Group 1 analyzed Coca-Cola's strategy to increase sales in Europe. To do so, Coca-Cola engaged in foreign direct investment by building production facilities closer to European markets to lower costs. It also improved local factor conditions by replacing franchisers with local sellers, increasing advertising, and lowering prices. Coca-Cola modified its strategy in response to local rivalry by focusing on non-carbonated drinks, local tastes, and the "Think Local, Act Local" approach. As a result, Coca-Cola operates as a multinational enterprise through country-specific strategies and international partnerships rather than being dominated by one home region.

1. Group 1:
Camille TAPER, Federica MEMOLA,
Daniela VELEZ, Dina KAKULE

2. 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.

3. 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

4. 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

5. 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

6. Question 4: Is the Coca-Cola Company a
multinational 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

7. Question 4: Is the Coca-Cola Company a
multinational 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