong strategies that counters competitor’s strategies Coca Cola’s Role in the Global Pattern of Trade Azevedo & Chaddad (2006) states Coca Cola’s products are supplied in most countries in the world. Moreover, the taste and quality of the products are the same across the world. Through its global nature of business, consumers can purchase a Coke brand in Russia that has a similar taste with a Coke bought in South Africa. Furthermore, Coca Cola has capitalized on the benefits of internationalization and has continued to do both product research and market research to understand the requirements of consumers from these regions. In addition, Coca Cola utilizes the information to formulate and implement strategies to ensure Coca Cola continues to increase market share. Comparative and Competitive Advantage as they apply to Coca Cola According to Signh, Jindal & Samim (2011), Coca Cola participates in numerous corporate social responsibilities that adheres the company to different stakeholders. For example, philanthropy and health are aimed towards the consumers while marketing are aimed at local agencies. In additional, Coca Cola branded drinks are available in numerous countries across the world creating stronger brand equity (Coca Cola 2014). New Trade Theory New Trade Theory incorporates numerous economic models that are aimed at equalizing and managing international trade (Drummond, Ensor & Ashford, 2010). It may include trade barriers and regulations with the aim of advancing regional or local industries. Such trade regulations affect the operation of an organization and might affect the way a business achieves its objectives and goals. Coca Cola also operate in such environment and faces numerous challenges but the approach of Coca Cola might reduce the challenges associated with new trade theory. The Coca Cola business model is provision of appropriate ingredients and allowing regional industries to produce the drink (Coca Cola 2014). Therefore, the business model allows development of local industries especially suppliers and therefore may not infringe local industries, rather, improve local industries operations. Theories of Foreign Direct Investment and the Eclectic Paradigm Girma & Gong (2008) defines FDI as direct investment to another country. Coca Cola formulate its ingredients in Atlanta and supplied to local countries whereby the final product is formulated. Coca Cola brings numerous benefits that are associated with FDI towards the success of any correct. Apart from job opportunities, Coca Cola creates an environment that allows multiplier effects. Ghemawat (2007) understands the importance of internationalization. Internationalization of business aims to increase the market share and also to create additional revenues for an organization. This supports and qualifies the factors and fundamentals associated with eclectic paradigm. Coca Cola Represent an Example of the Stages Models of Internationalization Coca Cola exemplifies the Stages Models of Internationalization (Lussier 2011). Some of the important features include understanding the domestic market before determining to pursue foreign markets, its followed by considering nearer geographic markets and those markets that share cultural factors and the companies usually employ traditional exports strategies but continues to improve with time (Evans & Wurster 2000). After understanding the market, an organization introduces subsidiaries and other product placement to increase the sales. For example, Coca Cola usually export its products but after understanding a given market, it incorporates and enters collaboration with regional companies to start producing the products (Ghemawat et al., 2001). For instance, Coca Cola distributes Coke ingredients from its head office and the regional companies convert these ingredients into Coke brand (Hagel & Brown 2001). This is only possible if Coca Cola appreciates the existence of the market and whether the market is profitable (Hill & Jones 2011). Moreover, Coca Cola manages most of its marketing strategies with input from regional offices. Therefore, Coca Cola creates a single marketing campaign that is applicable to numerous countries across the world (Coca Cola 2014). Coca Cola Organizational Form All the Coca Cola activities are managed from the headquarters. Some of the departments within the head quarters include marketing, marketing and research, administration, finance and strategic planning (West, Ford & Ibrahim 2010). These departments are also responsible for the North America region and the domestic market. In addition, there is the international division that also has different departments. It is then followed by area managers that represents different continents that are further organized into management of country subsidiary. The following chart provides a preview of organization structure of Coca Cola (Coca Cola 2014) Business Operations Analysis: Culture, Legal and Economic Systems Globalization has created an environment in which businesses can operate without conditions associated with geographical factors. In addition, the approach employed by Coca Cola does not present the real views of a multinational because most of the products are manufactured by local industries (Birkenmaier 2001). Advancement and development of economy means that more consumers can purchase the products because of increase in disposal income and dynamic changes within the society. These factors have also changed the cultural perspective (Hill, Jones & Schilling 2014). The culture or society may hinder the success of Coca Cola because consumers have started appreciating healthy lifestyles and Coca Cola has been associated with unhealthy lifestyles because of sugars in the beverages (Palepu & Healy 2007). Statistics and Secondary Data Analysis Coca Cola has been operating since 1886 and has a long history. Some of the data to be analyzed include presentation of some of their brand products across the world. This would be achieved through obtaining the information of Coca Cola website and other important publications (Kevin & Somu 1996). In addition, a table format would be used to determine the appropriate time when Coca Cola was exported or introduced into the five continents e.g. Europe, Asia, Africa, South America, and Australia. This analysis is attributed to the extensive markets and presence across the world. According to Coca Cola website, Coca Cola brands are available in more than 200 countries and there are about 3,500 Coca Cola brands in the world. The paper would also present example of these brands and regions (country wise) whereby the products can be obtained. Apart from market share and presence across the world, another important component is financial and monetary related factors (Baker & Hart, 2008). Statista website provides numerous information regarding a company. It discusses financial and market presence and share information. Financial and market share including other information would be obtained from the website and utilize to understand the impact of internationalization of Coca Cola activities and the strength of brand name (Coca Cola 2014). The strength of brand equity can be understood through reviewing competition and how the customers perceives and embraces Coca Cola products. Moreover, additional resources would be employed in sourcing secondary data that is important in discussing Coca Cola. The data obtained would be presented in different models based on the nature of the data. For example, the financial records and market share would be presented on a chart (Coca Cola 2014). Other information such as products and presences in different countries would be presented in table format. In addition, important information such as contribution to corporate social responsibility would be presented in the form of table (West, Ford & Ibrahim 2010). It is attributed to conditions and threats to multinationals operating in local environments. The use of multinationals of CRS adhere the local population to the company and hence ensures an organization continues to operate effectively. Proposed Plan/Structure Introduction This section introduces Coca Cola and provides a preview of Coca Cola in terms of market presence and some of its major products Background The section discusses background information about Coca Cola. The section highlights some of the important players within Coca Cola including the contributions of these persons. In addition, the section discusses the accomplishments of Coca Cola and some of the strategies employed to accomplish organizational requirements Internal Analysis The section discusses the internal capabilities of an organization. Porters Five Analysis would be employed to understand internal happenings within Coca Cola. The section would be divided into two parts: primary activities and support activities. Primary Activities Some of the information discussed includes inbound logistics, operations, outbound logistics, marketing and sales, and service. These are the primary activities that are important to the success of Coca Cola. Support Activities The discussions would be premised on procurement, human resource management, technological development and structure. These components are crucial in ensuring the core organizational businesses operate effectively. External Analysis Coca Cola is a multinational corporation that operates in different countries in the world. It is important to discuss the external environment with the help of PESTEL analysis. The PESTEL model incorporates political, economic, social/cultural, technological, environmental and legal factors. SWOT Analysis SWOT Analysis is used to analyze the internal climate of an organization and is utilized as a basis of making decisions. It presents information in terms of strength, weaknesses, opportunities and threats. Competitor Analysis The multinational corporation is analyzed to determine the level of competition and competitors. The major competitor would be Pepsi. In addition, the section discusses other competitors in understanding market dynamics. Moreover, Porter’s Five Forces tool is used to understand the nature of competition. Some of the factors discussed include intensity of rivalry, threat of substitutes, buyer bargaining power and supplier power. Globalization and Internationalization Globalization and internationalization incorporates numerous factors that affect Coca Cola in addressing its operations. For example, a review of international process would be discussed, the challenges that Coca Cola has experienced, strategies formulated and implemented in addressing these challenges, the use of CSR in winning and addressing the requirements of local market. Conclusion The section summaries that paper through illustrating internationalization from the perspective of Coca Cola References Azevedo, P, & Chaddad, F 2006, ‘Redesigning the Food Chain: Trade, Investment and Strategic Alliances in the Orange Juice Industry’, International Food and Agribusiness Management Review, vol. 9, no. 1. Retrieved from http://ifama.i4adev.com/files/20041106_Formatted.pdf Baker, M., & Hart, S. (2008). The marketing book, 6th Ed. London: Routledge Publishers Birkenmaier, J. (2001). The practice of generalist social work. New York, NY: Routledge. 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London, Cengage Learning Porter, M 2003, The competitive strategy: Techniques for analyzing industries and competitors, New York, Simon & Schuster Signh, H, Jindal, S, & Samim, S 2011, ‘Business Ethics: Relevance, Influence, Issues and Practices in International Business Scenario’, The First International Conference on Interdisciplinary Research and Development, 31 May - 1 June 2011, Thailand. Statista 2014, Statistics and Facts on the Coca Cola Company, Accessed September 10, 2014. Retrieved from http://www.statista.com/topics/1392/coca-cola-company/ West, D, Ford, J & Ibrahim, E 2010, Strategic marketing: Creating competitive advantage, Oxford, Oxford University Press Read More