PRODUCTION IN A GLOBALIZED WORLD: THE COCA-COLA CASE 8
Productionin a Globalized World: The Coca-Cola Case
Productionin a Globalized World: The Coca-Cola Case
Productionin the consistently globalizing world has become a dynamic part ofthe business environment, especially global business. At the sametime, globalization impacts on the business process by offeringdifferent ways of perceiving and practicing various businessfunctions. The impact of globalization has improved the productionfunction, the processes and procedures of the manufacturing productsand services. Taking the case of Coca-Cola, the discussion aboutproduction in the world will illustrate how globalization impacts onthe production in business.
Theselected topic is the production of Coca-Cola Company in a globalizedworld. I selected Coca-Cola because of the global presence thecompany commands in the world. To successfully understand the impactof globalization in the production function of a company, it iscomparative that the focus of the observation is directed to acompany that has global presence and has a high production-intensiveproduct. Therefore, the company Coca-Cola presents a good example ofa firm to explore its production in a globalised world.
Toexplore the concepts of production in globalised world, I exploredthe locations of Coca-Cola in the world to establish how the companylocates its production units. The next step was to evaluate the waysin which Coca-Cola diversifies the locations in different methodswith some autonomous and others franchises. Through thisunderstanding, I sought to understand the location of productionunits of Coca-Cola in Africa. Africa is the firm’s major foreigninvestment region. This region is Africa and is informed by thecomparison of the firm’s global investments as shows in the mapbelow
(CSPINET,2016)
Theselected steps were employed in understanding the way globalizationrelates to the patterns that Coca-Cola has employed in the world. Theoutcome of this step is realizing that Africa as the region whereCoca-Cola has invested the most in its international markets. To bemore specific, the next step was to identify the most importanteconomy in the region, especially for Coca-Cola Company. The outcomeof this step is the selection of South Africa as the country offocus, as Coca-Cola seeks to establish production and presence in thecountry.
Productionin a globalized world relates addresses the important issue of howcompanies change their production strategies to align to differentenvironments. This is because different regions in the world havedifferent social, economic and political perspectives that impact onthe production process. Therefore, production in globalised worldrelates to the course, as it shows the impact of geographicallocations on the operations of a firm. At the same time, productionin a globalized world is reflected by the different locations acompany establishes its facilities. In this case, the discussionfocuses on production of Coca-Cola in Africa.
Coca-Colastarted its operations in Atlanta in the late nineteenth centuryafter the invention of the drink’s formula, which is kept a secret.At this time, there was little about the concept of globalization asthe firm sought to grow its operations and market in the UnitedStates. The success of the firm’s business in the United Statesplaced it as a rising company in the global arena. As the economy ofthe United States was growing towards global influence in the mid andlate twentieth century, Coca-Cola rose to global presence, therebysetting locations globally.
Oneof the most conspicuous globalization strategies for Coca-ColaCompany is the location of its production plants in different partsof the world. This strategy is implemented with a keen balance of theregions that the company is located. At the same time, the locationof the company’s premises is inspired by the uniqueness that eachlocation offers. This uniqueness is differentiated by thegeographical location and physical properties of the region.
Coca-Colahas established several production units in the world, all whichoperate in the countries that the company has established markets.Coca-Cola has more than 900 manufacturing plants and bottlingfacilities in the world. The global presence is further cemented bythe three ways of establishing its locations. First is theestablishment of production and distribution centers in differentparts of the world. The second is the establishment of distributionsales center locations globally. These two ways are direct locationscontrolled by the company and are central in the production and saleof the soft drinks at the company. The third way of locations isthrough franchises, which involves third parties. This way, Coca-Colahas over 84000 suppliers worldwide and the number grows with thecompany.
Locatingproduction in a globalised world addresses a number of issues thataffects businesses at a global level. One of the major issuesaddressed by this production is the differences in the preferences ofglobal consumers. The global market is differentiated by thegeographical uniqueness of different regions. As a result, productionof homogeneous product from a central point leads to challenges asdifferent regions have different tastes and preferences. By locatingproduction units in different regions, Coca-Cola is able to adoptdifferentiated packaging and production features of the product, allaccording to the tastes and preferences of different regions.
Anotherissue that is addressed by production in globalized world is that ofcultural diversity and communication. In the globalised world,marketing is challenging because different regions have differentcultures, which affects the reception of the marketing messages. Toaddress this, Coca-Cola establishes independent production anddistribution units all over the world, each with its own ability tolocalize the company’s main marketing messages. This allows thecompany to spread the same marketing message at the same time, allover the world but packaged in different ways and languages to fitthe local markets.
Productionin globalised market further addresses the issue of location ofconsumers. The location of the consumers and suppliers is anothermajor issue that affects companies in the globalised market. Thenearer the product is to the consumer, the better for both thecompany and the consumer. Therefore, a company operating in foreignmarkets has to overcome the geographical challenge and seek toestablish it products near the customers. Coca-Cola has achieved thisby establishing several production units in different countries,where its soft drink products will be near to the local consumers.
(Coca-Cola,2016)
Thepatterns that Coca-Cola has established in the world are not onlyrelated to globalization but also define the firm’s globalizationagenda. The strategic location of the company’s production centersin Africa for example shows the firm’s commitment to localize theSouth African market like a local company. One of the main strategiesthat Coca-Cola has adopted in the South African market is to promotethe South African agenda as a local company. The peak of thisglobalization strategy I labeling of the soft drinks with the namesof South Africans.
Anotherglobalization element that Coca-Cola employs in South Africa is theuse of local distributors in the marketing process. This allows thecompany to establish production units that are powered by theunderstanding of the local markets. This is because the firm seeksthe local market that has different cultures and geographicalfeatures that are not same with the country of origin, the UnitedStates. To do this, the company has several distribution centers andbottling centers that engage in marketing and selling the softdrinks.
Atthe same time, Coca-Cola’s patterns are related to globalization bythe way the firm allows the production units to operate independentlyin different regions. The independence of the production units allowsit to fit in the local markets, despite having adopted a globalstrategy. In South Africa, the production units are autonomous tomake unique strategies and products that fit the warm continent.
(Booker,2015)
Productionin a globalised world requires a company to adopt a globalisedpattern and system which appeals to local markets, but with a globalstrategy. Coca-Cola employs a unique globalization system thatensures that its appeal is felt in local markets, but operating atthe global strategy. According to the company, the firm is a “globalbusiness that operates on a local scale” (Coca-Cola Company, 2016).The company further explains that it focuses on the local marketwhile still creating a global reach (Coca-Cola Company, 2016). Thisis achieved by establishing global production units that place thecompany into the global market and establishing presence in allgeographical locations.
References
Booker,J. (2015). Coca-ColaBottle Art Tour Opens in South Africa.Retrieved From,<http://www.coca-colacompany.com/stories/slideshow-coca-cola-bottle-art-tour-opens-in-south-africa>May 04, 2015
Coca-ColaCompany,2016, Retrieved From,<http://www.coca-colacompany.com/our-company/the-coca-cola-system>May 04, 2015
CSPINET,2016. SodaCompanies Turning to Low- and Middle-Income Countries to ReplaceSagging U.S. Soda Sales. RetrievedFrom, <http://cspinet.org/new/201602091.html> May 04, 2015