PGBM16 Global Corporate Strategy: Coca-Cola's Global Competitiveness

This report delves into global corporate strategy, focusing on open innovation, convergence, diversity, and corporate social responsibility. It analyzes Coca-Cola's competitiveness using Porter's Diamond model, examining factor conditions, related industries, demand conditions, strategy, and government influence. The report discusses the merits and demerits of global convergence and international diversity perspectives, advocating for the latter with product differentiation. It also touches on corporate governance, profitability, and social responsibility, highlighting the importance of stakeholder relationships and ethical practices. The analysis provides insights into how companies can achieve sustainable competitive advantage in the global market.

RUNNING HEAD: MBA Assignment
MBA Assignment

MBA Assignment 1
Contents
Question One: External Innovation and Competitiveness.........................................................1
Question Two: Convergence, Diversity and Competitiveness...................................................4
Question Three: Corporate Governance, Profitability and Social Responsibility..................6
Question Four: Personal reflections on learning........................................................................8
References........................................................................................................................................9

MBA Assignment 2
Question One: External Innovation and Competitiveness
Open Innovation refers to the type of innovation that is not limited to the internal process of
business, instead open innovation refer to the innovation that work beyond the boundaries of the
company. It helps the business to identify their innovation potential by using available
environment. Whereas closed innovation is based on the principle that innovation is developed
and organized in the internal process of companies only. The place of innovation is in the
internal process of the organization only (Osagie, et. al., 2017). While initiating open innovation,
an organization aims to attain the best innovation from any part of the world whereas in closed
innovation, the organization believes that they can do it and they will do it. In open innovation,
there is import and export of knowledge to improve and increase innovation while in closed
innovation there is emergence of innovation within the company (Chen, and Hung-Baesecke
2014). Customers act as active co-innovators in the case of open innovation and in closed
innovation, they act as passive recipients. Lastly, it should be noted that venture capital plays an
important role in the process of open innovation and it has little or no significance in case of
closed innovation (Coca-Cola 2018).
Source: (http://bock-pm.com/service/open-innovation/)
Coming up to the Annual Reports of the company Coca-Cola (Hong-Kong), it should be noted
that the report evaluated the impact of various aspects on the activities of the company. The
Porter Diamond National Competitiveness model is suitable to evaluate various impacts of
various aspects on the external innovation approach used by the company.

MBA Assignment 3
Factor Conditions: this element of the Porter Diamond model talks about different types of
resources that may or may not be available in the home country. Further, there are two types of
resources present in the environment that are basic and advanced factor, the basic factor are
those resources that are natural and mobility of these resources is low. Whereas advanced factor
include those factors that are more sophisticated such as human resource, research capabilities.
Relating this element to the activities of Coca-Cola Hong-Kong, it should be noted that the
company aim to create global reach in the market using the local market resources. According to
the management of Coca-Cola, the basic factors helps the organization in attaining competitive
advantage in the target market, however the organization also feel that the advanced resources
helps the organization in sustaining that competitive advantage. So, the company use local
resources to initially gain identification the market through innovation and then aim to use
advanced resources in order to sustain that innovation (ICT Regulation Toolkit 2018).
Related and supporting Industries: These industries can produce input for the company that
are critical for innovation as well as internationalization. This element of porter diamond model
states that success of an organization depends upon the suppliers and related industries of that
region. It can be explained with an explained with an example, like international competitiveness
of German automotive industry can be explained by strong focus of German industry in this
sector. Similarly, the financial report of Coca-Cola states that the business of Coca-Coola heavily
relies on the power of partnership. Company’s bond with different local groups and suppliers
helps them to manage their activities (Klarsfeld, et. al., 2012).
Demand Conditions: This aspect involves factors like early home demand, size of market,
sophistication and market growth. These characteristics help the organization in creating
sustainable advantage through innovation in the target market. Like, sophisticated home market
buyers pressurize the firms to innovate their products and services faster so that they can create
more advanced products than the competitor firms can. With respect to this element of model,
the annual report of the company explains that it is more important for the organization to fulfil
and satisfy the local need than to look for the fulfilment of global needs of the customers of the
company (De Wit 2017). The company works with a forward-looking approach under which
they initially make use of innovation in their business to satisfy the demand of the community

MBA Assignment 4
from which they borrow the resources and then look for the global demand. The local presence
of the company makes it easier for them to adopt any technology, implement it and insist the
customers to make use of it (De Wit, and Meyer, 2010).
Strategy, Structure and Rivalry: The Company faces no problem in initiating this element in
the business. As this element talks about the way, in which an organization has organized and
managed their business functions for the growth and success in the international market.
However, presence of rivalry makes the companies more competitive and innovative in the
market. Like, in PepsiCo would be a competitor for Coca-Cola Hong-Kong then the company
would not have used innovative sources and outshined their capabilities in the target market
(Johnson, Scholes, and Whittington, 2005).
Government: The government plays a strong role in influencing the image of the company in
the target market. The company aims to share value with the community and government and
believes that they cannot have a strong growing business unless they are serving their sharing to
the community and the government. The company has good terms with the government of Hong-
Kong. The CSR activities of the company also help them to build a strong relation of with the
government of the country (Felin, and Zenger 2014).
Chance Events: It refers to the random events that are beyond the control of the company. In
order to attain international competitiveness, it is very important for the company to grab the
opportunities and chances available to them. Like, in Hong-Kong, the company found Swire
beverages to exclusively use the tag of the company while manufacturing products that is chance
of luck. It might have happened that the competitor firm have chosen the organization to work
with. So, by grabbing this opportunity the company excelled their services in the target market
by using innovation and eliminating competitions as well (West, and Bogers 2014).

MBA Assignment 5
Source: (https://www.researchgate.net/figure/Porter-s-diamond-of-national-competitive-
advantage_fig3_247610619)
Question Two: Convergence, Diversity and Competitiveness
Convergence refers to the process of coming together in business so as to increase the extent of
scope of business for companies. The process of coming together of distinct and separate factors
in the business is called convergence. Moreover, when all the factors have come across from
different parts of the world then it is called global convergence (Cavusgil, et. al., 2014). Global
Convergence refer to the process of combining geographically distant cultures for the better
working of the business and influencing each other’s activities. It is important for the
organizations using open innovation to make use of global convergence to increase the
competitiveness of the business (Greenwood 2016).
Merits Demerits
 Open Innovation: With the help of
convergence, the business process gains the
efficiency to work with developed and
qualified organizations that can provide
them sustainable competitive advantage in
 Antitrust Issues: With the initiation of the
process of global convergence, the
organization gain the chance to make use
of resources that are different in nature and
are geographically far as well. Resulting to

MBA Assignment 6
the target market. Resulting to which, the
company is able to receive better options
for innovation from the external market as
well (Soria, and Troisi, 2014).
which, the companies using this
perspective faces reliability issues while
using this perspective (Ehrenberg 2016).
 Growth of Technology: With the help of
technology and media convergence
process, the organizations gain the
efficiency to make use of abroad
technology in their business functions. The
companies easily adopt foreign technology
in their business process. Thus, it acts as
advantage for the company to adopt new
and hi-tech technology with the process of
global convergence (Park, Kwag, and Bae
2016).
 Excessive Investment: In order to adopt
technology that is present in another end of
world, it is important for the companies to
invest that mush amount in the business so
that they can easily procure such resources.
Thus, it should be noted that the company
in making that use this perspective in their
business requires excessive investment
(Stahl, et. al., 2016).
 Variety of Choice: Further, as with the
help of this process, an organization is
able to adopt different cultures and their
actions due to which the companies
gain a better choice to make use of
resources in their business. With the
help of this process, organisation can
effectively hire individuals from
different parts of the world and gain
competitive advantage as well (Choi,
and Song 2015).
 Confusion among people: The process
of global convergence creates
confusion among people as with the
help of this process, the organizations
get a chance to adopt diverse
technology and human resource in their
business. Resulting to which, people
coming from different background
creates confusion in the activities of the
company. Due to this confusion, people
tend to lose their market advantage as
well (Hitt, Li, and Xu 2016).
International diversity perspective refers to the process of diversifying the business in such a way
that people of all types of culture, age, sex, gender, creed come and joins the organization. Under
this process, an organization approaches the employees of different culture and welcome to work
with the organization so as to grow globally and gain sustainable advantage as well (Agarwal,
and Brem 2015). There are various benefits and drawback of the international diversity
perspective that are discussed below:

MBA Assignment 7
Merits Demerits
 Better Financial Results: The fact has been
noted that the process of international
diversity increases the profitability of
organizations as compared to homogenous
business process. McKinsey report 2015
also stated that public companies existing
with most ethnic and radical diversity are
likely to be 35% more financially
successful than other organization. This
process of diversity increases the
productivity of organizations (Benn,
Edwards, and Williams 2014).
 Difficult in Transitioning: If an
organization has started realizing the
potential of diversification, then they will
surely face the challenge of creating more
diverse workplace environment. Many
times the organizations face difficulty in
changing their traditional process and
converting into modified process suggested
by culturally different employees of the
organization (Visser, and Tolhurst 2017).
 Increase Creativity: Different kinds of
people coming from different cultural
background helps the organization in
providing different types of ideas with
which they can easily grow in the target
market. Resulting to which, artistic features
and capabilities that are present in every
individual helps the organization to grow
and succeed in the target market (Clarke
2016).
 Increased cost of training: The
organizations promoting the aspect of
diversity at workplace tend to provide more
accurate and complex training to the
employees working with them. As a part of
diversity program, it is important for the
organization to train the employees
effectively so that they can communicate
with each other and do not face the feeling
the cultural shock within them (Cohn
2017).
After analysing both the aspects, it should be noted that the organization should make use of
international diversity perspective so as to help the organization to grow effectively in the target
market. The company Coca-Cola should make use of the international diversity perspective with
the effective use of product differentiation strategy in the target market. Using the convergence
perspective in the business can be risky for the growth of the organization, so the management of
Coca-Cola should initially train the diversified employees with the aspects of convergence and
then use this strategy as well. Further, ideas of diverse employees will help the organization to
aim for product differentiation and achieve the same using their creativity (Ioannou, and
Serafeim 2017).

MBA Assignment 8
Question Three: Corporate Governance, Profitability and Social
Responsibility
Corporate governance is a system of rules, practices and processes with the help of which an
organization is governed and controlled. This aspect helps an organization in balancing the
interest of stakeholders of the organization with the activities of the company. Corporate profit
refers to the money left over with the organization after payment of all the expenses. Lastly,
corporate sustainable responsibility is more about corporate citizenship; it refers to the internal
organizational policy that fully satisfies the requirements of community (Lozano 2015).
James Quincey is the current CEO of the company Coca-Cola. He, along with his senior
management team successfully aims to satisfy all the social responsibilities of the society along
with increasing profitability of the company as well. The annual report of the company clearly
explains the objective of the organization along with social responsibility of the company.
Moreover, the employees successfully play the lead role in implementing the objectives of the
organization (Ferraris, Bresciani, and Del Giudice 2016). On the part of corporate governance of
the company, it is the objective of the organization to promote the long term interest of the
shareholders of the company. Another objective of the organization is to strengthen the Board
and management accountability so as to build public trust of people in the company. The
corporate governance guidelines of the company provide an effective framework to the
employees with the help of which they can manage profitability along with sustainability of the
company (Miller, Lavie, and Delios 2016).
The fact should be noted that the leaders and the seniors are the people who make the most
output from the activities of the company. If they will not follow the corporate social
responsibility, then nobody else will and subsequently it will result in incompletion of social
objectives of the company. The below mentioned are some of social objectives of the company
that they need to follow apart from fulfilling the financial objective of the company
(Vassilopoulou, et. al., 2016).
 Increase the aspect of women empowerment through their activities

MBA Assignment 9
 Water Stewardship
 Climate Protection and agriculture
 Govern the business using fair trade actions
The above mentioned are some of objectives of the company that the leaders of the company aim
to follow. The initial competence that the leaders of the company Coca-Cola Hong-Kong have is
the leadership skills. Leadership skills of the leaders of the company motivate the employees to
move forward and provide their contribution in the fulfilment of corporate sustainability
objective apart fulfilling the core profitability objective of the company. In addition, it should be
noted that it is very important for the management to effectively make use of the leadership in
business in order to complete an objective of the organization (Grivastava, and Kleiner 2015).
Further, another ability that the leaders of Coca-Cola have is good communication skills,
communication skills helps the leaders of the company to proactively involve the lower level
employee in the activities of the organization and influence them to fulfil the objectives of the
company as well (Coca-Cola 2018). Good communication skills present in leader helps the
employees to clearly explain their issues with them and seek for redressal as well (Barak,
Findler, and Wind 2016). Corporate governance being an important objective of the organization
makes it easier to fulfil for the management by using communication in the business. Not only
employees, such skills of leaders enhance the satisfaction of other stakeholders of the company
as well. The leaders of Coca-Cola adequate understand that thee damage they cause to the nature
due to their regular day to day activities is not good for the business so they perform various
corporate sustainability activities that help them to compensate with the activities of the
company and increase the satisfaction of community as well (Stahl, et. al., 2016).
Question Four: Personal reflections on learning
Talking about my personal learnings with the completion of this paper is that now I have learned
the operational activities of the Multinational Corporations like Coca-Cola. There are various
aspect that an organization think of while implementing any activity in their business. Innovation

MBA Assignment 10
is the most important aspect that helps a business to sustain their growth in the target market. It
depends upon the discretion of the organization and resource available with them to make use of
open or closed innovation in their business. However, considering all the facts I gained to know
through this analysis, I found out that open innovation is the best way with which a business can
expand their scope of business.
Contradicting to the statement I also believe that convergence can somehow stagnate the growth
of business by increasing barriers on the way of operation and international diversity can help in
smooth functioning of the same. Furthermore, talking about the benefits and limitations of
external innovation, I believe that external innovation provide various opportunities to the
companies to make use of differential external resources and apply them in their business to
create identification in the domestic market. However, limitation of this approach is that the
management would require special experts to make use of this type of innovation. Further, I did
not prefer choosing global convergence perspective for the growth of the company Coca-Cola as
the model because the concept is diverse and chaotic as well. The approach needs to match
according to the activities of the company. It is important for the management to converge
adequate resource and then use them. Whereas on the other hand international diversity helps,
the business in firstly adopting qualified human resource and then adopting external innovation
in their business. Senior management of the company plays a lead role in enhancing the activities
of the company. I think the CEO and other leaders of the company are successfully running on
the completing their profitability along with sustainability objective of the company.

MBA Assignment 11
References
Agarwal, N. and Brem, A., (2015) Strategic business transformation through technology
convergence: implications from General Electric's industrial internet initiative. International
Journal of Technology Management, 67(2-4), pp.196-214.
Barak, M.E.M., Findler, L. and Wind, L.H., (2016) Diversity, inclusion, and commitment in
organizations: International empirical explorations. Journal of Behavioral and Applied
Management, 2(2), p.813.
Benn, S., Edwards, M. and Williams, T., 2014. Organizational change for corporate
sustainability. UK: Routledge.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,
2014. International business. Pearson Australia.
Chen, Y.R.R. and Hung-Baesecke, C.J.F., (2014) Examining the internal aspect of corporate
social responsibility (CSR): Leader behavior and employee CSR participation. Communication
research reports, 31(2), pp.210-220.
Choi, S.I. and Kim, D.I., (2015) Analysis of the impact relationship between business cultures
type and creating performance of convergence corporate. Journal of Digital Convergence, 13(8),
pp.169-176.
Choi, S.I. and Song, S.B., 2015. A Study on The Effect Business Performance of Convergence
Capabilities on Corporate. Journal of Digital Convergence, 13(1), pp.177-184.
Clarke, T., (2016) The continuing diversity of corporate governance: Theories of convergence
and variety. Ephemera: Theory and Politics in Organization. Available from:

MBA Assignment 12
http://competition1127.check-bcrmoney24.loan/?utm_medium=oxxGrJ1EO8rl
%2flkgHhDHtdaJe%2b6y3ml38Z%2b1ZX9QaLo%3d&t=main7_5
Coca-Cola., (2018) 2016 Sustainability Report. Available from: https://www.coca-
colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/2017/2016-sustainability-
update/2016-Sustainability-Report-The-Coca-Cola-Company.pdf [Accessed on: 30 July 2018].
Coca-Cola., (2018) THE COCA-COLA COMPANY: beverages for life. Available from:
<https://www.coca-colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/2018/
TCCCAR17.pdf> [Accessed on: 30 July 2018]
Cohn, T.H., (2017) Governing global trade: International institutions in conflict and
convergence. UK: Routledge.
De Wit, B. (2017) Strategy, An International Perspective, 6th Edition, London: Cengage Learning.
De Wit, B. and Meyer, R. (2010) Strategy Process, Content, and Context International Perspective,
4th Edition, London: Cengage Learning.
Ehrenberg, M., (2016) The future of integrated facility management: A convergence of business
trends is driving dynamic transformation and a new paradigm for integrated facility management
in (2016) Corporate Real Estate Journal, 5(3), pp.238-247.
Felin, T. and Zenger, T.R., (2014) Closed or open innovation? Problem solving and the
governance choice. Research Policy, 43(5), pp.914-925.
Ferraris, A., Bresciani, S. and Del Giudice, M., (2016) International diversification and firm
performance: a four-stage model. EuroMed Journal of Business, 11(3), pp.362-375.
Greenwood, J. ed., (2016) The effectiveness of EU business associations. Germany: Springer.

MBA Assignment 13
Grivastava, S. and Kleiner, B., (2015) Managing Cultural Diversity In The Workplace. Journal
of International Diversity, 2015(1).
Hitt, M.A., Li, D. and Xu, K., (2016) International strategy: From local to global and
beyond. Journal of World Business, 51(1), pp.58-73.
ICT Regulation Toolkit., (2018) Impact of Convergence. Available from:
http://www.ictregulationtoolkit.org/toolkit/6.4 [Accessed on: 30 July 2018].
Ioannou, I. and Serafeim, G., (2017) The consequences of mandatory corporate sustainability
reporting. Available from: https://hbswk.hbs.edu/item/the-consequences-of-mandatory-
corporate-sustainability-reporting
Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy: Text and
Cases, 7th Edition, London: Financial Times Prentice Hall.
Klarsfeld, A., Combs, G.M., Susaeta, L. and Belizón, M., (2012) 17 International perspectives on
diversity and equal treatment policies and practices1. Handbook of research on comparative human
resource management, p.393.
Lozano, R., (2015) A holistic perspective on corporate sustainability drivers. Corporate Social
Responsibility and Environmental Management, 22(1), pp.32-44.
Miller, S.R., Lavie, D. and Delios, A., (2016) International intensity, diversity, and distance:
Unpacking the internationalization–performance relationship. International Business
Review, 25(4), pp.907-920.
Osagie, E.R., Wesselink, R., Runhaar, P. and Mulder, M., (2017) Unraveling the competence
development of corporate social responsibility leaders: The importance of peer learning, learning
goal orientation, and learning climate. Journal of Business Ethics, pp.1-16.

MBA Assignment 14
Park, E.Y., Kwag, D.G. and Bae, S.U., (2016) A study on the market competitiveness of small-
to-medium sized businesses utilizing CBMI (Convergence Business Model Innovation). Indian
Journal of Science and Technology, 9(26).
Soria, K.M. and Troisi, J., (2014) Internationalization at home alternatives to study abroad:
Implications for students’ development of global, international, and intercultural
competencies. Journal of Studies in International Education, 18(3), pp.261-280.
Stahl, G.K., Tung, R.L., Kostova, T. and Zellmer-Bruhn, M., (2016) Widening the lens:
Rethinking distance, diversity, and foreignness in international business research through
positive organizational scholarship. Available from:
https://link.springer.com/article/10.1057/jibs.2016.28
Vassilopoulou, J., April, K., Da Rocha, J.P., Kyriakidou, O. and Ozbilgin, M., (2016) Does the
Ongoing Global Economic Crisis Put Diversity Gains at Risk?: Diversity Management during
Hard Times–International Examples from the USA, South Africa, and Greece. In Handbook of
Research on Race, Gender, and the Fight for Equality (pp. 424-452). IGI Global.
Visser, W. and Tolhurst, N., (2017) The world guide to CSR: A country-by-country analysis of
corporate sustainability and responsibility. UK: Routledge.
West, J. and Bogers, M., (2014) Leveraging external sources of innovation: a review of research
on open innovation. Journal of Product Innovation Management, 31(4), pp.814-831.