Question

Please talk about he Coca Cola Company in terms of two MNE activities - trade vs. FDI (foreign direct investment).

Answer 1

Answer) Coca-Cola is an Multinational Enterprise (MNE) as it has headquarter in Atlanta, Georgia and multiple local offices located in the more than 200 counties to manage the global operations.

Coca-Cola conducts it's transaction across national border and this is depicted by:

1. Operation in local scale: whereby local needs and aspiration is taken into consideration while marketing the product.
2. Integrate with local community (FDI): working on the model of citizen to expand their outreach and get more locals involved. For instance, Coca-Cola acting as sponsor for state level sporting events.
3. Value chain: value addition is performed at various nations, where the cost of input and production is the cheap. This allows coca cola to trade across the world and take advantage of the comparative advantage existing across different nations.

In the era of globalization, Coca-Cola has established joint ventures to gain entry into Chinese market. This reflects the theory of internalization that has been incorporated by Coca-Cola to reach into new markets.