Question

Select a company that operates globally and use the Internet and any other available source to gather information on the company. Based on your research, write a paper describing some of the possible benefits that the company might have gained by operating globally. Also, describe challenges that the company has faced or is currently facing as a result of operating in a global society. The company I'm choosing is Coca Cola, please help thank you.

Answer 1

Coca cola has seen challenges and impediments and deep success journeys while operating globally. The biggest success seen is that it has realised economies of scale, low cost synergies, higher product differentiation in depth and breadth, quality customer data, brand awareness and resonance, higher global market share, consistency in positive cash flows. However challenging situations remain the showstopper in the journey and has been analysed using Modules like PESTLE, SWOT AND PORTER FIVE FORCES.

Five Forces Analysis:

Bargaining power of Suppliers - Many suppliers in this segments offer low cost services which means bargaining power is less for suppliers.
Bargaining power of buyers- Since Coa Cola operates either in perfectly competitive market or Oligopolistic market across globe, buyers have higher choices and hence higher power.
Threat of New Entrants- Since new entries from lowcost glocal providers can eat up Coca Colas share due to ease of taxation and licensing, threat is higher substantially.
Threat of rivalry between existing firms- This is comparatively very high as margins are wafee thin and innovation is constantly evolving making it difficult for the industry as whole.
Barriers to entry- Large initial investment, high marketing and distribution spends, constant innovation are biggest barriers.

Pestel Analysis :

Political - India, South and North Korea ar emost errant markets with high taxation and compliance and warfare tensions.
Economic - global economic degrowth and stagnant growth in mature markets is cause for worry.
Socio cultural - changing consumers preference and strong core culture is what Cica Cola has coped up with and reoriented itself across global markets to stay ahead of curve.
Technological - Wide-spread innovative solutions from competitors like Pepsi, GSK, Nestle have threatened portfolios. However Coca-Cola has been fast mover and easily stays ahead of curve with its unparalleled premium segment and upscale technologies which competitors match too lately.
Legal- the recall of Thumbsup has been highest litigation based loss because of adulterous content and lack of quality checks and also copyright infringement issues with Pepsi and price wars make it very cumbersome and difficult to deal with.
Environmental - the organisations has been keen ethical player and truly abides environmental laws.

Strengths

Global brand image
Economies of scale and cost leadership
Highest patent growth
Innovation and design capability

Weakness

High dependent on local manufacturer for raw materials
Product cannibalization due to less differentiation
Focus majorly on high prices and premium segment in some countries

Opportunity

Tieups with retailers and Ecommerce and payments gateway
Focus on rural markets
Focus on low price segment
Focussing on diversified products like healthy drinks and beverage

Threat

Chinese products and hypercompetition
Uncertainty in government policies
High taxation
Retail markets collaboration with low cost players and private labels.