A critical analysis of the globalization strategy of a multinational Essay

A critical analysis of the globalization strategy of a multinational company (Coca-Cola) - Essay Example While conceding to the fact that internationalisation is a risky endeavour, international business theory has proposed a number of risk-minimising strategies and a set of recommendations for the constructive exploitation of globalisation for the purposes of profit maximisation. Needless to say, while some corporations have successfully implemented these recommendations and have substantially expanded their markets and financial returns as a result, others have not. This research looks at one of the corporations which has successfully reaped the rewards of globalisation: Coca-Cola. Drawing on international business theory, the study engages in a critical analysis of Coca-Cola's external and internal environments for the purposes of shedding light on its corporate strategy and the uncovering the determinants of its success. The analyses, which utilise Porter's Five Forces, SWOT and PEST, indicates that Coca Cola's success is a direct outcome of an internationalisation strategy which is deeply considerate of the particularities and peculiarities of the various national markets within which it operates. 1 Introduction Multinational corporations are popularly regarded as the primary beneficiaries of globalisation. In his defence and justification of this claim, Wartick and Wood (2006) highlight the immediate correlation between the removal of barriers to international trade and foreign direct investment and the growth and expansion of the global activities of multinational companies. While not disputing this claim, the fact is that multinational companies are not simply the primary beneficiaries of globalisation but the purveyors of globalisation. In other words, globalisation was spearheaded by globally-minded, expansionist corporations such as Coca-Cola. Indeed, as Wartick and Wood (2006) argue, corporations such as Coca-Cola, McDonald's, Phillip Morris, Nestle and several others globalised business through international expansion via mergers, acquisitions and franchises, prior to the inception of globalisation. The implication here is that Coca-Cola, among others played a seminal role in the glo balisation of the international economy and, indeed, designed and pursued global business strategies prior to the passage and subsequent enforcement of WTO rules. This perspective on the role of multinational companies in the globalisation process can be validated through a brief, albeit critical, review of the implications of multinationals. Understanding the role of multinationals in globalisation and the degree to which, if at all, globalisation impacted the strategies of MNC, is contingent upon knowing the meaning of MNC. Gershon (1997, p. 3) offers a very precise and concise definition of the concept, writing that a multinational corporation is "a nationally based company with overseas operations in two or more countries" (Gershon, 1997, p. 3). As may have been inferred from the introductory paragraph and as most are well aware of, multinational corporations are a significant part of the contemporary global economy and, without any doubt, its primary players. The power which multinationals command and the extent of their influence on the economy, whether at the national, regional or global level, is explicitly explained in Jacoby's (1984, p. 5) description of the multinational cor