Article link Seth sahab :D

http://www.huffingtonpost.in/2015/11/28/coca-cola_n_8670082.html

Introduction
Coca-Cola has been name as one of the most valuable brands in the last decade.
And there was even a time when The Company was labeled as the biggest
brand. However, being a multinational the company has been facing quite
a lot of problems in managing its operations in different areas. Coca-cola
started operating in India during 1950 and grew steadily and solidly during
till 1977, but the company had to withdraw its operations as the
government seized its assets. Coke returned to the country again in 1993,
and this time found that their old marketing techniques were not working
with the public. Nevertheless the company worked around the problem
and has since grown enough to replace PepsiCo (it largest competitor) as a
sponsor to IPL, the biggest league of cricket (most-popular Sport) in India.
Coke has come a long way from penetrating the market once again to
establishing itself as a major beverage company in India. The task of
rooting itself has been a hectic one for the company, as the residents of the
country are often encouraged by their societies and communities to “Be
Indian, by Buying Indian”. However Coke has faced challenges in recent
years as well.

Issues in the aspects of cultural and international management

revealed in the article
Lack of trust from the locals
The article was published during the end of 2015, a time when Coke had set its
roots firmly in the Indian Market. The company’s plant at Varanasi plant
was using up water for production, which angered the local residents and
environmentalist groups alike, as the city of Varanasi situated at Uttar
Pradesh had been experiencing water shortages since 1999. The company
was apparently unaware of the potential reaction the general public would
have regarding the matter, as there were no such provisions for the
corporation under any writing in the laws lined out for operations. The
company therefore was taken quite aback by the extreme reaction of the
people and political parties when they demanded the plant to be shut down
without even a slightest bit of consideration.
The organization did not research for alternatives
Manufacturing the beverage has been known to use copious amounts of water and
the plant had decided to use ground water for this purpose instead of
contacting the local authorities before applying such a method. The
ground water was reserved for household usage by the nearby
communities who had little or no alternatives for getting water.

Locals suspicious of the company

Also, whether or not this was the case, the community of the villagers claimed
that they had been facing water shortages since the plant began operations
in 1999. This meant that Coca-Cola’s plant was directly blamed by the
council for the issue, before any prior research. The communities hold a
lot of potential in India as was recently seen by the significant effect of the
population over their current government by a middle-class leader, Arvind
Kejriwal.

The overall brand image could have been compromised

The article also states that the operations of the plant were in direct conflict with
the overall view that Coca-cola had made about them, claiming that they
were extremely responsible in consuming the resources they used in
producing the beverage.

Factors that led to such issues in international

management
Coca Cola did not communicate properly with nearby villagers
It is not uncommon for multi-nationals to be labeled as exploiters of the general
public from their operations, and most of the times the organizations have
to deal with these problems by communicating effectively with the people
to resolve these issues. Even the issue mentioned in the newspaper article
only rose due to miscommunication and rumor amongst the general
people, and it would not have escalated to such lengths if the company had
been vigilant to its nearby residents. If proper communication was
maintained with the people informing them of their situation and
explaining to them how the scarcity of water in the area was never the
fault of the plant itself. Had the plant’s management kept a close relation
 with residents, the number of complaints to the State Pollution Board
would have been considerably lower. The plant was also well known
among the people as good employer where people earned higher salaries
and wages than they did maintaining their own livestock.

The reactions of nearby villagers were not monitored

Coca Cola has already established itself as a popular brand in India amongst many
other major developing and developed economies around the world. The
reason behind coke’s success is very often attributed to their positive and
energizing yet innovative marketing campaigns and strategies, which are
diversified and often presented in such a way that their intended regional
sector is inclined to react positively.

The plant management seemed to deviate from parent company’s orientation

The problem with the issue that arose in the plant operating in Varanasi was that it
further deviated from both these predispositions, where it seemed by the
newspaper article that it was directly conflicting with the laws provided to
be followed. However, the plant was in fact working according to the
license which was granted by the State Pollution Board. The company had
closed operations during 1977 and had re-entered the market in 1993,
started from the scratch and then went on to capture the market of India.
The management itself said that the conditions of the market had changed
from 1977 to 1993, and their previous strategies had to be altered for them
to become effective once again. Due to the issue, the overall integrity of
the brand was also threatened which meant that not only was their plant
hit, but also the company’s name itself. The company needed to
immediately react to this challenge as an assault on the brand would mean
a fall in respect and in turn lowered sales with profits.

The issue would not have occurred if Coke was Vigilant

The plant management needed to keep the nearby residents and their interests
under close supervision and if such had been the case, Coca Cola would
not have faced any issues at all. Public pressure is considered dangerous
for the positive reputation of a brand, as it negates their perceived values
amongst existing and potential customers. The council created by the
village of Varanasi seemed extremely dissatisfied by the operations of the
plant, as they did not want excuses or even gave the time to the
management to find alternatives to get their own separate supply of water,
but immediately close their operations and plant leaving the district.
 The plant of Varanasi came in competition for water with the
locals
The single thought of the plant using up the supply which was to be used by the
local community put coca cola’s plant of Varanasi as a direct competitor
for water from the perspective of locals. This meant that the plant was not
only seen as a nuisance for the locals but also as a threat, who needed to
eliminate the possibility of losses. The district had been experiencing
lower levels of water for quite some time, and being an agrarian district, it
relied heavily on ground water for irrigation and livestock purposes as
well as the use of the same source of water for their own households. This
meant that although the usage of ground water by Coca cola was not
illegal but it was considered extremely immoral in the eyes of the locals.

The company had gained back its popularity among the general public where
Coca Cola was sold but in villages where it’s manufacturing and
production plants were situated, the reputation of the brand was reaching
at an all-time low.

The issue was further fueled by other bodies, such as India Resource Center
The issue did not only rose from the side of villagers who were complaining to
the State Pollution Board, but also from other environmentalist who
claimed that the shortage of water was a result of the higher consumption
of water by the plant. A representative of the India Resource center also
commented that “Elected village council is clear that they did not want the
plant operating in Mehdiganj”

It was later proved upon further research that the shortage of water was not the
result of the plant operations and the conditions were much worse in the
Arajiline Block.

Theories/concepts used to describe/analyze challenges

faced by Coca-cola.
Coca cola should have gathered more knowledge about the area
and its livestock
Coca-Cola is widely known by many people and was even doing quite well
during 1977 when the corporate assets were seized by the government.
 The company’s plant was operating with ground water, and the area of
Varanasi was known to be agricultural, where many of the residents relied
heavily on the water for not only their household, but this water was also
their sole means of getting their livestock and business.

Coke gathers significant knowledge about the culture to target effectively

The company is widely known for adopting different strategies based on different
cultures and on their relevant interests. Coca Cola has also been famous
due to their marketing campaigns, which are usually made in accordance
with the culture itself, such that there was a distinctive campaign the
company used for Diwali, the festival of lights celebrated by the Hindu
majority of India, as well as the ad campaigns used for Eid, celebrated by
the Muslims, the second highest majority of the country.

Coca cola’s marketing statement

Coca Cola had begun its formal operations in the city of Atlanta, and has
maintained its successive campaign for marketing as a distributor of
happiness. The company has proven its success for maintaining the same
strategy throughout the world where it keeps the price of its products such
that the soft drink is feasible to be bought by every person. Also the
company has maintained its reputation as one of the most successful
companies through their innovative marketing strategies. However, the
operational strategies used by the company have been different throughout
the world. Where in U.S.A the company strictly followed the regulations
provided by the government, The Company seemed to have deviated from
doing the same in many Asian countries where reports have been given
that the company was not following rules that it follows in many
developed economies of the world. The strategic predispositions followed
by the corporation are that of a mix between geocentric predisposition and
regiocentric Disposition. The company maintains its profitability whilst at
the same time trying to keep its reputation positive in the eyes of potential
and existing consumers. The Company works on global integration when
it comes to establishing itself in the market as a brand and at the same time
shows national responsiveness when it comes to working in different
individual countries.

The use of Globalization Imperative

The company might have been successful in applying the globalization imperative
in its marketing, but the same cannot be said for the company regarding its
 operations, where many workers believe they get exploited by the
company. The product which began as a medication for headaches turned
out to be the most popular beverage in the world. Created at the end of
1800s, the product was actually used to be only available at pharmacies
for medical purposes, but its fame grew at first radically in the state of
Atlanta as a beverage. This was further helped by the lowered price that
was offered to the consumers. The company has grown so much that at
present, less than five countries are known which do not have Coca Cola
in them.

Thorough research conducted on the demographics

The company also researched the culture of the country thoroughly, identified
collectivism as a major norm in the country’s culture, and targeted
effectively. The stickers on the Coke bottles were labeled with statements
such as “Share a Coke with Sister” etc. The sales campaign proved
successful in the country and it was also applied in the market of
neighboring countries.

Attention paid to subsets of cultures as well

Also, based on the research of the different cultures that dwell within the country,
Coca cola has also been producing Coke Studio, a show giving out new
songs with the cultural theme to gain a better brand image in the country.

Strategies that can be adopted by the MNC’s to avoid

such problems in Future
Adopting a mixture of two strategies regiocentric and geocentric
predisposition
As stated before, the company is working partially on both regiocentric and
geocentric predispositions where they are trying to concentrate on earning
a high profit as well as maintaining their positive image among the general
public. The mission coke operates on is clear, they mainly focus on
happiness of their consumers in each of their marketing campaigns. Coke
has been known to use the most innovative marketing methods to capture
their consumers, and while it may have competition from the local brands
such as Thumbs Up, their advertising campaign is quite distinctive as they
seem to target both youth and the older generation through their variety of
the product featuring a diet coke, which is drinkable by those restricted
with diabetes. The Soda industry has been long since dominated by the
 company due to its concentration of competing without prices. The profits
made by the company are more concerned with the number of units sold
rather than their profit margin per unit, as the price of Coca-Cola is
different in almost every country depending upon the economy’s currency
and situation. The policy helps the organization in staying clear about its
objectives in achieving its long term goals. The knowledge gathered from
the research on Indian population and culture has given Coke insights on
how to effectively target their products to the consumers which has given
a significant boost to the brand image and comments on the product. This
can be easily seen in the increase of popularity that Coke has acquired in
only 22 years of re-entering the Indian market.

Decentralization along with flexible manufacturing

Also Coca cola is operating in the majority of countries all around the world, and
this means that decentralization is considered to be one of the key aspects
for the organization’s plants and subsidiaries. The company also tends to
hold balance between regiocentric and geocentric strategic planning
depending on the regions which are being monitored. For example, coca
cola (the official drink) itself almost always has a plant in the country if
not the city itself, whereas the company’s subsidiaries such as minute
maid are not necessarily being produced in the country’s themselves but
are rather imported by the retailers for consumers. The company can use
these strategies to its advantage by locating its major plants where
manufacturing and labor costs are lower so as to keep a lower cost and
earn a higher profit.

Differences in operations due to cultures

When it comes to culture, again the company is divided between global culture
and regional culture. For example the company’s presence in western
countries follow are global culture which is claimed by the corporation,
but the workings of the Asian and South-east Asian sectors are somewhat
regional depending on specific plants. The specifications and certain
qualities of the company are a little divided between regiocentric and
geocentric approaches, although it would be more suitable to apply a
single approach to its overall operations for easier international
management. The recommended approach would be that of having a
geocentric predisposition.

Accusations were drastic for the company’s image

From the production perspective it is evident from the article itself that different
plants are using different methods of manufacturing for production. The
plant at Varanasi was using ground water which became the issue from the
perspective of local villagers. The company uses different methods for
obtaining water from other plants such as the use of the water from
desalination plants at areas with high amount of sea water available. The
issue would not have arisen if the company had been vigilant of the plant’s
working and paid attention before the issue escalated to newspapers
resulting in negative perceptions regarding the company. On a close
inspection it is clear that the plant was operating both legally and morally,
but the fact was twisted into presenting a picture that the plant was causing
damage to the villagers and their livestock, and only the conclusion
cleared the previous statements.

The uniqueness of the products in relation with competitors

Coca Cola proudly claims that the taste of its products is standardized and tastes
do not vary from country to country, a statement which has been often
contradicted by many of its consumers in reference to its subsidiaries.
Regardless of the verdict, both the points lie in between Regiocentric
predisposition and geocentric predisposition orientation of the company.
The taste of Coca Cola (official drink) has been known to stay the same
regardless of the region even after their different methods of obtaining
resources. The company is widely known due to its uniqueness of the
drink, which has never been replicated when it comes to taste. The closest
rivals to Coca Cola in the market of India are Thumbs Up and Pepsi, both
of which are considered “sweeter” and quite different in taste to the older
drink. Many of the subsidiary products are manufactured and distributed
locally such as Fanta and Sprite, but there are also products which
imported by the country, such as Powerade and Simply.

Setting roots through sponsoring the most popular events

The company has also set its roots firmly by targeting the majority of population
by becoming on the Partners of FIFA World Cup 2014. Football which is
considered the most popular sports of the world gave Coca cola a lot
exposure and especially the world cup celebration song of 2009, which has
now turned into the official tune of the company. The company has a 16
years deal with FIFA which will run until 2022. Even so, the being a
sponsor of football does not end the sponsorship for Coca cola who has
putting its root in leagues of local sports tournaments as well, such as
 Indian Premier League, the biggest cricket tournament of the country,
where the company sponsors two teams.

However, when it comes to Personnel practices, Coca Cola keeps a regiocentric

approach where it prefers to hire employees from the region itself and
although the regional manager may report to the headquarters at Atlanta,
the regional management is decentralized enough to make most decisions
themselves.

Conclusion
The Coca Cola Company has been in the market for beverages and drinks since
1886, a period longer than any other beverage company can claim. The
company has faced many crises in its more than a century old operations,
but has still been able to establish itself as one of the most distinctive
brands in the world. The potential of the company could be clearly
observed from the fact that it was able to reach its peak position twice
within the life of India itself. The company showed the power of its brand
when only during 20 years of operations it had gained enough popularity
among its consumers to launch a full show which featured the prominent
singers of the country along with encouraging new talents in the country.
The company faced the Varanasi Issue very efficiently as well, when
instead of reacting to the blames put out by India Resource Center and the
Varanasi Village council, the only statements issued gave researched facts
describing that it was not the fault of the company in the shortage of water
in the district and Mehdiganj area.