Roberto Goizueta Switched From Localization Strategy For Global Standardization Strategy

It was in the Fordism era in the early 19th century where standardization was the most widely used strategy across the industrialized countries (Johansson, 2000). Henry Ford when he manufactured Ford Car, the company produced only black Ford. Standardization refers a company providing the same identical product across the globe (Keegon, 2002). Most of the time they are considered to be global brands (Johanson, 2000). Some of the example that could be considered global brands is Coca Cola, McDonalds or Amazon. However, they too have some degree of adaptation in taste or price when it comes to marketing in a different market.

Coca-Cola is sold in over 200 countries and had for years done very well in Brazil. A closer look at Coca-Cola's Brazilian market is presented in an article in the Thunderbird (published by the Garvin School of International Management), which delves into the profit problems that Coca-Cola had in Brazil in the early part of the decade of the 2000s. The article, published in 2004, points out that the fast growth of "off-brand" soft drinks, called tubainas, has taken away profits from Coca-Cola, and created huge marketing problems for the giant soft drink corporation. This review of the article, "Coca-Cola's Marketing Challenges in Brazil: The Tubainas War " written by Gertner, et al explores the issues that Coca-Cola has had to deal with in attempting to gain a bigger share of the soft drink market in Brazil.

This case study is the story of Coca-Cola, its history and the report about one of the most fascinating stories about the company this is still regarded by many as a mysterious case: “the introduction of the new Coke”.

The manufacturing and sales of Coca-Cola demonstrated the success of American industrialism and capitalism. John Pemberton, the creator of the beverage and the company, was able to find ways to increase the company’s profits by using different ingredients than the original cocaine-laced French wine. It was able to be mass-produced and sold at a profitable price, and more factories were built as the company grew in success. Soon enough, Coca-Cola had their competitors, such as Pepsi Cola. The company was able to fight them off by means of globalization, by using advertising and by getting sponsored by many. Even Coca-Cola’s failures worked in its favor, such as not being able to profit in the Soviet-bloc countries or the Middle East, because Coca-Cola still gained brand recognition. Pemberton’s venture with his company shows capitalistic values: he was able to control the industry of a major part of the United States through his prudent

Success in world competition turns on efficiency in production, distribution, marketing, and management, and inevitably becomes focused on price. The most effective world competitors incorporate superior quality and reliability into their cost structures. They sell in all national markets the same kind of products sold at home or in their largest export market. They compete on the basis of appropriate value- the best combinations of price, quality, reliability, and delivery for products that are globally identical with respect to design, function, and even fashion. If a company forces costs and prices down, and pushes quality and reliability up, while maintaining reasonable concern for suitability, customers will prefer its world-standardized products. The global competitor will seek constantly to standardize his offering everywhere. The strategy of standardization not only responds to the worldwide homogenized markets but also expands those markets with aggressive low pricing.

Coca Cola was focused on the globalization of its brand. Coca Cola has the widest variety in the beverage industry comprising of around 3300 products and it exists in almost 200 countries. Coca Cola has a global brand value and loyalty as compared to

Treating all of Canada as one market has many advantages. A company typically implements a global strategy when it wants to save money. A company can be more effective when it sells the same products to every market, because there is no extra time spent on differentiating the products per market, which means there are also no extra costs. Money is saved from buying in bulk and having a standard packaging. In return, the company can put more focus on the product and work towards changing and enhancing the product. The case states that the market share of Saralyn Mills has increased in each of the product categories in which it competes. By implementing a standardized strategy,

The multinational company that I have chosen is Coca Cola Company since it is a very popular brand and has been serving its customers for more then 10 decades and even after so many years its popularity seems to be increasing day by day which itself speaks about the company's remarkable performance. The Coca Cola Company is an American multinational corporation and manufacturer, retailer and marketer of the nonalcoholic beverage concentrates and syrups (Wright, 1999). It came into existence in 1886 and was invented in Columbus, Georgia by John Stith Pemberton. The current statistics of the company shows that it is currently operating in over 200 countries offering its customers over 500 brands with each day serving of more then 1.7 billion (Charles W. L. Hill, Essentials of Strategic Management, 2012). .Further more the Coca Cola Company is alone responsible for the 78% of the total gallon sales of all the beverages sold worldwide. The company is listed in New York Sock Exchange and is very popular in most of the countries especially United States of America, which alone consumes 47% of the total gallons, sold worldwide (Zurkuhlen & Meeker, 1987). The company headquarter is located in Atlanta, Georgia, United States of America and its current chief executive and chairman is Muhtar Kent (Charles W. L. Hill, Strategic Management Theory: An Integrated Approach, 2012).

This case describes the complexity of PepsiCo's competitive position in the Mexican soft-drink market during the late 1990's. Between 1993 and 1996 PepsiCo and Coca-Cola waged a classic cola war in Latin America. The goal for both companies was to gain market share and by the end of 1996, Coca-Cola had clearly won the Latin America cola war. In 1993 PepsiCo enjoyed a 42% market share in Venezuela thanks to the success of its bottling partner, the Cisneros Group but by the end of 1996, PepsiCo held less than 1% of the Venezuelan cola market. Following PepsiCo's anchor bottler in Mexico, Gemex, the case details the strategies employed by PepsiCo's senior management beginning in 1993 to expand its

The company known as Coca-Cola today was started in September of 1919, but the first Coke brand was served as early as 1886. Since that time it has grown to be one of the most globally recognized brand names with a stock value of $167 billion. Coke’s plan has always been developed with the future in mind. Right away the company realized that it was more profitable to manufacture the concentrate used to make carbonated drinks than to bottle it. From that point on they saw the entire world, not simply the originating country, as their desired market. It seems only practical that the company should pursue this agenda until conquered then focus the effort on expanding into different product lines. This logical

According to Schwartz (1997), Goizueta joined Coca-Cola at a time when the company was in trouble. Slowed by bureaucracy and with an eroding stock price, the beverage maker was slowly loosing its market share to rivals like Pepsi. An inspirational leader, Goizueta was able to turnaround the beverage maker and before his exit, the company had become one of the most recognizable brands in the world. His managerial style as Rowe and Guerrero (2010) point out was more intellectual than hands-on.

Coca Cola’s international achievement can be attributed to numerous of things, but in order to think globally one must first think locally. This is the main message that Coca Cola Company place huge emphasis on whenever they are entering a country. (Miller) Coca Cola has formatted its approach strategically using a tactical method, this is done to provide the appropriate marketing activities and beverage to its customers. As part of Coca Cola vision to taste the same around the world, they have chosen to standardize its product and manufacturing process. In Trinidad and Tobago the local name for Coca Cola is “Coke”. From the perspective of consumers the key conceptual categories are not the flavours and colas that marketer hold in high regard, but what we refer to locally as the ‘black’ sweet drink. (Miller) Trinbagonian’s are particularly fond of sugar and sweet products this is linked to the days of the sugar cane field. Coke came into Trinidad in 1939, while under the British Government. (Miller)

One of the company’s most popular jingles was known as “I want to buy the world a

Levitt explains, because of globalization, how the world is moving from the Era of Multinational Corporations to the Era of Global Corporations as the needs and wants of the worldwide customers are getting more and more homogeneous (Levitt, 1983) and they demand for more standardized products in terms of quality and price (Levitt, 1999). According to Theodore Levitt the companies who focus on a particular market in terms of providing value added products are most likely to achieve failure in this dynamic industrialized world and that’s why to survive with the competition in the market companies should focus on more standardized products by keeping in mind the different markets of the world and their common interest (Levitt, 1983, pg-6). The other main key point mentioned by Theodore Levitt was that the organizations should focus their concentration in knowing the requirements of the customers rather than presuming their needs by themselves and forcing the already manufactured

Reasons why corporations like PepsiCo. need to globalize their operations include a need for competitive advantage against rivaling companies, increase their economies of scale to lower their production and distribution costs in moving products into new and existing markets, entering new markets to increase brand image and brand loyalty, and to increase net earnings which can then be distributed as dividends for their stockholders.