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0 Introduction The recent advent of globalization has caused many firms to adopt more collective approaches to maintain their competitiveness. Before discussing the process, impact and benefits globalization has on domestic firms, it is important to understand the definition of globalization. According to the International Monetary Fund (2008), globalization can be defined as the development of economic interdependence amongst nations worldwide by virtue of increasing amounts of cross border transactions in goods and services, uninhibited international capital flows and extensive flow of technology. As a result of this, more emphasis has been placed toward industries and individual corporations. 1.1 The process of globalization There have been differing views amongst academics and institutions regarding the elements that globalization comprise. For the sake of clarity, four common features of globalization will be highlighted and explained in relation to domestic firms. 1.2 Interconnectivity In the current environment, influence of economic entities has expanded far beyond its geographical region (Centre on Law and Globalization, 2013). Business transactions emanates freely to areas well prepared to produce goods or services efficiently and cost effectively. For example, Accenture (a global management consulting firm) has capitalized on the value of Business Process Outsourcing (BPO) with an outsourcing portfolio carried out across various industries in multiple locations around the world such as London, Italy, Delhi, Mexico City and Dalian, China to name a few (Accenture, 2012). This not only enabled increased connectivity amongst multiple regions but also enabled each centre to leverage on expertise from different countries with minimal costs. This model has been practiced by many companies which have achieved success domestically.

1.3 Heightened Competition The next element of globalization is the heightened levels of competition for consumers and other markets. Therefore, successful domestic firms can no longer feel as secure and dominant about their markets unless regulatory measures by the domestic government are in place. As a result, Cavusgil (2010) highlights that primary focus of academics and public policy makers has moved from business affiliations between countries towards dealings of individual corporations. Concurrently, firms will have the advantage of being able to have more freedom within markets to create and source the goods that it intends to trade whilst being able to capitalize on lower costs and advantageous tax as well as infrastructure environments (Harris, 2009). 1.4 Elevated Cross Border Transactions The third feature of the globalization process is the propagation of global transactions in the shape of foreign direct investments (FDI) as well as exports and imports. Considering that international financing is much more widespread now, domestic firms will be able to capitalize on favorable interest rates and currency markets with a strong exchange rate. With many academics citing enhancing productivity as a means of remaining competitive, domestic firms must be able to continuously strive to attain world class recognition (Cavusgil, 2010; Lim, 2010; Piasecki and Wolnicki, 2008). This can be done by benchmarking against best management practices such as Total Quality Management and Just-In-Time practices from model companies that started off successfully domestically before being a global player (Tatsumoto, 2011). Besides that, as a result of international transactions, firms must also be aware of the political, economic, legal and cultural framework of markets it intends of having dealings with. As a result, homogenous goods will no longer be suffice as adequate knowledge must be attained to be able to tailor to the needs of the modern day consumer whom have different needs and wants based on the markets (International Monetary Fund, 2000).

1.5 Transfer of Technologies The fourth facet of globalization to be discussed is the prevalent transfer of technologies between markets. According to Cavusgil (2010) and later by Abeles (2011), being a leader within the technology industry does not create a lasting first mover advantage. Seggie and Griffith (2008) as well as Tatsumoto (2011) add that firms have to able to leverage on their advantages rapidly before other firms are able to replicate the similar technology. One possible way to address this concern is to cooperate and form relationships with other companies at the forefront and leverage on each others expertise to form a competitive advantage over budding global competitors. According to Cavusgil (2010), by grouping resources, firms are able to form synergies for all elements of business such as research and development, project design, production as well as advertising methods. The process of globalization has changed the way business works. Firms can no longer rely on depending on domestic success but instead possess the capacity to face changes within the external environment. By leveraging on increasing connectivity, heightened competition, elevated cross border transactions and transfer of technologies, firms are able to maximize efficiency as well as productivity. Additionally, by consistently keeping abreast with the latest advances within the industry, they will be able to grow through the process of globalization and ensure sustained competitiveness within any selected industry

2.0 Coca-Cola going Global It is the largest soft drink company and is the leading producer and marketer of soft drinks (The Times, 2013). The Company markets four of the world's top five soft drinks brands: Coca-Cola, Diet Coke, Fanta and Sprite. The success of coca cola involves around the five factors which the is the uniqueness and well recognised brand because it is one of the most recognised trademarks around the globe .Next, Coca-Cola provides the best quality for their customers .Then is the global availability which is bottled and distributed around the world .Finally, on-going innovation is continually providing the consumers with new product offering. For example, diet coke and vanilla coke. The Global Strategy that Coca-Cola is using currently is International Strategy. International Strategy is the organizations objective that relate to primary towards the home market (Lynch, 2010). However, there are some objectives with regards of overseas activity and therefore international strategy is needed and it developed mainly in the home market .Companies should go ahead of this strategy include P&G , which always developed and innovate new products and transferred to products on the market. Coca-Cola applied international strategy .Applying these strategies will help Coca-Cola to enjoy a very good brand image as well as creating cultural differences. Coca-Cola brags it not for its unique brand but for its attentiveness to the local market. For example, In Korea, a trendy young image that is revealed with the picture of young adults with modern attire to the website in Malawi that may include a mature woman dressed traditionally. (Gomes, 2012) 2.1 Weakness that Coca-Cola should addressed Coca-Cola has restricted weaknesses. However, they do have weaknesses that need to be issued if they want to take it to the next level. A mouth of a person is the strength and the weaknesses of the company. Good things will be said, but there will definitely an individual will have negative things to say about Coca cola as a company and the product they produce. Unfortunately, word of mouth is one thing that's difficult to control. People will have their own opinions on their negative comments, the company should strive and accessed their weakness and also ignore their word of mouth. 4

Coca-Cola faced many challenges in this 21st century is for the reason that the change in the market, social economic changes and globalization .This shows that no matter how good coca cola strive to globalization, there will be definite weakness that follows with them. 2.2 Lack of Popularity of Coca Colas Drinks They have been producing drinks such as Cola Classic; Diet Coke and Vanilla Coke .The Company has produced approximately 400 different types of drinks. Most of the drinks are unknown and didn't recognize by the company (CocaCola. These are the drinks are not bad but the problem is coca cola does not have a big promotion or advertising on this product .This will cause a big lost for coca cola if they do not big effort for this product. Coca-Cola should look into this matter as soon as possible. 2.3 Increasing concerns on Health Issues Popular products such as Coke has been a significant impact on everyones life especially teenagers .Coca-Cola contain a lot of gas and also sugar which makes it sweet. It is not beneficial to the human and also health. Research that has been conducted drinking too many soft drinks such as coca cola can cause diabetes and also obesity. This has cause inactive lifestyle by the teenagers. These trends have led Coca-Cola to use different towards its product. 2.4 Lack of Diversification Coca-Cola licences at least 500 brands moreover; most of its brands have different kind of beverages. PepsiCo has better diversified than Coca-Cola .The amazing thing is PepsiCos product mix (up to 2009) consist of 63% food and beverages 37% .Lack of Diversification will affect their sale and the demand of the beverages reduces.

2.5 Negative Publicity Coca-Cola has been receiving negative publicity for the past decade (Hai, 2011). This is because they are so successful and there are rivals not happy with them. Several midlevel employees rigged a marketing test for Frozen Coke done three years earlier at Burger King, Virginia. The outrage led to the departure of the head of Cokes fountain division and Coca -Cola issued an apology to Burger King and its franchises and paid them US$21 million. Moreover, Coca colas product is always labelled as fast food. Critics on CocaColas beverage mentioned that it has too much sugar and high calories. It is labelled as one of the causes of obesity rate in developed countries. This Negative publicity could bring a major impact to the companys brand image and companys growth prospects in the international markets. 2.6 Changing trends In the carbonated drink industry, PepsiCo and Coca-Cola. The trend now is that to move into healthier drinks and there is also a bigger threat for substitution facing Coca-Cola. The possible substitutes that Coca-Cola will face include coffee, tea, milk and juice. The company has taken a step to launch a product in the category of healthy drinks. 2.7 Rely On Third Party Bottling Partners Coca-Cola system of bottling partners which can be strength of the company is also weaknesses as well (Hai, 2011). This is because the company does not have the ownership of the bottling operations. The main objective of the coca cola company can be different from the bottling companies as each of them try to maximize profits. Depending too much on independent third party vendors can a major risk to the company. It is important that Coca-Cola to collaborate bottling companies so that it can improve their profit and good for long term planning.

2.8 Competition Coca-Cola has been faced with a lot of competitors and their rivals are Pepsi. Pepsi has been a major problem for Coca-Cola and they have one of the fiercest marketing ever. The marketing strategies between Pepsi and CocaCola have been straight and not afraid to mock among each other. Both of the products are similar because it is impossible to see the difference when you pour the coke and Pepsi into a glass. However, beyond that Coca-Cola versus Pepsi seems to be awesome battle which never ends. They are like the arch rivals to each other and Coca-Cola has been doing well in sales but you can ever take for granted by Pepsis way of doing marketing. 2.9 Environment The Business Environment of Coca-Cola has been changed significantly in the last few years (UK ESSAYS, 2010). Politics, technology economical is the main reason behind this. Coca-Cola has to change their strategies according to the times to survive in the global market .If Coca Cola failed to make these attempts they will be left behind. Coca-Cola has been having difficulties to operate because it operates in more than 200 countries which will cause its management structure to become weak. The company does not set its current goals but they only set their management goals. The lack of understanding of the environment has caused Coca-Cola to lose a lot of their profit. It is important for Coca-Cola to understand the culture and the environment of the place they want to do their business so that they can improve their profit and understand about their target market.

3.0 Global strategies pursued by firms There are four different global strategies pursued by firms, in order to compete in the global marketplace, such as the global standardization strategy, localization strategy, transnational strategy and international strategy. 3.1 Global Standardization Strategy Companies which follow the global standardization strategy would concentrate on raising the profitability, which is by collecting cost reductions that are obtained from the economics of scale and location economies, that also, if their business model is in accordance to following a low-cost strategy on a global scale (Jones and Hill, 2010, p. 260). Besides, this global standardization strategy sounds logical especially, whenever there are intense forces for cost reductions and when the demand for local openness is least. Furthermore regarding global standardization strategy, a company that follows this strategy, it locates its manufacturing at the worldwide location that will allow it to add to efficiency, excellence and innovation (Jones and Hill, 2010). It will also help to solve the problems of coordination and integration with its global value chain activities (Jones and Hill, 2010). Moreover, this strategy is also utilized to find a structure that lowers the bureaucratic costs associated with resource transfers of corporate headquarters and its overseas divisions. It also helps to provide centralized control that a global standardization strategy requires. For example using product global group structure. It uses to coordinate activities of a companys home and overseas operations. This divided into different functions at the optimal global location for performing that particular activity .For instance, Phillips has one product group responsible for R&D, manufacturing, marketing and sales of its light bulb, another medical equipment and so on (Jones and Hill, 2010). 3.2 Localization Strategy Companies which follow the localization strategy would concentrate on raising the profitability by tailoring the goods or services, in order to give an excellent match to tastes and preferences in diverse national markets (Jones and Hill, 2010, p. 261). Besides, firms that pursue this strategy believes that localization

is suitable when there are considerable differences across nations with regard to customer tastes and preferences and also where cost pressures are not really too forceful. Furthermore regarding localization strategy, this strategy makes operation with a global area structure. When using this structure, a company duplicates all the value creation performances and set up abroad divisions in every country that it functions (Jones and Hill, 2010) .The purpose of the worldwide evaluation, is to make proper decision about the capital allotment and to organize the transfer of new information among divisions. Besides, international companies can also be able to decrease interactions and transfer troubles as information can be broadcasted without any difficulties across countries, with mostly parallel cultures (Jones and Hill, 2010). For example, consumer choices concerning product design and marketing are most probable to be quite alike among countries in the same area than countries in the world region. 3.3 Transnational Strategy Companies that follow the transnational strategy will normally try hard to optimize the trade-offs linked with effectiveness, local adjustment and learning. This strategy does not seek effectiveness for its own purpose, but to actually attain global competitiveness. Besides, it also distinguishes the importance of local receptiveness but only as a tool for flexibility in international operations (Dess et al., 2010, p. 255). Furthermore, transnational strategy allows firms to simultaneously adopt both low-cost and differentiation. Furthermore examples regarding this strategy, companies such as Ford and ABB, which are considered as one of the worlds biggest engineering corporations, have put into practice this strategy and in return, have found it very difficult indeed. Besides, another example, Caterpillar required to battle against the low cost opponents such as Komatsu of Japan, required Caterpillar to seek for better cost economies (Jones and Hill, 2010). On the other hand, differences such as the construction practices and government systems across countries supposed that Caterpillar also had to be receptive to local demands. In the meantime, Komatsu and Hitachi, which are still devoted to Japan, have witnessed their cost advantages scatter and as a result, been trailing behind 9

market share to Caterpillar. To conclude this strategy, companies or organizations usually find this transnational strategy a difficult and demanding task. 3.4 International Strategy Companies that follow the international strategy would focus to produce worth by transporting priceless skills and products to overseas markets, where native competitors normally short of those abilities and products. Furthermore, when a company applies international strategy, it has an unlike route to international expansion (Jones and Hill, 2010). Usually a company transfers to this strategy when it only chooses to sell nationally made products in market abroad .For example, throughout the 1990s companies such as Mercedes Benz and Jaguar made no effort to manufacture in foreign markets as an alternative, they spread and sold their internally produced cars globally.

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4.0 The Benefits of globalization 4.1 Expend the market size Globalization helps to expend the markets size for the companys services and products. Numerous international companies are increasing its efforts to market their products and services to numerous countries such as China and India. For example Procter & Gambles success in achieving a fifty percent share in Chinas shampoo markets as well as PepsiCos exciting inroads in the Indian soft drink market (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012). Furthermore, expanding the company also increases the companys operations of scale which providing the company with a greater asset and revenue base which enables the company to achieve economies of scale. (Eyring, Johnson, and Nair, 2011) The advantage of gaining economies of scale is it helps the company spreading the fixed costs such as Research & Development over a larger volume of production. For example, Microsoft is operating systems in many foreign countries and sales of Boeings commercial aircraft (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012). 4.2 Taking advantage of arbitrage opportunities Globalization also benefits the companies by taking advantage of arbitrage opportunities. Arbitrage opportunities include purchasing something from where it is cheap and selling it somewhere where it commands a higher price or in other words defined by Graeme Pietersz (2012), is an opportunity to gain profit by purchase and selling the same good in different markets. For example, Walmart implement everyday low pricing strategy. In order to use this strategy, Walmart must able to obtain thousands of items it carries in each stores at the lower price. Walmart purchased the goods directly from China that worth $18 billion in 2004. By 2006, this had grown to $26.7 billion. Considers the indirect imports through its other suppliers, Walmarts total imports from China could be anywhere between $50 billion and $70 billion each year. At a conservative estimate, this represents cost savings of approximately $16 billion to 23 billion. These savings signify how much more these goods would have likely cost Walmart had the company purchased them from the United States. This is how Walmart gain profits from arbitrage (Source: 2010 Walmart Annual Report; 11

Ghemawat, 2007). The possibilities for arbitrage are not necessarily limited to simple trading opportunities. It can be applied to almost any factor of production and every stage of the value chain. For example, a company may locates, its manufacturing factory in China, its calls centers in India and its Research & Development in Europe, where the specific types of talented workers may be available at the lowest price (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012). 4.3 Extending the life cycle of a product The benefits of globalization are extending the life cycle of a product (there are four stages life cycle that is introduction, growth, maturity, and decline), when products has entered in its maturity stage in a companys home country but there have a potential larger demand in other countries. (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012) For example, Korean products such as LG and Samsung have determinedly pursued globalization to reach level of growth that would not be available in Korea. That goes the same for Dell, private computer manufacturer have fulfil the requirement in foreign markets to balance the growing capacity in the United States market. 4.4 Enhancing the physical location for every activity in its value chain Globalization is also help to enhancing the physical location for every activity in its value chain. Value chain represents s the numerous activities which all companies are obligate to involve producing the products and services. The value chain include main activities (marketing, inbound logistic, and operation), and support activities (procurements, human resource management, and research and development). Every company must make an important decision as where of these each respective activity will take place. Enhancing the location for each activity in the value chain can yield two strategic advantages that are enhance the performance and cost reduction. Performance enhancement for example Microsoft Company makes a decision to establish a corporate research laboratory in Cambridge, England. This strategic decision has provided Microsoft Company with access to best technical and professional talent. Location decisions can affect the quality in every activity is performed in terms of the availability of needed talent, speed of learning, and the quality of 12

external and internal coordination. Cost reduction for example one of the location decisions has founded largely on cost reduction that are Nikes Company where the company makes decision to manufacture the sports and training shoes from Asia countries such as Indonesia, China, and Vietnam. 5.0 The risk of globalization 5.1 Political Risk The risk of globalization is political risk which would affect a companys operation in a country due to uselessness of the local political system. Some of the countries across the globe may be dangerous which could affect the health of company initiative (Desna & Lumpkin, 2012). Forces are the source of political risk such as military turmoil, social unrest, terrorism and any violent conflict which could bring a serious threat to the company. Furthermore, another source of political risk is the rule of law where the country is lack of uniform enforcement of current rules which leads to arbitrary and inconsistent decisions by the government. This could definitely disturb the international companies to operate the business (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012). 5.2 Economic Risk The next risk of globalization is economic risk which would affect a companys operations in a country due to the economic policies and surroundings which include property rights of law and enforcement of those laws. For example of a company experiences this economic risk is the Microsoft Company which has lost billions of dollars due to the piracy or in other words counterfeits the software products in many countries, especially China which is famous in counterfeit (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012) 5.3 Management Risk Management risk is one the risk of globalization which could harm the companys operations in a country due to the problems that managers having in making decisions in the environment of international markets (Dess, Lumpkin, Eisner, Mcnamara, and Kim, 2012). Managers will faces the challenges of the cultural differences, language, level of the countries incomes, distribution system, and customer preferences (Dess, Lumpkin, Eisner, Mcnamara, and 13

Kim, 2012). Not only that, cultural symbols also may evoke the deep feelings. For example Coca-Cola makes several advertisements aimed at Italian travellers by turning the Eifel Tower, Tower of Pisa, and Empire State Building into familiar coke bottle. It was a great hit. However, when Coca-Cola has made a big mistake by making the Greeks become outraged when the company make Parthenon that crowns the Acropolis in Athens were turned into Coke bottles. The reason why the Greeks are angry because they referring the Acropolis as the holy rock, and a government said the Parthenon is an international symbol of excellence and that whoever insults Parthenon insults international culture. Therefore, Coca-Cola apologized to the Greeks. (Bekowitz, 2000)

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6.0 Conclusion It is important for Coca-Cola to always keep improving and find the solution for their weaknesses because the world today has been very competitive and no firm organization will want to be left behind. Coca-Cola should not take the weaknesses for granted because those weaknesses can even affect their business totally. Globalization has brought tremendous changes to the ways human communicate and work. The strategies to handle with globalization are not sufficient enough transform anti-globalization. It is important for every firm or even organization to be competitive because every firm are improving. Globalization has helped to bring the nation together but instead of widen the gap of the nations; it has only brought sufferings for the poor. Coca-Cola Company should do a lot of research and development so that they can have good distinctive competencies and other companies will not be able to imitate Coca-Cola.

(4,122 words)

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International Monetary Fund (2008) Globalization: Threat or Opportunity [Online]. Retrieved from: http://www.imf.org/external/np/exr/ib/2008/053008.htm [Accessed on 19 March 2013]. Jones, M. (2009), Globalization and Organizational Restructuring: A Strategic Perspective." Thunderbird International Business Review 44,325 351. Jones, G. and Hill, C. (2010) Theory of Strategic Management. 9th ed. SouthWestern: Cengage Learning. pp. 260-273. Lynch, R (2010) Global Strategy. [Online] Available at http://www.globalstrategy.net/categories/Whatisglobalstrategy [Accessed at 20 March 2010]. Pfister, Ulrich (2012). Globalization. Mainz: Institute of European History. Seggie, H. S. and Griffith, A. D. (2008) The resource matching foundations of competitive advantage: An alternative perspective on the globalization of service firms, International Marketing Review, Vol. 25, Issue 3, pp. 262 275. The Times, (2013) Creating an effective organisational structure. [Online] Available At http://businesscasestudies.co.uk/coca-cola-great-

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8.0 Bibliography Analysis: Dess, G., Lumpkin, G. and Eisner, A. (2010) Strategic Management. 5th ed. McGraw-Hill: International Edition. pp. 250- 255. Charles W.L Hill, Gareth R. Jones, (2008), Strategy in Global Environment, Strategic Management Theory, Houghton Mifflin Company, Boston New York.

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