Expansion Strategies of Coca Cola - Thesis Proposal Example

Entry into foreign market affiliation) TABLE OF CONTENTS Tittle ……………………………………………..3 2. Background……………………………………....3 3. Preliminary review of the literature……………...4 4. Research Questions and objectives………………7 5. Methodology and research methods……………..8 6. Ethical considerations……………………………9 7. Planning and resources required………………..10 1. Entry into foreign market This is an organizational case study dissertation. It dwells on foreign direct investment. Foreign Direct Investment FDI is an organizational venture where a firm extends its operation to another country, aiming at diversifying the target clientele and broadening its operations. The operations policies employed in the new country are a policy merge from those in operation in the parent country, and the allocated state policies in the new target country. In a scenario where the operations of the firm contradict with the state policies of the state, the firm’s operational protocols are reexamined before employed. 2. Background This paper demonstrates the process of entry into foreign markets, the considerations to be made in decision making, the challenges involved, and the applicable organizational models that can be employed. For a better description, the paper analyses a case of a consumer product firm Coca Cola. It addresses the problems she faces on her efforts to venture into a foreign direct investment, the managerial decisions to be made, the organizational models to be used, as well as the decision making models most appropriate for the firm. Coca Cola targets its foreign direct investment in a country in Asia, the People’s Republic of China. Coca Cola must consider the institutional context of its target foreign country China. The institutional framework translates to political organizations, economic and social-cultural setting. Coca-Cola in China was selected as a case study for a number of reasons. First, Coca-Cola is the largest cocoa producer in the world and one of the largest multinational companies. Coca Cola gets competition from its closest competitor, Pepsi-Cola, and unknown environment and versatile local market, the ability of Coca-Cola, experience and success in capturing a large market share in China seem to be an interesting Cases in which consequences can be drawn for the understanding of the market multinationals Entry in the developing countries by creating an equity joint venture (EJV). Based on a case study of the bottling plant of Coca-Cola Tianjin, Nolan (1995) conducted the first comprehensive analysis of the macroeconomic effects work by Coca-Cola in China. He found out that the company Coca-Cola System General has positive effects on the development of labor markets, capital and products in China.  They believe that the economic multiplier effects of the investments of Coca-Cola and Power operation. China produced a total of approximately 414 000 jobs, 21.7 billion Yuan in output and 1.2 billion Yuan tax payment in 1998. Coca Cola operates in more than 100 countries through various contractual agreements. Coca Cola operates using an organizational and product line program aligned with the global upstream to the downstream movement of resources market segments. Eleven operating divisions, each with its own dedicated suite of product brands run through 3 operating groups. This arrangement makes management control systems include both formal and informal ways to ensure managers’ decisions align with an organization’s strategy. Preliminary review of the literature Through the analysis of foreign direct investment in services in a regional context, we must especially pay attention to the geographical distribution of FDI among neighboring countries, especially among the member countries of a regional agreement. While some literature suggests that the formation of regional agreements increases the flow of foreign direct investment in the region, the question of the member countries of a regional agreement receives more foreign direct investment from outside and when distributions are "zero-sum" are not sufficiently investigated (Senker & Foy 2012). Although these results are interesting, this study shows three borders. First, the empirical debate on the geographical distribution of FDI in Asia is focused attracted little attention at the expense of other Asian countries, while competition for FDI between countries, ASEAN has direct investment opportunity in the PRC. The reason, perhaps, is the premise that the ASEAN economies would be longer because of the connections between its networks of production and additional therefore foreign direct investment in ASEAN countries has a positive effect automatically on foreign direct investment in other ASEAN countries, with especially manufacture. It is also very plausible that ASEAN countries actually in competition for foreign direct investment to some degree, especially in the service sector. Second, most studies focus on aggregate IDE or processing, and conclude that foreign direct investment in ASEAN and China are truly free. However, FDI determinants services may vary from IDE manufacturing. An interesting result of Eichengreen and Tong (2007) is that the determinants of FDI difference between manufacturing and services. With disaggregated data, they argue that the correlation between foreign direct investment from China in the Peoples Republic of China and ASEAN is not high in the case of several service industries. This means that in the case of certain services sectors, the determinants of FDI from China to China and ASEAN are independent. The nature of the geographical distribution of FDI in services could otherwise than foreign direct investment in the manufacturing sector to be (Senker & Foy 2012). Thirdly, the important question of how participation in investment agreements Regional Services receives a relatively large amount of foreign direct investment from outside the region countries is not yet sufficiently analyzed in the literature. Recent studies identified a positive correlation between investment agreements in the region and foreign direct investment in a region of a country outside the region as well as a positive correlation between investment agreements and currents bilateral investment between members (Velde and Bezemer 2005 for the first and Salacuse and Sullivan 2005 Tobin and Roses Ackerman 2002 for the latter). Through the analysis of foreign direct investment in Asia, keep in mind that the Asian region is full of agreements on investment issues. Trade and investment in services have been and are substantially liberalized ASEAN in some areas in the coming years. In addition, trade in services and investment between China and the ASEAN countries under their bilateral economic partnership agreements (EPAs) to liberalize China, but in varying degrees and at different speeds. This can lead to complications make the investment policy decisions. On geographical aspects of Chinaese companies It is advantageous to provide a brief overview of the studies at the industry level on the determinants of FDI, but they are very limited. Most of the literature focuses on the determinants of FDI in the financial sector. These studies suggest that the size of the market and manufacturing FDI are important determinants of foreign direct investment in financial services (Yamori 1998 Moshirian 1997). Book (1999) evaluated the importance of liberal regulatory regime for foreign direct investment in the financial sectors and found the correlation positive. However, it should be noted that the regulatory system treated as a categorical variable (for example, if a country is a member of a regional agreement) without qualitative assessment of the rules and obligations are real. China was one of 144 states to endorse the Indigenous Peoples declaration rights of 2007. Effective implementation of this human rights instrument significantly increases the situation for indigenous people in China. Coca Cola should cooperate and consult in true faith with the local people in order to get Free and Prior Informed Consent before obtaining the project ‘approval. Coca Cola must strongly recommend that Indigenous people possess their rights to retain their lands or territories. This agreement is one-step forward in recognizing their crucial contribution to the environment, and with it, their livelihoods. Let go. Companies entering this phase of the transition, when submitting their first change, often identifies with the resistance and the emotional upheaval, because people are forced to let go of something, that you are comfortable with. At this point, people may feel emotion. They need to accept that something is complete before you can begin to accept the new idea. If the emotions, people will leave, recognize, you will probably resistance throughout the change process. It is important to take resistance people and understand their feelings. In these conversations, make sure you listen empathetic and communicate openly about what happened. Put emphasis on their skills to apply knowledge and experience, once you have implemented the change will be able to love people. Say you; you give them you need to work effectively in the new. Research questions and objectives The management research question hierarchy is a method for management personnel to analyze a situation with questions so as to figure out how best to act. This paper develops a model of six steps. The steps aims at addressing the following research questions and objectives. QUESTIONS • How do foreign investors invest into China? • How successful are foreign soft drinks company companies in China and why? • What is the Prospects of FDI policy in China for the Future? • What can be done to improve the investment strategy of foreign investors China? • What can be done to improve the FDI Policy for attraction of FDI? OBJECTIVES a) To critically evaluate China’s market environment as an FDI target b) To analyse the interest company status for FDI c) To judge the current strategies used by the company for FDI d) To recommend employable actions for FDI venture The first step is identifying the management dilemma. The question here is; what symptoms cause management concern? For this scenario, the management concern is the outcome of the two possibilities, and which cause of action would favor the firm best. It deals with the environmental stimuli that raise management interest. The stimuli here are the need to increase the number of sales for the firm. The second step is the management question. How can the management eliminate the negative symptoms? How can one fully capitalize an opportunity on management? It is never easy to choose which, amongst the two are the negative symptoms, either of the available options after all have their pros and cons. The management, which in this case refers to the human resource manager, can choose amongst the two and frame one of the choices to be the negative symptom. The third step is the research questions. What plausible cause of action is available to manage to solve the problem? In this scenario, opportunity cost applies (expansion strategies, 2015). Here, the management foregoes the advantages that one of the options provides, so as to enjoy the other. Even though employing more new staff would mean more and better product promotion through increased channels of advertisement while selling, the management may opt to choose on increasing the number of hours and forfeit the advantages, so as to hit the main target, which is to achieve the increment of sales within a short period. The fourth step is the investigative question. In this case, the dilemma is already stipulated, and the manager knows what there is to choose from and the possible outcomes, as well as what the outcomes interpret. The fifth step is the measurement question. What should be observed or asked to obtain the information that the manager needs? This question narrows down to the driving factor or the motivating factor that causes the dilemma. In this case, it is the need to increase sales. If the motivation to action is not strong enough, a no action bears more fruits in such an instance than taking either of the solution possibilities. The sixth and the last step are the management decision. After consideration of the stipulations of the steps above, the management can finally make a decision. The dilemma above may be solved by integrating both the options. Since the firms target is to increase the sales, increasing the number of hours would be used to maintain high sales in the short term, and increasing the number of employees would stretch the range of sales which would still help. This would require to be done within the resource availability of the firm since one of the shortcomings of the decision would be increased cost of production for the firm. Methodology and research methods This article analyzes the recent development of events for Chinas direct investment in services in the angular range of regional integration investment plans. The document deals specifically with the question of which receive ASEAN FDI services in China. The paper focuses on the shift phenomenon Singapore recently in the Chinese company to see the Services in South Asia. In many service industries, Chinese companies concentrate their investments in Singapore between ASEAN economies. This study examines the importance of Singapore offset in each service sector, and why such a change occurs in branch-specific services and not in other service industries. First, to assess the situation of foreign direct investment from China Services in ASEAN, we will analyze not only the investment data, but also the behavior of actual companies and to determine whether that observed in the data is in accordance with the investment policy enterprise level. Simply, the analysis of the investment is not enough data to determine whether the Shift Singapore occurred (Senker & Foy 2012). Enterprise level isolated examples in every industry are needed in order to understand what exactly happened in Asia in terms of investment flows. Secondly, considering the possible factors to explain the shift from Singapore requires careful qualitative analysis. IDE services must be examined, taking full account of the new environment of regional integration in Asia. ASEAN has completed a regional investment contract and at the same time each ASEAN countries concerned (as an individual part) in an investment agreement with China. But with simple governance indicators as a proxy for the investment environment or change in the legal status in binary variables is not recommended. Detailed qualitative analysis of the situation and regulatory services obligations of each country is required in every service contract in the subsector. In summary, this paper attempts to make a sketch of the recent growth in foreign direct investment from China services in ASEAN investment of available data and anecdotal examples of corporate level, leading these changes of the factors in the development of regulations under economic agreements qualitative way connected. Ethical consideration One challenge for a company to entering into a foreign market is culture. Coca Cola must carefully review China culture because it deals with a group’s design of life and it is pertinent to the study of international marketing. Therefore, culture is vital to the marketing concept, which bases on satisfaction of wants and needs of potential buyers. Culture has also impacted on needs and wants. If they are to function effectively, they have to be accepted in the related cultural market (Baldwin & Ottaviano 1998). We can say that culture is extremely beneficial in all marketing activities, such as pricing, promotion, and packaging. Coca Cola must know what China has gone through for the past decade, Southeast Asian nation of 50 million people that have lived in poverty during decades of military rule. Now, with a new president and the hopes of more freedom, economic and political relationship to the world, China aspect is looking viable (Dunning, 2002). China is of Buddhist culture. At universities in China, the number of female registered equals that of male. If family members do not live in a confined house, they usually live close to one another and often visit. Children learn to share and take part in the family life at an early age. Children take part in all social occasions; they usually are in charge of small errands for adults and also help out in the fields. Planning and resources required A recommendation of a corporate policy for resolving the issues that face the firm is the above used management question hierarchy model. The recommendation bases on well-reasoned analyses of the model, its critical stages that break down a problem into finite sections and avoiding generalizations. The recommendation is a policy that resolves the ethical dilemma and is possible to communicate the position of the organization. The potential limitation of the policy and strategies for monitoring and compliance, however, is that the model is not one click solution to all problems, but it is a guide to help solve a problem, hence a different problem would require management to go through the same steps procedure. The neutral zone: At this point, those who have confused often affected by change are uncertain and impatient. To function, also learn how well you can manage change, get used to a workload higher, as new systems and new methods of work. Change skepticism about the initiative. Nevertheless, this phase may be also a great creativity, innovation, and renewal. This is a good time to encourage people to do this, new ways of thinking or work to try. Seniors in the second phase play an important role. Their tips are extremely important, because people undergo this neutral phase. The bridge transition model is similar to the curve, feelings change, insofar as it pointed out; people go through during the change (expansion strategies 2015). The two models are not suitable for people to lead assistance through change, and they fit well. While the model may help bring people through the change more effectively, it is not a substitute for the management tools of model. The model shows the difference between change and transition. The change occurs. Transition, as it is internally: this is what happens in the head if they are presented with the change. One can use the model to understand how people feel, as you guide them into change. Bibliography Baldwin, R., & Ottaviano, G 1998, Multiproduct multinationals and reciprocal FDI are dumping. Cambridge, MA: National Bureau of Economic Research. Expansion Strategies 2015, [online] Available at: http://www.coca cola.com [Accessed 23 Apr. 2015]. Registration policies, state foreign investors registration department, 2013, Accessed: 22nd April 2015, Source: from: http://www.gov.uk/government/.../companies-house Senker, C., & Foy, D 2012, Coca Cola: The story behind the iconic business. London: Wayland. Read More