With reference to one or two organisations, evaluate

different strategies businesses can adopt to respond to

issues of globalisation.

Globalisation is the process by which businesses and other

organisations develop international influence or start operating
on an international scale. As the world becomes increasingly
interconnected through cross-border trade and operations,
more opportunities as well as threats have been introduced to
all businesses. Thus, businesses such as The Coca Cola
Company have to adopt certain strategies to capitalise on
opportunities and deal with threats. Strategies are plans set by
such firms to achieve their long-term goals. Likewise, The Coca
Cola Company, which is the worlds leading beverage
corporation, have met with opportunities for, and threats to
their growth, and have thus adopted various strategies to
achieve their long-term goals of increasing market share and
profits.

Firstly, the phenomenon of globalisation has provided

Coca Cola with the opportunity to lower costs of production, by
enabling the company to operate on a larger scale and to
source for new markets to operate in other countries. The
present day Coca Cola Company operates through factories,
retail shops and subsidiaries in every continent with the
exception of Australia and Antarctica, in over 200 countries. By
doing so, the company can enjoy the benefit of lower costs of
production as labour is much cheaper in countries such as
China. The propagation of globalisation has also helped Coca
Cola gain access to areas which are rich in resources. For
instance, with globalisation, Coca Cola can get a stake of the
fresh groundwater found in Latin America and India, which is
needed to produce their mineral water products and soft drinks.
Thus, not only can the company enjoy lower costs of production
by expanding overseas, it can also increase production, thus
increasing profits.
 Secondly, the Coca Cola Company can also enjoy larger
economies of scale, as well as an increase in customer base
and revenue. The company has a stake in more than 900
factories and bottling plants worldwide, through subcontracting
and the creation of the Bottling Investments Group (BIG) to
meet the demand for their products. The BIG operates globally
in 18 countries, such as Qatar, China and Singapore. Thus, the
large-scale of Coca-Colas operations means that their products
can be produced at a higher and faster rate, increasing
efficiency and productivity for each factory, ensuring the
maximisation of their input resources. Additionally, this also
enables Coca Cola to invent and produce new products at a
quickened rate, since the firm already has the technology and
system in place, therefore satisfying customer demand and
expectations. Furthermore, by operating in over 200 countries
worldwide, the company has increased their consumer base
and increased demand for their products, enabling more
revenue.

However, globalisation has also brought about threats like

increased rivalry. In particular, Coca Cola faces stiff competition
from Pepsi Company, which is the second largest beverage
company. With the advancement in technology and social
media, several companies, like Pepsi Co have taken advantage
of this to advertise and promote brand image to the public,
increasing competition Coca Colas competition. In fact, the
Cola Wars is a term used to describe a campaign of mutually-
targeted television advertisements and marketing campaigns
since the 1960s between Coca Cola and Pepsi, for example,
Pepsis most successful campaign Drink Pepsi, Get Stuff, which
was a loyalty rewards programme, enabled Pepsi to dominate
the summer Atlanta Olympic Games, despite the fact that
Atlanta is Coca Colas hometown, and Coca Cola was the official
sponsor for the games. In response, Coca Cola Company came
up with its own rewards programme, Coke Rewards. Thus,
globalisation has also led to the rise of competition from rival
groups, resulting in Coca-Cola having to spend large sums of
money on advertising and campaigns to compete and remain
attractive to customers.

In order to capitalise on the several opportunities that

have emerged for growth, due to globalisation, the Coca Cola
Company has adopted the strategy of diversification, both
related and unrelated. The company has invented a wide range
of products, from soft drinks to energy drinks and also mineral
water, all of which is sold separately in different countries. For
instance, Sprite is sold in Asia, Fanta Pineapple in Greece,
Europe and Inca Kola in Peru. It is after conducting thorough
research that the company could understand the local
preference and taste buds better, and then create beverage
suiting the local taste, before introducing it in the respective
countries. In doing so, Coca Cola hopes to increase market
share and profits.

Additionally, in an effort to deal with competition from

Pepsi and other drinks companies, Coca Cola has dabbled in the
film industry, so as to increase their global influence. In 1982,
Coca Cola acquired Columbia Pictures for $692 million. The
company then sold it to Sony in 1989 for $3 billion, making a
hefty profit. Thus, by not limiting themselves to the Food and
Beverage industry, the company could create awareness about
their brand and products, increasing influence on the markets,
and promoting a popular brand image that is meant to convince
customers of the edge that the company has over Pepsi Co and
other rivals. As the more popular choice, customers may be
more inclined to patronise Coca Cola rather than its rivals, thus
allowing the company to maintain their customer base,
effectively dealing with threats to their growth.

Other than competitors, the customers of Coca Cola have

also benefitted, in positive ways, from the strategies of the
company to address the issue of globalisation. With Coca Cola
making the monopolising of the beverage industry their goal,
the company has expanded overseas at an elevated rate. This
means that customers who enjoy their products can have more
access to it, through the numerous retail shops and vending
machines set up at every corner of the globe. Furthermore, with
the rewards system, customers can receive additional benefits
while still being able to satisfy their cravings for Coca Colas
drinks.

In conclusion, in order to respond to issues of

globalisation, the Coca Cola Company has carried out several
strategies, from market penetration, to diversification and
making use of social media platform for advertisement, so that
they can continue benefitting from the opportunities
globalisation has provided, as well as effectively deal with the
threats to their growth.