Globalization Coca Cola Essay Example

Globalization Coca Cola Essay Globalization describes the proliferate synthesis of the world’s economic, political, technological and socio-cultural systems through the liberalization of international trade and investment or the reduction of barriers to international trade such as tariffs, import quotas and other related import and export restrictions. Globalization has allowed a greater establishment of goods, services, wealth and society development throughout the world, however, its implications such as the unequal distributions of income and employment opportunities due to outsourcing methods to derive relative unit labour costs and the constant company and government power struggles is becoming an increasing cause for concern. Nevertheless, companies continue to expand and develop and take advantage of globalization, which is considered to be an historic trend and an inevitable evolution process. The Coca Cola Company is a prominent, American Multinational beverage company that constitutes its own product manufacturing, distributing and marketing efforts in over 200 countries worldwide. The company that is best known for its bellwether beverage, Coca Cola, was established as The Coca Cola Company in 1889 by Asa Candler and has presently, collaborated with approximately 300 bottling partners throughout the world. It offers 500 brands of products including of diet beverages, sports drinks, teas coffees and juices. 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When the Coca Cola syrup was created by pharmacist, John Pemberton in 1886, citizens of the United States were delighted and enthusiastic by the new product that was distributed from a cola fountain. As the demand for the product grew John sold the exclusive rights for the product to salesman, Asa Griggs Candler, who began developing the product as a brand. Asa Candler began to introduce Coca Cola throughout the United States by developing marketing strategies such as offering coupons and merchandise with the Coca Cola logo. This strategy soon made coca cola to be available and consumed in every state of the United States. Subsequently, because of the exceedingly increasing demand for the beverage new measures had to be established to distribute the product to reach all their customers. In the year 1894 coca cola was put into bottles that allowed the product portability. Large scale bottle manufacturing activities was then initiated after statistics had proven that the bottled coca cola sales surpassed the fountain sales. The new bottling innovation along with continuous marketing strategies took the company to the global stage and the coca cola beverage was now bottled in Cuba, Panama and Canada. The exclusive right to sell the product was then sold to lawyers, Benjamin F. Thomas and Joseph B. Whitehead whom had to please their exceedingly expanding consumer base as the company was now an international company. Globalization of Coca Cola’s operations allowed the organization to serve a greater variety of consumers that contributed to a great increase in demand however it also affected the company negatively as it also spurred competition. Joseph and Benjamin began implementing and delegating new methods to safeguard their product such as advertising to consumers to demand the authentic coca cola and to refuse substitutes. They also gave the coca cola beverage a new feature, they distributed the beverage in a contour glass bottle that can be recognized anywhere by consumers and this advancement brought new life to the company. The new design allowed the company to further expand globally. The company was also able to utilize outsourcing methods to achieve cheaper labour and machinery costs to enhance the company’s profitability. The company then began distributing its flagship product to Puerto Rico, France and other foreign countries. By the year 1900-1920 the Coca Cola Company had established about 1000 plants worldwide from only 2 plants initially. One can observe how the competitive forces and increasing demand, as a result of globalization, basically forced the company to become more innovative and creative subsequently resulting in better and reinforced marketing strategies as well as an new and more appealing and distinctive image for the product that positively impacted the profitability of the company. However if the company did not respond to the new pressures of the global environment they may have experienced a lesser demand for their product and lose competitive advantage due to the fact that fellow competitors would be given an opportunity to move in on their market share. This would have severely impacted the success of the companies in a negative way as the company would be losing customers thereby losing revenue and profits. So it can be said that a global business environment requires a company that must be able to survive susceptible changes. These susceptible changes are triggered because of the continuous change in consumer needs and wants that is mainly generated by advance the continuous progression of globalization. To survive these susceptible changes companies must consistently derive new innovations and new ideas to keep up with their constantly changing consumer needs. As the world began interconnecting more globally because of technological, political, educational and corporate advancement mainly because of social and cultural preferences beginning to become more similar, new doors began to open for the corporate world to strategize their global operations and recognition. In 1923 Robert Woodruff who was then the president of the company utilized the Olympic Games as an international foundation for the company. The company sponsored the United States team which allowed coca cola to further be recognized on highly publicized international stage. During this event, Robert Woodruff began to introduce new inventions, these inventions were the six pack carrier case, a vending machine and new fountain dispensers with a bell shaped glasses. The games assisted to spur new innovations within the global environment on a more recognized stage thereby further impacting the success and growth of the company. Again as globalization progressed changes in innovations were needed inorder to secure and expand market share, reinforce competitive advantage and please the changing demands of international consumers. Becoming an international company means that one would be serving an international market therefore consumers will have different preferences and with coca cola continuing to derive new methods to distribute their product in different ways consumers will now have a variety of ways to enjoy the product, subsequently this would allow more options for consumer to be pleased therefore attracting more customers and expanding market share. The Coca Cola Company continued to reinvent its marketing strategies to grasp international attention and appeal. They added a new shorter trademark name entitled ‘coke’ to the beverage. This new ‘name’ was responded to with mix reviews as some international bodies slammed the name because it was the same shortened name used for the illicit substance cocaine. Being a growing international success, the changes conducted by company would be more highlighted in the global spotlight due to organizations watchdogs and similar corporations, therefore a greater reaction would be accompanied by the change. In this case the reaction was a controversial one that can negatively affect the image of the company . Consumers were now hesitant to use the new ‘name’ nevertheless, coca cola responded to this matter by creating a young character entitled the ‘Sprite boy’ to promote the new trademark for the product, and even though the criticism pursued statistics have proven that the word ‘coke’ presently is one of the most popular words utilized in the English vocabulary today, so obviously the marketing tactics devised and implemented by the company was victorious. By devising this strategy consumers felt more comfortable with the change and therefore acknowledged the new innovation at ease. As the international success of the company expanded, Woodruff continued to use the arising global opportunities to his advantage. World War 2 had now commenced and Woodruff made the beverage available to all service people in uniform at a cheaper price this allowed the beverage to be purchased in massive amounts during the war which then allowed the company to the opportunity to create 64 additional bottling plants inorder to provide for United States military and service personnel in international countries. This laid the most important international foundation that increased the international market of the company. Most people got to experience their first taste of the beverage for the first time ever this led to business boom after the war for the company. When the war subsided the company capitalized on its new foundation by using advertisements that promoted coca cola as the beverage that can suit any lifestyle and that can bring happiness to one’s life and relieve post war stress. This once again led to a desire for more innovative measures to be established to distribute its product to its consumers and as a result this led to the invention of the ‘coke in cans’. Coke in cans further extended the company’s market share and with the company’s global success progressing substantially, more coca cola manufacturing plants were established in other foreign countries. Globalization also allowed more varied beverage manufacturing companies to penetrate the beverage market. Consumers therefore developed a need for a variety of beverages such as juices, coffees, teas, sports and health drinks etc. This new demand was necessitated by new companies who influenced the desires of the customers by creating further beverage innovations. Coke therefore decided to develop other brands and types of beverages besides its bellwether beverage to reinforce its competitiveness and increase its consumer base in the beverage manufacturing market. The company began producing a carbonated beverage called Sprite, a diet drink called Tab and a coffee entitled Georgia Coffee Original. These new products allowed the enterprise to establish plants in China. The company was the first company ever permitted to sell packaged cold drinks in China bringing the total number of countries that Coca Cola distributes its products to 163. In the 1980’s the CEO of coca cola decided to further strategize the operations of the company in order to improve and extend its operations in a methodology that would increase profitability by organizing the various United States bottling organizations into a public company entitled Coca Cola Enterprises international. The company also introduced another successful beverage on the market, ‘diet coke’ to appease the needs of health conscious consumers. With globalization becoming more persistent throughout years, Coca Cola Company decided to reconstruct the taste of its product coca cola to establish a competitive advantage. Consumers responded to this change negatively and the company had to revert to its original recipe. However its success was not halted as the company continued to collaborate with more international sporting events such as the Fifa World Cup and the Rugby World Cup. The company also started producing other beverages such as Powerade sports drink, Vitamin Water, Fanta and Dasani bottled water. The company also bought the popular juice manufacturing company, Minute Maid and extended its product line. Proceeding into the early 2000’s coke began to experience severe global backlashes. The ingredients utilized in the company’s product recipe became a major concern to consumers, mainly the high fructose corn syrup, as researchers linked lifestyle diseases such as diabetes, dental erosion, strokes, hypertension and osteoporosis to the prolong use of coke’s products. Activists also accused coke’s products of being addictive because of the level of caffeine and other chemicals utilized in the recipe along with the aggressive marketing strategies, researchers even linked the advertisement schedule of the company to the cause for the increase in child obesity. The advertisements for the organizations Vitamin Water product was lso slammed as being misleading as the recipe utilized for the product was not at all healthy. The increase of health conscious behavior was as a result of globalization. Despite coke having substantial experience with the susceptible changing global environment the company failed to establish efforts to appease the demands of t he ‘new’ health conscious era of consumers that ultimately led to this backlash. Consumers were also becoming more environmentally friendly and coke’s damaging environmental impacts such as the polluting of the atmosphere and destruction of agriculture became more prominent to the public eye. The enterprise responded to this new change in consumer behavior by establishing plastic, semi recycled bottles and utilizing transportation that was less destructive to the atmosphere. Coke already had formatted and practiced glass recycling that cut the company’s production costs but this practice only became recognized during this era. It is therefore understood, that with the cultural changes of consumer behaviors that consumers expect corporate establishments to also care about what they proclaim to be morally right. One consumer behavior also initiates a progressive change among society causing the society to adapt and expect the same care to be considered and assisted by corporations whom they purchase from. So businesses must take the concerns of customers into consideration to fully please their consumers. Allegations have also surfaced of questionable, practices constituted by the company. The company was believed to have been involved in a series of assassinations of trade union advocates. It is alleged that paramilitary personnel were hired by Coke to reprimand the advocates which ultimately resulted in their deaths. This allegation seriously affected the image of the company and market share was now on the verge of declining. Coca Cola was also accused of attempting to monopolize the beverage market and therefore incurred a lawsuit that in turn led to restructuring of the company’s competitive efforts that was not as successful as their previous efforts therefore decreasing their competitive advantage and allowing more competitors to capitalize on their market share. Consequently, these events resulted in multiple lawsuits being filed against the enterprise and motivated activists to implement boycotting actions. These activities received major international support and coca cola products were subsequently banned from several universities. The multinational organization responded to the boycotting activities by simply denying any wrongdoing on the company’s part and defending themselves in court. This was realistically a weak approach to such a serious situation that presently continues to negatively affect the company’s image. If boycotting actions prolong, this will negatively affect the company’s market share resulting in demand and profit declines. Ultimately, as the health conscious behaviors continue to develop an additional pressure would be exerted on the company and as discussed before if the company continues to deny the concerns of consumers the company would lose their customers and eventually have to eradicate its operations due to substantial losses. The Coca Cola Company being a beverage manufacturing company is governed and regulated by the Food and Drug Administration. As consumers concerns of the health risks associated with ingredients utilized by coke continues to accelerate, these concerns can influence the FDA to ban such ingredients thus affecting the company’s operations. Additionally, with environmental concerns persisting to exist the eventual, forbiddance of specific types of manufacturing plants such as smelters and glass refining plants in certain international territories can also impact the company. International environmental change will also allow further opportunities and threats to be uncovered by companies. Climate Change is an intensifying actualization that will continue to impact the entire world. It is estimated that the future will bring warmer temperatures, with a warmer climate there would be a greater demand for cold beverages and also for Corporate Social Responsibility efforts to save the wildlife and societies that thrives on colder temperatures. The economic recession may even get worst and new methods would have to be established to allow the company to reduce costs inorder to enhance profitability and provide affordable prices for consumers. The Coca Cola Company being the successful business venture can use its marketing strengths and international operating experience to enhance its operations and eliminate current difficulties. The company possesses strengths such as large financial bases and loyal consumers. The company however must first respond to boycotts by giving an international ambiguous and detailed briefing of the events that inspired the boycotts. The company must also include in their briefing, methods that would be establish to discontinue consumer health and environmental concerns associated with the company’s operations and products. The company must also meet with distraught trade unions and the murdered victims’ families to discuss the existing issues. This would allow the company to be respected and thereby contributing to the recovery of the company’s image. The company must then launch research activities to obtain healthier recipes that would allow the same great taste to please the consumers. To replace the high fructose corn syrup the company can outsource cane sugar from Indonesia at an affordable price that would not increase the cost of the company this would allow the exemption of the fructose syrup and replacing it with a healthier substitute. Other unhealthy ingredients can also be replaced with affordable outsourced substitutes that would provide the same taste. If the company refuses to change the formula, an invention that can reduce the effect of the unhealthy ingredients such as a simple powder to sprinkle in the beverage before consuming that would eliminate or decrease the effects of the caffeine and other health risky ingredients can be manufactured and made available to consumers this will bring additional revenue to the company and appease health conscious customers. The company can also capitalize on this health conscious effect by developing a new and affordable 100% healthy juice made from real fruit and vegetables to appease health conscious consumers. Increased labour outsourcing methods combined with ingredient outsourcing products may also derive a cheaper relative unit labour cost that can accommodate more affordable prices to consumers during the progression of the global recession. Coca Cola must also focus more on environmental friendly policies by installing filters in all smoke exhausts and contributing to agriculture by initiating a tree planting program and also educating the public on how to recycle appropriately. Their products must also be packaged and branded with ecofriendly packaging. Coke must also introduce and develop new methods to distribute its products in case of smelters and glass manufacturing processes being abolished in the future. Coke can invent new technologies such as portable product dispensers that are long lasting and ecofriendly. In the event of severe climate change, the organization can constitute donation funds that can allow its customers to donate to efforts to devise methods such as advertising educational programs that states the steps one can take to take a stand against decrease the process of climate change such as eliminating the use of products containing CFC’s and limiting burning isposal efforts and upgrading to ecofriendly products. These advertisements can also highlighlights the company’s engineered ecofriendly packaged products. The company should also pioneer new products that would provide a cooling comfort to societies experiencing a warmer climate and warmer products that would comfort societies experiencing c older climates.