The paper 'Coca-Cola Entry Strategy in China" is a good example of a marketing case study. Multinationals are always looking to expand to new markets through different strategies (Larimo 2007, p. 123). This is especially in terms of emerging markets and developing countries. Nonetheless, multinationals use different entry strategies in new and emerging markets such as acquisitions and mergers, joint ventures, franchising, as well as new start-ups. In this case, Coca-Cola is the largest cola manufacturer and one of the largest MNCs in the world (Mok, Xiudian & Yeung 2002, p.
39). The multinational entered the Chinese market in 1979 (Mok, Xiudian & Yeung 2002, p. 39). This has allowed the company to develop its market and achieve a high market share, becoming one of the successful businesses to enter the Chinese market. The following paper aims at analyzing the foreign operations of the Coca-Cola Corporation in the Chinese market. It will focus on the entry strategies used and the reasons behind their use as well as the cultural, economic, and political issues faced during its foreign operations. Entry Strategies China has the world’ s largest population that has already hit the 1 billion mark.
Moreover, the country has witnessed high economic growth rates over the past few decades making it a significant market with great potential for the world’ s MNCs including Coca-Cola. To accomplish unparalleled market accessibility, Coca-Cola used different entry strategies over three phases on their operations in China since 1979 (Mok, Xiudian & Yeung 2002, p. 44). Between 1979 and 1984, Coca-Cola relied on franchising by selling concentrate on Chinese-owned bottling companies (Mok, Xiudian & Yeung 2002, p. 45).
The Chinese local market agents in the beverage industry were fully responsible for Coca-Cola’ s production and distribution operations. The Chinese agents were unprincipled in running the bottling operations focusing on their bottom lines. This scenario limited Coca-Cola’ s expansion in terms of market share. The second phase of the firm’ s operations was between 1986 and 1982 where the company entered a joint venture by purchasing equity share in the bottling industry to minimize the influence of uncertainty and restrict the unprincipled behaviors in terms of the local partners (Mok, Xiudian & Yeung 2002, p.
Larimo, J 2007, Market Entry And Operational Decision Making In East-West Business Relationships, Binghamton, NY: International Business Press.
Mok, V, Xiudian, D, & Yeung, G 2002, 'An Internalization Approach to Joint Ventures: Coca-Cola in China', Asia Pacific Business Review, vol. 9, no. 1, pp. 39-58.