Coca Cola Companys Growth As A Multinational Corporations Business Essay

Coca Cola Companys Growth As A Multinational Corporations Business EssayMultinational Corporation (MNC) is one of type of emf flying in the human being nowadays. A corporation can be categorized as MNC if in that location be 20% to 50% or more than of its net profit from directs investment in one or more in foreign countries. (Iamsam, n.d) http//hubpages.com/hub/Multinational-Corporations-MNCs. MNC argon managed from one home country. With well- manage social organization and overdue short letter firm good performance, it able to expand its products and services to foreign country. The growth of multinational corporations is measured by Foreign Direct Investment (FDI). When business firm make an investment in a second nation, the investment is counted as part of the outward direct investment from the source country. FDI is an investment in foreign firms where the foreign investor owns at least ten percent of the ordinary shares.1.2. Coca-Cola Companys HistoryCoca-Cola is the largest manufacturer, distributor and market placeer of non-alcoholic drunkenness that establish by a pharmacist, Dr. John Stith Pemberton in Midtown Atlanta, Georgia in 1886 with Coca-Cola syrup.Druggist Asa Candler bought The Coca-Cola Company in 1891. Within four years it was available in all 50 states, Canada and Mexico. The Coca-Cola Company began building its globose network in the 1920s. When Asa Candler purchased the recipe and established the Coca-Cola Company, he begins one of the largest franchise in the world. The government expanded the community and make 64 plants overseas in 1929.At the beginning of the World War II, Coca-Cola was bottled in 44 countries. Today, The Coca-Cola Company operates in more than 200 countries, 2400 beverage products are provided worldwide with approximately 1.5 one thousand thousand serving rate each day. (http//www.just- wassails.com/market-research/the-coca-cola-company-swot-analysis_id92127.aspx)Coca-Cola Enterprises is the worlds largest marketer, producer and distributor of Coca-Cola products. Its operating in 46 U.S. states and Canada, they are the exclusive Coca-Cola bottler for all of Belgium, continental France, Great Britain, Luxembourg, Monaco and the Netherlands. Coca-Cola Enterprises manages a network of approximately 84,000 suppliers of goods and serveces ranging from large international companies to small local suppliers.Today, With E. Neville Isdell s firm commitment, Coca-Cola Company exact been revolute into sensitive century, recognized as the worlds most valuable discoloration. http//www.123 aidme.com/preview.asp?id=1642391.3. Management StructureA well structure company is important foundations of capital organization. Multinational Company is operating under International division structure. The international unit (parent company) control entire activities of subsidiary company. However, this division structure allows multinational companies to freely explore resources internationally b ased on geography, product or function. Figure 1 shows the outlook of international division structure.Figure 1 International surgical incision StructureCoca-Cola Company as a multinational company handles enormous capacity of business with well-organized structure. Coca-Cola has 5 operating geographically segmentation. There are coupled States, Latin America, atomic number 63an Community, Northeast Europe/Africa, and also Canada and PacificCoca-Cola Company allows their division to customizing marketing based on Geographic segmentation. For instance, they alter the sweetness of drink according to local taste.GlobalizationThe process of sphericalization has adverted on the worlds business operation which is mostly driven by the development of MNCs. fit in Macmillan Dictionary, term of globalization defines as concept a single economy and culture are developed as a result of proceed in technology which easier the communicatings between two corporation and globalization mostly influence by multinational companies toward economic, financial, trade and communication. Besides, the United Development course of study (1999) announces globalization is the most important integration of economy, political and cultural phenomenon across nation frontiers. (cited in Kiggundu 2002). Moses N.Kiggundu, 2002, Managing globalization in developing countries and transition economies Building Capacities for a Changing World, Praeger,Westport CTpage. 4 http//www.questia.com/read/101335345Globalization is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before- in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper that ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before.- Thomas FriedmanCoca-Cola is a business which truly international in sc ope by signifying 67% of total its total net income from non- USD source. http//books.google.com.my/books?id=akn1_k1rVMICdq=coke+income+from+non-US+sourcesource=gbs_nav standoffs_s (page 9-2)Impacts of Globalization1.) Establishment of international allianceshttp//books.google.com.my/books?id=3pTFN8IdRpkCdq=international+alliances+example+on+coca-colasource=gbs_navlinks_s (page 435)The establishment alliances or coalitions which link firms of the same industry based in different countries. MNCs commonly engage in international alliances such as pin ventures and licensing agreements with foreign firms. Coca-Cola formed global joint venture with many industries to strengthen its company buy launching new products. colligation developments allow Coca-Cola to leverage its beverage expertise in contact with certain technology areas key to our business, such as packaging, vending equipment, foundation equipment and water treatment. Historically, these joint developments have led to th e development and commercialisation of break by technologies for the beverage industry.Coca-Cola also engaged in licensing with companies that are affiliated with food or beverage company but not with companies that compete with Coca-Cola in the non-alcoholic beverage market segment. We do some licensing with suppliers to the beverage industry. Examples of these types of companies are various packaging and equipment suppliers to the beverage industry. We have also licensed with universities around the world where in that respect is a finicky expertise with an individual or group of professors or researchers. Coca-Cola has over 300 licensees who sell over $ 1 billion of licensed products each year. It is estimated that Coca-Cola generates over $ 70 million in royalty revenue and billions of incremental impressions from licensed products. Licensing agencies outside of North America which work with us are The Licensing Company in Europe and Redibra in Brazil. The manufacturing syst em also called The Coca-Cola System by Coca-Cola to license to distributors who can incorporate different world markets, resources, and technologies to maximize revenue.http//www.yet2.com/app/insight/insight/20010401_landgraffhttp//www.goldmarks.net/controvn_lic_exp.shtmlThese are the a few(prenominal) joint ventures for Coco-Cola which doing well and earned huge profit on it.Coca-Cola joint venture buys Philippine drink companySan Miguel, the Philippine food and beverage company, and its joint-venture retainer Coca-Cola agreed yesterday to pay 14 billion pesos ($269 million) for the Philippines second-largest soft drink company, Cosmos. The purchase, which defeated a bid by PepsiCo, will give the joint venture, Coca-Cola Bottlers Philippines, a 90 percent share of the Philippines $1-billion-a-year soft drink market. The deal was approved when Cosmoss majority owner, the RMF Corporation, agreed to accept a lower offer after San Miguel ascertained that some Cosmos equipment was bel ow Coca-Colas standards. Wayne Arnold (NYT)Joint venture between Coca-Cola and Nestle to tap rapidly growing beverage segmentshttp//www.nestle.com/MediaCenter/PressReleases/AllPressReleases/CocaColaJointVenture-30Jan01.htmCoca-Cola and Nestle Refreshments (CCNR) is their highly successful joint venture formed on 1991 which operates directly in 24 countries and enjoys a strong position in the ready-to-drink tea category. On 30Jan2001, CCNR rename as beverage Partners Worldwide (BPW) function as an entrepreneurial unit dedicated to tapping the growth potential of emerging beverage segments, actively expand into new beverage peculiarly ready-to-drink coffee, teas and beverages with a healthful positioning. BPW also focus on expanding its geographical with existing products include Nestea and Nescafe and new products inclusive of Tian Yu Di tea and Yang Guag tea businesses undertaking by Coca-Cola.Joint venture of Coca-Cola Company and Illycaffe Spahttp//www.thecoca-colacompany.com/pr esscenter/nr_20080327_tccc_and_illycaffe_joint_venture.htmlThey introducing three allowance ready-to-drink (RTD) espresso-based coffee products. The products areProducts DescriptionCaffe full-bodied character, real Italian chilled caffe. First ready-to-drink coffee to offer char (no milk) espresso-based coffee.Cappucino intense uplifting aromas of illy espresso, blended with milk and dark cacao.Latte Macchiato smooth fresh illy espresso experience, swirled with milk.The product will be available in stylish premium can to inveigle the consumer. The RTD first launch in 10 European countries including Austria, Croatia, Greece and the Ukraine as the firm aim of their joint venture.After 1 month, the additional countries in Asia, North America, Eurasia and the Pacific as the expansion of the sales and will be delivered through the Cola-Cola system. The highly profitable RTD coffee category globally is valued at just under $16 billion and has experienced several years of growth that is expected to continue. Globally (excluding Japan), the ready-to-drink coffee category has grown at an honest rate of 10.1 percent over the past five years.2.) Development and Improvement of engineering scienceThe improvement of the whole organization in order to address challenges or problems, for in line with the participation in globalization is the increase in the number of problems to be encountered. With this, it can be understood that along globalization is the inquire to develop, improve, innovate, and adopt new strategies and methods in relation to systems modification to enable adjustment to the changes and challenges being encountered by the organization. Modification and restructuring in the organization is needed because along with the companys intention to expand and widen its target market is the need for additional workforce and management processes and styles that would enable the company accommodate the increase in changes. Restructuring and remodeling of the com pany, thus, serves to be a good way of adjustment.Both the Friedmans definition and The Coca-ColaSystem as well discuss stress the importance of integration of markets and innovation of technology.Technology revolution can have important effects on the decisions taken by international business. The improved of technology can transform a firm to become a successful international business. With the current technology, innovation can be done by a firm to develop a new product which can attract the current consumers as well as the new buyers.In the case of health trend and changing taste of the consumers, Coca-Cola responded to this through innovation and change. The primary objectives of product innovation are to create value, to obtain a competitive advantage, and to achieve long-term success through the development and commercialization of new products and services (Sundbo and Fuglsang 2002).Innovation for Coca-Cola Company accomplished through development of new products. A range of products such as the Coca-Cola Zero, Enviga, nutrition Coke, Gold Peak,Cherry Coke, Diet Cherry Coke, Vanilla Coke, Coca-Cola with Lime, Coca-Cola with Lemon and opposite variants of Coke.Below shown some of the products with descriptionYear New Products Description2005 No-Calorie Drink(Coke Zero) The introduction of Coke Zero was make by the increasing consumer demands for healthier products. Coke Zero offers the same taste as Coca-Cola with no calories First launched in North America2006 Calorie importunate Tea(Enviga) This product is intended to complement healthy lifestyles. By drinking three cans of Enviga each day, consumers can burn an extra 60-100 calories daily. This innovative product is added with a powerful antioxidant EGCG that speeds up metabolism and increase energy use, especially when combined with caffeine.2006 Gold Peak A premium ready-to-drink iced tea. Its with homemade taste revives the everlasting flavour of classic, authentic iced tea.By introducing new products, Coca-Cola aims to strengthen its brand image as the home quality beverages. Besides, Coca-Cola fill the gaps between markets and its products. Coca-Cola Company innovate a range of new products including health concerned products to meet consumers demand that are health conscious.3.) Renewing Systems and StructuresThe organisational form of Coca Cola is the Entrepreneurial start-up which is the simplest structure. According to Mintzberg (1992) the structure is described as having a little or no techno structure at all, it only has few support staffers, restrained division of labour, borderline differentiation in the work place, and a limited hierarchy in management. The overall setting is informal because there are no strict rules and regulations pull out the punctuality and absenteeism. Moreover the behaviour within the organisation, particularly in the convenience store is not that formalised wherein it utilises minimal planning, training and liaison devices.After the come to of globalization, the new organization was formed in Coca-Cola business. As we can see in Hong Kong, it would be Machine Bureaucracy. According to Mintzberg, the machine bureaucracy is an organisational structure wherein there is a clear configuration of the design parameters wherein it consistently held up researches it includes specialised routinely operating procedures, formalised procedures in the centre of operations, propagation of rules and regulations, proliferation of formalised communication throughout the company, dependence on the functional basis for tasks wherein it needs group work, comparatively centralised power for decision-making, and a complexly detailed administrative structure with sharp differences between the line and staff. In this form of organisational structure Coca Cola will be able to monitor the efficiency of the performance of the workers because there would be standard procedures and more elaborate structure of management.4.) increase in competition among other firms in the same industryLast major impact of globalization is the increase in competition among other firms in the same industry. A global firm may be in a come apart position to compete with its global rival, as it can enhance its resources globally ( 2003). Being able to participate in its foreign target market makes the global firm more advanced and more developed compared to its rivals in the same industry, for it is able to meet the standards and demands of its foreign customers. From this perception, major suppliers and stakeholders would prefer the global firm to other firms.Due to the impact of globalization, there are some local brands compete with Coca-cola. For example, Big Cola C a brand in South and of import America and it act as a Fast-growing competitor to Coca-cola. Secondly, the Corsica Cola in French island of Corsica which is made by brewers of the local Pietra beer growing fast as Coca-cola also. Furthermore, Breizh Cola is available in the French region of Brittany. Because of the increasing in the competitors, The Coca-Cola Company forced to purchase its brand, a registration of Coca-Cola as their own brand mark in 1999.Globalization brings benefits to The Coca-Cola Company and it also led the company to compete with other big company which is in the same industry in whole world. Pepsi Company (PEP) the major competitor that most people familiar with. Usually, people will take Pepsi as their second choice, but in some certain markets, Pepsi outsells more than Coca-Cola. Another big competitor to Coca-cola is Dr Pepper Snapple Group (DPS). DPS starting its soft drinks business since 1885 and they compete in terms of the packaging, price, availability and so on.5.) Global ProductsCoca-Cola Company need to concern on the languages that they utilize while doing the advertising, promotion and so on. Respect to the consumer culture is an important things in order to attract them for purchasing the product. For exa mple, The Coca-Cola company has to change the logo and the description on their packaging from common English to Mandarin on Taiwan and China markets. this can help the company launch the product successfully by follow consumer mothers language in their countries.Coca-Cola company have to research on the most suitable nip on carbonated drinks that did suit the eastern countries like China and Taiwan. This had to be replaced by products such as Asian Tea and fermented milk drinks. This needed a lot of research and development to make sure that the relevant product can suit the market.The following are brief overviews of a few countries where Coca-Cola has used their strategies to help their drinks become globally sell.Year of FirstIntroduced Countries Detail on Coco-Cola Company1942 Argentina -On the first day the product hit the streets, seven 24-bottle cases were sold, add-on eighteen single 185 milliliter bottles.-By the end of 1943, sales in Argentina amounted to 300,000 cases using 20 distribution trucks.-Coca-Cola de Argentina S.A. sells around one thousand time more products annually than first year introduced.1927 Belgium -Belgium is among the worlds top 20 countries in terms of per capita consumption of Coca-Cola products.1933 France -Introduced in the Caf de lEurope in Paris.-Number one soft drink in France since 1966.-Its total sales have doubled in eight years.-Coca-Cola France has created more than 1000 jobs.-Invested more than 3 billion francs in France since 1989.-Today, French consumers drink an average 88 servings of Coca-Cola products each year.1927 Italy Currently employs approximately 3,000 people. Italian consumers drink an average of 100 servings of Coca-Cola products each year.-There are 12 bottling plants throughout the country, serving more than 500,000 retail outlets,-Producing a wide range of Coca-Cola products, including Fanta, Sprite, Nestea, Kinley Tonic Water, Beverly, Bonaqua and Minute Maid products.