Coca- Cola Company is the world leading manufacturer, distributor, and marketer of soft drinks. It was established after Coca-Cola invention on May 1886 by Dr. Pemberton. This company manufactures about 4000 products and 400 brands using tea, coffee, water, energy drinks, juices and much more.
The company’s corporate center of operations is in Atlanta with local operations in more than 200 countries around the world. Only 30 percent of its income comes from within the United States with estimated brand equity of 84 billion dollars relating to more than 50 market share of the global beverage industry.
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The major focus of the Coca-Cola Company is employees’ empowerment and teamwork. The reason for focusing on teamwork is globalization and local level operation
Foreign entry methods applied by Coca-Cola Company
Every company looks for opportunities in foreign countries, and finding a convenient entry mode is a complicated task. Various organizations select different entry modes so as to control their overseas operations with tactical decision making. The chosen entry modes should be compatible with the culture and constitution of the concerned country. There are different entry modes for exploring international market; these include licensing, exporting, acquisition, joint ventures, alliance, franchising and global partnership.
Coca-Cola Company entered into the world market using different methods of entry. Commonly used strategies are licensing, exporting and franchising (Hill 2009).The following are some of the entry modes used:
Foreign direct investment
Foreign direct investment involves investment in manufacturing and service facilities in a foreign state with an aim of having efficient management. The largest investment in an international market is the direct method of operation where an investor develops local products with fair prices for raw materials and their output. This technique helps in developing good relationships with customers, local suppliers, and the government but there exist some disadvantages like a change of government and market fluctuations.
The first Coca-Cola bottling manufacturing factory was established in Beijing, China in the year 1981.Currently, there are about 35 bottling companies and 30 manufacturing factories in China. An approximate number of 35000 people are working in Coca-Cola Companies.
It is an agreement between business partners to work together with equity investment. Satisfying customers’ varying needs with various products is very beneficial to an organization, but it demands market partnership so as to enhance customers’ value. Two different companies form an alliance with an objective of supporting their sales channel, plan and implement cooperative promotion campaigns.
Coca- Cola and Lenovo businesses in China came together forming a partnership in marketing. They formed an alliance whereby Lenovo provided relevant technology to Coca-Cola. It also, helped in internet advertisement. As a result of this Coca-Cola is a well-known brand in China.
Joint ventures are the process where two or more organizations take part in business with certain degrees of ownership. Each partner contributes assets, but the risk is shared.
It is an important international strategy which is convenient before applying foreign direct investment. Most of the companies partner with a local one so as to help them in entering the new market. Usually, a local business with the large...