IB-7013 Global Marketing Environment: Coca-Cola's Entry Strategies

This essay explores the strategies multinational corporations (MNCs) employ to enter the global marketplace, with a specific focus on Coca-Cola's approach. It examines the reasons firms pursue global expansion, including increased sales, profits, and competitive advantages, as well as government incentives. The analysis delves into Coca-Cola's use of Foreign Direct Investment (FDI), joint ventures, network models, segmentation, and pricing strategies to penetrate diverse markets. The paper further discusses the relationship between foreign investors and host country governments, highlighting the importance of foreign investment for economic development. Finally, it assesses the impact of the Internet and e-commerce in facilitating MNC globalization, emphasizing the role of e-commerce in expanding market reach and enabling personalization. Desklib provides similar solved assignments and resources for students.

Running head: WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET
WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL
MARKET

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 2
Table of contents
Introduction......................................................................................................................................3
Describing and then evaluating why firms enter the global marketplace........................................3
Researching and selecting an MNC firm to analyze, synthesize, and discuss how your firm
applies any (and all, if applicable) of these strategies for market entry..........................................5
Analyzing, interpret, and discussing what relationships exist between a foreign investor and a
host country government and why are foreign investors important................................................7
Assess and evaluate the impact of the Internet and e-commerce in making an MNC global.........8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 3
Introduction
Since the phenomenon like Globalization companies have looked trading in diverse regions in a
different way. International trade has grown since the globalization emerged. Now firm wants
their presence and operation in diverse countries. Expansion of the companies since the
phenomenon has been enlarged and the business environment and the scene of the global market
changed and become diverse. In the current assessment, there will be discussion over the how
Multinational Corporation approached the global marketplace in changing the environment and
what the strategies used by the company. The assessment also discussed how e-commerce has
played a significant role in making MNC companies Global.
Describing and then evaluating why firms enter the global marketplace
Firms enter into the global markets to enjoy new export opportunities and the growth of their
firms. Companies decide to enter the global market for a different of reasons, and at the time of
entry in the global market, these different reasons need a variety of strategies and performance
goals. Generally, every company follow standard development strategies to enter the global
market. The most common method of market development is referred to as ‘increasing
commitment’ in which a company enter in the market with the help of an independent local
partner (Hanson et al. 2016). This strategy minimizes the risk of companies while they enter the
new market and country. And this will also help companies to build a business in the country-
market as quickly as possible. There are many more reasons why companies enter into the global
market which are as follows:
1. Growth or increase in sales: When an organization enter into a global market then this
will help them to increase their overall revenue. If the company has a unique product or

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 4
services or any technological advantage which are not available to international
competitors then this will result in their business success.
2. Growth and increase in profit: When a company enters into a global market then there
sales increases and if the sales increases then the profit of the company will also increase
as profit is directly proportional to sales. Because if the company is selling a unique
product or they have any technological advantage then price pressure is far less.
3. Competitive strike: Sometimes a company enters into the global market, not because of
the positive characteristics of the country which was identified in the market assessment
product but because their competitors have moved to that country-market. This scenario
is known as the follower move. In this scenario, the company enters into the new
country-market because a major competitor has done so (Wunderlich, 2016). One more
scenario which was frequently seen is ‘offense as defence’. In this scenario, a company
enter into the home market of the competitors because they have also entered into their
home market earlier.
4. Incentives provided by the government: It is commonly seen that the government
incentivize i.e give cash to their country’s companies to export. Every government offers
a wealth as a help when a company decides to begin exporting and enters into the global
market. To help the companies or exporters to grow their business, Small Business
Administration provide a guarantee loans of $50,000 to $100,000 as an export working
capital program (Cabello et al. 2016).

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 5
Researching and selecting an MNC firm to analyze, synthesize, and discuss
how your firm applies any (and all, if applicable) of these strategies for
market entry
Coca-Cola has been Pioneer MNC firm which has operated in the global circuit from over
decades now. The company had some very effective and efficient strategies which it follows in
market entry strategy. It can be said that the firm has diversified it's operations and are of trade
through the effects of FDI, Joint Ventures and Network model. The following strategies of
Coca-Cola to enter international markets are discussed below:
1. Foreign Direct Investment: Coca-Cola has effectively used the FDI strategy to enter
foreign markets through efficiency (Krugman, 2017). It is one of the biggest investment
sources which can be done in a foreign country. FDI mean the company directly invest in
manufacturing and service faculties of another nation to get directly engaged in the
overall economy of the nation. Through such there is a good relationship between Coca-
Cola and country in which FDI is made this helps Coca-Cola to build a good reputation
with government of the country making the entry prominent and effective nature. It can
be said that through use of FDI the company creates support from the market force on the
country which directly helps the company to enter the market (Obstfeld, 2015).
2. Joint Venture: Joint venture has been an effective tool through which many companies
have exposed in different countries and areas. Joint venture makes it's easy for a company
to enter a specific market to operate efficiently with proper support of a company which
belongs to that particular region. Coca Cola has also used the strategy of the Joint venture
in order to enter different countries within Asia. It can be said tha Joint venture is an
effective way through which Coca Cola got associated with domestic companies in Asia
and entered that particular market. In this way the both the companies in the joint venture

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 6
were benefited which helped in the overall market entry of Coca-Cola. Coca Cola in this
way got support of domestic company which know s about the market factors and
assisted Coca Cola to settle down in a different market. In this way Coca Cola effect
entered a diverse market in Asia which helped the form to expand in different regions of
Asia (Coker, 2014).
3. Network Model: The company also used the Network model in order to expand in
different countries. It is to be mentioned that under the network model the company use
to create a good amount of network within the country before entering the market. This is
done by forming an alliance with an another company and support the latter in there
operational activities which then helps the company support with there operation within
the nation. Coca Cola formed alliance with various company providing them financial
and technological support in turn on which the company was helped in entering the
nations market (Wright, 2016).
4. Segmentation: Coca Cola has also used the segmentation strategy to enter global markets.
It is to be said that segmenting in accordance to the geographic, demographic and
Behavioral elements was done by the company to enter a new market for knowing the
needs and demand of the population with that particular market (Robertson, 2017).
5. Pricing strategy: The company also used the pricing strategy in order to enable the form
to make the products of the company available to every class of the population which the
country expanded this increased the consumer base of the company globally.
6. Product strategy: It can be said that the range of products and beverages which is offered
by the company is diverse which the company has used as an ideal tool to expand in

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 7
different parts of the world. In this way, the company has expanded in different areas and
attracted customers building an effective consumer base there (Mowforth & Munt, 2015).
In this way, the company has evidently made sure that it expanded in different countries and stay
efficient in the global market. The strategies of the company helped the firm in encountering
changing global marketing dynamics and environments. The strategies have also helped the firm
ins knowing the market factors in different regions to make sure that the company effectively
enters the different market.
Analyzing, interpret, and discussing what relationships exist between a
foreign investor and a host country government and why are foreign investors
important
From the viewpoint of a macroeconomic factor, investment is a significant element which is
needed in the economic development of an organization (Rupert & Smith, 2016). It can be said
that Foreign investment within a country plays every important role in the overall economic
development of country. There is a direct relationship between economic growth of the country
and its Foreign Investments. It can be said that when the investments are high the economic
growth is very high. The host government is also very inclined toward the rate of foreign
investment which will be done as this will help the government in performance better economic
development of the country based on such investment the countries develop policies for their
further economic growth (Kollman, 2016). Hence it can be said that Foreign investment has a
direct relationship between foreign investment and host government and they are very important
for the economic development within an organization (Intriligator, 2017).

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 8
Assess and evaluate the impact of the Internet and e-commerce in making an
MNC global
Internet and e-commerce are defined as digital enable a commercial transaction between and
among the companies or organizations. The commercial transaction which is classified as
electronic commerce is digitally enabled and this is known as e-commerce. There are many
unique features of e commerce technology which are as follows:
1. With the help of the internet and e-commerce, a company market size pottential is equal
or equivalent to worlds online population (Cohen, 2018).
2. A company can deliver their product with their richness and complexity without any
compromise.
3. An organization can deliver the products to their specific targets like a person, groups or
any region. Which means e-commerce and internet enable personalization and
customization for the companies.
4. Internet and e-commerce allow enable ubiquity for an organization and makes them
globally avail at all times.
Internet and e-commerce provide a global marketplace for MNCs which means that the
marketplace of the multi natinal company is extended beyond the traditional boundaries and time
are eliminated. A success of the MNCs with the help of e-commerce are totally dependent upon
the e-readiness of its destination or host country. There is also a cross-border e-commerce and it
can be classified into B2B, B2C and C2C forms which standard for Business to Business (B2B)
eg. perfect commerce, Customer to Customer (C2C) e.g. Olx.com and Business to Customer
(B2C) eg. 1800flowers.com respectively. The internet and e-commerce does not grant or
guarantee the oversee success but it only can ease the process of going global (Cramer, 2017).

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 9
Conclusion
Concluding in the light of above context it can be said that global expansion and globalization of
MNC have been befitted through internet and ecommerce. The impact of globalization has been
positive of different MNC which have more freedom to conduct international trade. It is to be
mentioned that there is need to understand that an increase in MNC companies will help in
economic development of different countries and will facilitate the international market in
economic terms.

WEEK 5 - ASSIGNMENT: ASSESS HOW TO ENTER THE GLOBAL MARKET 10
References
Cabello, F. C., Godfrey, H. P., Buschmann, A. H., & Dölz, H. J. (2016). Aquaculture as yet
another environmental gateway to the development and globalisation of antimicrobial
resistance. The Lancet Infectious Diseases, 16(7), e127-e133.
Cohen, R. (2018). Diasporas, the nation-state, and globalisation. In Global history and
migrations (pp. 117-143). Routledge.
Coker, C. (2014). Globalisation and Insecurity in the Twenty-first Century: NATO and the
Management of Risk. Routledge.
Cramer, J. (2017). Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management:
Competitiveness and globalisation. Cengage AU.
Intriligator, M. (2017). Globalisation of the World Economy: Potential Benefits and Costs and a
Net Assessment. In Economics of Globalisation (pp. 85-94). Routledge.
Kollman, K. (2016). Same-sex unions: the globalisation of an idea. In The same-sex unions
revolution in western democracies. Manchester University Press.
Krugman, P. (2017). Crises: The price of globalisation?. In Economics of Globalisation (pp. 31-
50). Routledge.
Mowforth, M., & Munt, I. (2015). Tourism and sustainability: Development, globalisation and
new tourism in the third world. Routledge.
Obstfeld, M. (2015). Trilemmas and trade-offs: living with financial globalisation.
Robertson, S. (2017). A class act: Changing teachers work, the state, and globalisation.
Routledge.

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Rupert, M., & Smith, H. (Eds.). (2016). Historical materialism and globalisation: Essays on
continuity and change. Routledge.
Wright, S. (2016). Language policy and language planning: From nationalism to globalisation.
Springer.
Wunderlich, J. U. (2016). Regionalism, globalisation and international order: Europe and
Southeast Asia. Routledge.