Introduction
Managers of multinational organisations need to be able to manage businesses internationally. One needs to possess knowledge and skills beyond those of usual business expertise to be in a position to manage at the international level. For instance, managers in multinational firms must understand the various regulations in the countries in which the organisation operates. They also need to understand the values and customs and the laws in the various societies in different countries.
The ability to execute transactions in various nations is also essential. Communication is of high importance in international management. It can emphatically be mentioned that communication varies from one society to another and from one nation to another (Bilgin & WĂŒhrer 2013).
Communication is a factor that can contribute to the success of a business organisation or the failure of the business. Therefore, an international manager should be able to understand the variations in communication in different countries. The cultures of various countries are also different. This affects the type of products to be sold in each country and the style of management to be adopted. It also affects the kind of employees to be hired. This calls for the manager to understand the various theories that are related to intercultural differences.
A multinational organisation should come up with an international strategy to be able to succeed in the international market. The strategy will guide the international manager, who will be required to be well acquainted with the theories related to international management (de Kluyver 2010). This essay will focus on the international strategy of the Coca-Cola Company. Coca-Cola is a company based in the United States of America, but it has operations in almost every nation worldwide. It is one of the most successful international organisations and has been able to penetrate over 200 countries.
Coca-Cola is among the international brands that are well known worldwide. The company has prospered in the beverage industry beyond any other competitor. It has taken a great international strategy and applied theories of international management for the company to achieve this feat.
Coca-Cola international strategy
Without a doubt, the strategy that Coca-Cola has adopted in its international venture has been successful because it has helped the company reach great heights. The path to the company’s success has not been easy, as it has encountered many challenges. However, Coca-Cola has always found a way out. For instance, the Coca-Cola products have been banned in several countries, citing that the products are not healthy for public consumption, and they encourage obesity (Johnson & Peppas 2003).
The company has been faced with many lawsuits, sometimes being accused of child labour sweatshops and discrimination in its provision of health care benefits to its employees. Despite these challenges, the company has been able to adopt a winning strategy. It has five major factors that form the core of its strategy: the architects of its success. The factors are a peculiar brand recognised worldwide, quality production, good marketing strategy, global availability, and consistent innovation.
Brand
One of the most effective competitive strategies for any organisation is brand development. Organisations make brands that are unique and differentiated. Also, they work towards making the brands become recognised by a wide range of customers (Chakravarthy & Coughlan 2012). The Coca-Cola Company has adopted a unique brand that has been a major factor in its international success. Organisations need to have a brand that stands out amid other products that are in the market.
Coca-Cola is a company that is operating in a highly competitive and dynamic beverage industry. With the high number of companies that are either direct or indirect competitors of Coca-Cola, the company has to work tirelessly on its brand to ensure and secure a competitive advantage. Brand Coca-Cola is known in almost every household in the countries where the company has operations. Several factors contribute to the brand being known to that extent. Among such factors could be effective promotion and advertising, as well as proper marketing that Coca-Cola undertakes.
A company’s brand is widely known across the world because of its smart promotion strategies. However, being known is not enough to make the brand unique, as customers will also want a high-quality product to realise the maximum possible value for their money. As a result, good quality is another factor contributing to an organisation’s brand standing out among the rest. Brand uniqueness is a significant factor in the development of international marketing because a good brand will always attract a high number of customers and increase the organisation’s chances of making high volumes of sales and profitability (Haig 2006).
The ability of an organisation to expand in the international market depends on its financial strength. Coca-Cola has used its brand uniqueness as a strategy to expand in the international market. The widely known brand gives the company an advantage because entering and penetrating new markets in new countries is relatively easy. People readily accept the brand, as it is not very new to them at its first mention or appearance. Coca-Cola is available in several brands, such as Coke Zero, Diet Coke, Fanta Zero, Sprite, Schweppes, and Cherry Coke.
Quality Production
Quality production is another factor that has contributed to the success of Coca-Cola in the international market. Coca-Cola has utilised this strategy to rise above its rivals in the industry. The company produces drinks that are of high quality in terms of hygiene and nutrition content. The bottles are well sealed; thus, a high hygiene standard is observed (Udeani 2008). Although the company has been criticised and accused of producing drinks that are not healthy and pose the risk of obesity to citizens, its quality has always been high. The company has produced Coke Zero to respond to these allegations.
It is a drink that is said to be sugar-free, and it reduces the risk of obesity. Coca-Cola has been able to offer its customers high-quality products consistently. This has cultivated a close relationship with its customers and helped in building customer trust. It has aided in international growth and development, as more customers continue being attracted to buy the brand.
Good marketing strategy
Marketing in the international scene is one of the most daunting tasks faced by the managers of multinational organisations. Multinational organisations need to have effective marketing strategies to gain a competitive advantage in the international market (Shimp, 2010). It is challenging for any organisation to enter into a new country and win the consumers’ hearts. The company will have to review its strategic management practices and its strategic competitiveness to secure any chances of doing well internationally. Managers need to know the organisation’s internal and external environments before developing an effective strategy (DahlĂ©n & Lange, 2008).
This will enable them to understand the strengths of the organisation to capitalise on them and the weaknesses to work towards improving them. An effective business-level strategy will be vital to the success of any multinational.
Coca-Cola has been able to market its goods in the international market and achieve success with this strategy. This strategy aims to make the product known in the company’s market segments and persuade people to buy it. The managers of Coca-Cola have adopted this strategy and have been able to deliver creative and innovative marketing programs for the company throughout the world. It is a strategy that has contributed greatly to the success of the company.
Global availability
Globalisation has become dominant over the past couple of years, with the global economy being integrated as one. This has led to the emergence of international trade, as well as multinational corporations. Multinationals need to avail their products in the international market or to the countries they operate to increase their chances of success. Coca-Cola products are usually bottled and distributed to all parts of the world.
Therefore, customers can easily access these products from wherever they are (Isdell & Beasley 2012). One of the factors that help gain customer loyalty is ensuring that products are always in the right place and at the right time. This increases the convenience of customers and their loyalty to the organisation. The end result is that a company can create a large consumer base and increase its competitive advantage.
Consistent innovation
Innovation refers to how a company improves its products and services to make them of higher quality and more competitive in the market. It involves bringing in novel ideas that will help the company improve the quality of its products. For any business to survive in a competitive market, it has to bring in new ideas that will enable it to grow and have an advantage ahead of its competitors (Inauen & SchenkerâWicki 2012).
Innovation varies from the invention, as it seeks to develop products that already exist. Innovation improves what has already been invented by someone else. Technological advancement has been rapid in recent years. Technology is an essential factor in innovation. In other words, technology contributes greatly to innovation. On the other hand, innovation gives the organisation a competitive advantage, as it can produce goods that meet its customers’ needs.
Coca-Cola has been producing new products consistently throughout the years. It can observe market trends and produce what customers need. For instance, the company produced Coke Zero, a sugar-free drink that reduces the risk of getting obesity, when it was criticised for products that were said to increase the risk of obesity. In so doing, it was able to maintain its grip on the market and continue being competitive. The company also realises that different cultures require different flavours of soft drinks; therefore, it has been able to offer those preferences in their beverages. This is a strategy that has also been highly effective in the international growth of Coca-Cola over the years.
Communication across cultures
Communication is one of the most significant factors in the success of any organisation. In simple terms, communication can be defined as the process through which information is passed on from one party to another. Employees in an organisation are able to work as a team when communication is efficient (Ting-Toomey 1999). Communication is normally a challenge, especially in international organisations, because the workforce is composed of people from different cultures, who speak different languages. This acts as a barrier, and it can potentially affect the general organisational performance negatively.
In international management, managers need to come up with a strategy that will help in solving the communication problem among the workers. Failure to communicate properly can affect the performance of the organisation. Communication normally contributes to the success of most firms.
Countries have different communication and negotiation structures, based on the various cross-cultural theories. For instance, communication is horizontal in Italy, while it is mostly vertical in China. The horizontal communication is a challenge for the manager because the message may be distorted along the way. Edward T. Hall and Mildred Hall established a theory that explains communication across different cultures (Guirdham 2011).
It should be noted that non-verbal communication is also a key factor in international management. People from different cultures use different sign languages. A sign language in one culture may mean something completely different if it is used in another culture. Similarly, business etiquette will vary from one nation to another. These are some of the variations that need to be understood by international business managers. Therefore, cultural differences need to be understood as part of an international strategy.
Coca-Cola has been able to overcome the communication barrier and succeed in the international market. The company has regional managers in various regions to overcome this challenge. The manager of every region is a person who understands the culture of the area they manage. The regional managers then hire employees who understand the language and culture of the region. In the event that a person from a different culture is hired, they are introduced to the new culture and taught the basics that are essential for business. It is imperative to note that effective communication helps in business negotiations. This further increases the chances of business success.
Assessing the environment
Organisations operate in environments that affect their performance, either directly or indirectly. For this reason, companies need to be aware of their surroundings. The environments that affect business operations include the political environment, economic environment, social environment, and technological environment. Coca-Cola, as an international company, is affected greatly by these environments as they differ in each of the countries where it operates (Gong 2013).
The company needs to understand these environments as part of its strategy. When it comes to political stability, it should be noted that a stable political environment will always favour the business performance, while an unstable political environment will lead to poor business performance. The company should also understand the various political and legal requirements that will permit it to operate in each of the countries. The economic environment has a direct effect on profitability. A good economic environment will mean that people have a high purchasing power and they can afford to buy the Coca-Cola products, considering that these are luxury goods. A poor economic environment, on the other hand, will affect its performance because people may not afford to buy the products.
The social environment also affects Coca-Cola. The company’s products are mostly consumed during welfare events. There are cultures that do not embrace the drinks in their culture, while others embrace the products. Consequently, the company will have poor performance if it operates in a culture that does not fancy its products during welfare events. Finally, technology has become dominant in the current world. Technology helps in innovation and quality and effective production. As an innovative company, Coca-Cola has embraced technology as part of its international strategy.
Interdependence Social Responsibility and Ethics
This is another strategy that has been used in the international market. Environmental issues have become global concerns over recent years. The cases of environmental pollution have increased and led to global environmental problems, thereby stimulating actions of international leaders and managers in search of a way to mitigate the problems. For instance, the increased emission of carbon dioxide has led to the continued degradation of the Ozone layer, thereby causing global warming. Organisations are looking for ways of protecting the environment as part of their international strategy.
Customers, on the other hand, will go to an organisation that shows concern for the environment (Ahlstrom & Bruton 2010). This is an indication of corporate social responsibility in the organisations. In other words, corporate social responsibility has emerged as one of the most effective international strategies pursued by organisations. Coca-Cola is one of the companies that have shown responsibility towards the environment (Hasan 2013). The company has embraced the green economy through its production. This has been demonstrated in its production of the new product known as Coca-Cola Life, a drink that uses natural sweeteners. This indicates the company’s support for a green economy, as well as a healthy diet (Lopez 2012).
Coca-Cola has also embraced ethics in its operation. Although the company has been accused of child labour sweatshops, it has always been a supporter of good ethics. Moreover, the accusation is an issue that has been corrected. Good ethics in a company is an international strategy that is very important for the purpose of the competition.
Conclusion
Globalisation has increased significantly over recent years. Most organisations have joined the international market in search of more customers. Therefore, managers of today’s business organisations need to have the ability to manage in different parts of the world. A manager should understand the various cultures of the countries where they are managing. Failure to understand the various cultures of various nations will make it a mountainous task for a manager to work in a country that is different from their native country. Globalisation has led to the development of international trade and the establishment of multinational organisations. It has also led to the broadening of the term management to international management, where the manager is required to manage an organisation that operates in more than one country.
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