Coca Cola Case Study

MGMT 672 Planning and Execution of Strategy

Coca Cola

With approximately one fifth of the global population, China was a natural choice for Coca Cola to expand its operations and grow its business. In 1979 Coca Cola was able to reenter the Chinese market and since, it has developed itself into China’s most recognized and trusted brand. It has achieved this status through the implementation of an effective international strategy.

Coca Cola first entered China in 1920 and maintained operations up until 1949 when the political climate in the region forced the closure of its plants. It wasn’t until 1978 when the country began to allow outside trade and investment that Coke decided that it would once again set up roots in the region (Carpenter & Sanders, 2009). In 1979 it reestablished operations in China. In an attempt to increase profits substantially as well as to dominate the market share, Coke adopted an international strategy that focused on localization which they coined “Think Local, Act Local”. Each of the international units of Coke around the globe were empowered to adopt strategies and implement initiatives that would best suit their local region and thus maximize the effectiveness of the strategy at each location.

In order to secure its reemergence into the region, Coke had to adapt its strategy to conform to the external factors that were influencing the company when it first reentered the market in 1979. When it first reentered the market, Coke was forced to act as a wholesaler, selling its patented formula to bottling plants in the region who in turn would distribute the product. For years, Coke struggled since they did not have any management oversight of the plants that were bottling its product. In 1985, Coke decided to take an alliance approach as a vehicle for increasing its operations in the region. The reason they did this was to increase their management oversight of their product as forming the alliance would allow them to acquire...