Group 1:Camille TAPER, Federica MEMOLA, Daniela VELEZ, Dina KAKULE
Summary• Desire to increase sales in Europe through steps, therefore:• PR Strategy “Act Local, Think Local”• Difference in consumption between USA & EU – US: 135L – EU: 45L• Concerns expressed by various government agencies (EU, UK, …)• Coke is trying to increase its local response• Hold its market share by understanding local differences.
Question 1: Why did Coke engage in foreign direct investments in Europe?• In order to improve the market position through several tactics: – Assembly, production and other facilities closer to the market where they are trying to sell results in lower expenditure for the company – Investment in bottling factories also closer to the market (local) – Increasing marketing expenditure (advertising) to increase awareness, and lowered the Coke price
Question 2: How did Coke improve its factor conditions in Europe?• Took several steps in various countries: Actions directly related to LLC (land labour &capital) – Replace local franchisers with market-driven sellers Eg: France: new marketing manager • Advertising increased & price lowered consumption increased Eg: England: New bottlers Cadbury Schweppes • Along with other marketing programs sales tripled Eg: Germany: Ditto to England’s strategy • Faster results Largest & most profitable market
Question 3: How is local rivalry helping to improve Coke’s competitive advantage? • Strong competition in Europe: US consumes more Coke then EU resulting in modification of their strategy: – Building new bottling plants – New marketing campaigns focusing consumers on Coke – As tea & coffee are more popular drinks in the EU, Coke is focusing on the development of non- carbonated drinks to address local tastes – “Think Local, Act Local” think more like its local potential consumers and try to tap into its tastes
Question 4: Is the Coca-Cola Company amultinational enterprise? Is it global? Why? • Yes, Coke is definitely a multinational enterprise: – Modifications of operations to meet local needs & marketing strategies developed per country – Have international partners that help to run the operation & does not report directly to the HQ on daily basis – Relies on team work and serves as a coordinator
Question 4: Is the Coca-Cola Company amultinational enterprise? Is it global? Why? • It is global the US and Canada occupy 1/3 of its revenue • Whereas EU & Asia (even though they occupy less of its revenue) they are equally important for the company • There is no specific region that dominates • Global View and Global Strategy