International Business - Coca-Cola Company - Case Study Example

Running Head: International Business Name Institution Course Tutor Date International Business International business is a commercial transaction ranging from sales, freight, transportation and investments both private and governmental that takes place between two or more politically different jurisdictions (Daniels, Radebaugh, and Villarreal, 2007). Globalization of trade is a necessary move in the business world since a political region cannot be able to satisfy its’ consumes in terms of quality and quantity thus the emergence of multinational companies (Joshi, and Mohan, 2009). With the emergence of these companies is the growth of positive competition, advanced technology, improved product and service quality, reduced cost of commodities and other economic factors. According to Naresh, and Khatri, (1998), the globalization of trade also has social impacts due to the interaction of diverse people that lead to adoption of new ways of life and behavior, finally politically since with the exchange of trade between different political jurisdiction comes the need to exchange political practices and even the growth of business partnerships between political organizations. All these affects the operations and the day today running of multinational companies. The Coca-Cola Company The Coca-Cola Company is a world leader in beverage production with a presence in more than two hundred countries in different regions of the world, producing about 500 brands of sparkling and still beverages and according to Bell, (2004), the company is well known for the best soft drink in the world. The drink had no bubbles when it entered into the markets of the United States. The corporation has been enormously fruitful over the last century and has become a representation of American culture. According to bell, Coca Cola is not and has never been involved in any of the processes that ensures the products end in the hands of the consumers around the globe. According to the information obtained from the company’s website, the coca cola decided to enter into partnership with other established firms such as the bottlers companies around the globe. The work of the company is to manufacture and sell syrups, beverage bases, and concentrates to the bottling operations, and it owns the coca cola brand and at the same time accountable for consumer product promotion initiatives. According to Luthans, and Doh, (2015), the coca cola company bottling partners’ main work is to manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell the products produced by the coca cola company. The Coca-Cola Company is worth 20-billion dollar brands including, Fanta, sprite, Coca-Cola zero, Minute maid, Dasani just to mention but a few (Naresh, and Khatri, 1998). The company is a good case study when it comes to multinational companies since it is a trendsetter in its distribution system evident in the rate of 1.9 billion purchases in a day. This essay will discuss the behavior, operations and the management system, challenges the company is facing with respect to international business and the strategies of the Coca-Cola Company. Discussion The Coca-Cola Company is the epitome of globalization of commerce having started in the late 19th century in the USA, it began during times when the world was beginning to depend on each other for commodities like the European powers venturing into Africa for agricultural products. The trade between the Arabs and the British, this was due to the increasing population which led to the increase in demand for products (Joshi, and Mohan, 2009). The globalization of trade has had many impacts on the way trade used to be done, for this reason the Coca-Cola Company has made several strategies to benefit the communities it has and is planning to venture into in future (Joshi, and Mohan, 2009). Competence. Coca cola as a business company ensures competence amongst its employees, this is done by qualitative and quantitative and qualitative analysis for the contributions of employees in business from the time of employment this is the hiring of competent employees and keeping them in check. The biggest task of the company in new markets is marketing which is done through the media, promotions and supporting the local communities. Organizational structure. The organizational structure of the Coca-Cola Company is simple but is effective in running the vast employees, this is achievable by making the structures ethnocentric i.e. the local and international structures are similar in nature. This behavioral trait however does not change the quality and the composition of product people will enjoy in different parts of the world. The company closely supervises production from the head office Mussa, and Michael, 2000). From the table it is evident that Coca-Cola Company is divided into Eurasia and Africa Group Europe Group Latin America Group North America Group Pacific Group All these have similar structures that run independently. In some instances different regions come up with their own recipes that have a social connection with the people and utilizes the locally produced materials. Some are also as a result of partnership with other companies. Products like these are available in regions of their innovation like Ameyal of Mexico, Ade’s drinking water available in Indonesia. Alhambra water in the United States of America. Amita available in Greece. Andina calcio, Andina frut, Andina hi c, Andina nectar available in Chile. Apollinaris available in Germany, Appletizer available in Germany, Aquaboner and Aquactive available in Spain, Aquaner in Belgium Luxembourg and Netherlands. These are a few examples of the very many products of coca cola that show how much the coca cola is a leader in the beverage industry. According to Daniels, Radebaugh, and Villarreal, (2007), international trade as a whole is run and supervised by international companies that regulate trade and tariffs worldwide, they include World Trade Organization, United Nations, Master Inspector Certification Board for Certified Master Inspector, Federation of International Trade associations and other regional organizations that regulate trade in their areas of jurisdiction, they regulate charges on imported goods and ensure multinational companies set aside a number of jobs for locals both unskilled and skilled labor, they also champion for human rights in terms of child labor, injured employee compensation, rates of buying land from locals and so many more. The Coca-Cola Company has ensured that it has complied by all these are requirements in fact it goes a notch higher by empowering the communities it has established grounds of business (Luthans, and Doh, 2015). Coca-Cola launched Live Positively which is a sustainability framework in the year 2007, it is embedded in the system at all ranks, from production to packaging and marketing to retail. The Group’s Corporate Social Responsibility policy Live positively established seven main areas where the company sets itself goals to rally the business’ sustainability drill. These main areas are beverage profits, healthy and active living, the community, climate and energy, sustainable packaging, water stewardship and safe and conducive workplace environment. To regulate issues of competition and to curb corruption among employees; Coca-Cola has set a code of Business Conduct. (Kim, and Hwang, 1992). The company has implemented international Corporate Social Responsibility guidelines such as Global Compact and the Ruggie’s Protect, Respect and Remedy Framework called Ruggie’s Framework, however, these guidelines do not seem to be incorporated into the Code of Business. However, these Corporate Social Responsibility initiatives are part of other undertakings and policies of the company. For example, the United Nations Global Compact principles are cited in the company’s yearly Sustainability Reviews and Ruggie’s Framework is partially adopted in the company’s Human Right Statement. After the Indian incident, in the year 2007 Coca-Cola liaised with the World Wildlife Fund and became a member of the CEO Water Mandate, as the Coca-Cola Company has prioritized water. Coca-Cola publishes a directors’ report denominated ‘The Coca-Cola Company Annual Report’ annually. It covers the undertakings of the previous financial year. In this report a small section is dedicated to Community Social Responsibility is set aside and it includes a brief description of the community development initiatives and water conservation that the company has adopted. Since the year 2001, Coca-Cola also publishes a different report dedicated to Community Social Responsibility called The Coca-Cola Company Sustainability Review annually. These reviews, which are published after every two years, are counter-checked and assured by a third party, the sustainability rating firm FIRA Sustainability Ltd. This verification provides above average assurance on the reliability of the information Coca-Cola reports. Both reports, the yearly company review and the sustainability reports – are explained based on the Global Reporting Initiative G3 guidelines, which in 2001 were adopted by the company. Because of its relevance to Coca-Cola’s business, Global Reporting Initiative also reports on the progress of the water stewardship program’s objectives annually. Through partnerships between Coca-Cola and organizations like Technoserve, Bill and Melinda Gates Foundation, UN Women and International finance corporation the company aims at reaching out to women entrepreneurs from all levels of its value chain to address challenges women in business face and provide help in form of monetary support, mentorship and commerce training skills (Okolo, 2008). This program is called 5by20 and aims at empowering 5 million women in business by 2020. The Coca-Cola scholars’ foundation has sponsored more than 5,000 students so far and is still counting. This program aims at supporting outstanding student with leadership skills and provides mentorship to these students. This is a good way of giving back to the society. Strategic approach and competitive benefits The Coca Cola Corporation is well known for its advertising expertise and the corporation has always followed a great promotion policy that is accountable for bringing the success to the corporation for over a century now. The major approach of Coca-Cola is its brand, according to Luthans, and Doh, (2015). The company had to put in a lot of effort and a well calculated policy to come up with the extensively known product. Apart from this, the Coca-Cola Company has been making use of various strategies that have played a major role in ensuring the company achieves competitive benefit through the use of calculated competencies. These policies comprise of: Marketing and branding policy: Luthans, and Doh, (2015), describes a brand as a potential of gratification and emphasis that good labelling reinforces status, generates loyalty and guarantee quality. There are very few companies around the globe that have managed to come up with a brand which is popular and strong as the Coca-Cola Corporation did. The Coca-Cola Corporation made use of its promotion resources to come up with a product that is now known worldwide and has become the major competitive gain for the corporation. Coca-Cola’s glocal policy: the company made use of its organizational competence to embrace a glocal policy – using a mixture of both local and central promotion functions in order to accomplish a maximum promotion and supply efficiency. Using this, the corporation upholds the strong international product while introducing the local fundamentals in the promotion to ensure that the brand image is in agreement with the local culture. New Brand Introduction: The Coca-Cola Corporation follows out to in style while creating new merchandises. Coca-Cola ever since its inception has always favored taking note of client favorites and scheming its merchandises as per their requirements, instead of taking an internal approach. Conclusion From the essay above it is evident that the Coca-Cola Company is a trend setter in the world if international trade its strategic plan for the immediate future is one that will see it penetrate the furthest markets in the world and empower the communities as it makes profits from business. This shows how much globalization of commerce is inevitable. References Daniels, J., Radebaugh, L., Villarreal, D., (2007). International Business: environment and operations, 11th edition. Prentice Hall. Joshi, R., Mohan, M., (2009). International Business. Oxford University Press Kim, W., Hwang, P., (1992). Global Strategy and Multinationals entry mode Choice. Journalof international Business studies Luthans, F., Doh, J., (2015). International Management: Culture, Strategy, and Behavior, 9th edition. 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