STRATEGY ENVIRONMENT FIT 4
Strategy Environment Fit
It is the role of the management of every multinational organizationor company to come up with strategies that will enable the businessto achieve its goals. Many businesses have found it extremelydifficult to adapt to the global business world. This is because theglobal business environment or what is largely known as theinternational business environment presents varying, political,social, economic, physical and cultural environment. The businessesmust come up with strategies that will fit into the internationalbusiness environment and enable the business to achieve its goals.Coca cola is one of the few multinational companies that has usedvarious strategies to adapt to the international business environmentand has managed to achieve its goals.
Coca cola, a multinational company which deals with soft drinks hasoperations in over two hundred countries across the world. It isclear that the company must use various strategies that fit into theenvironments of these countries in order to achieve its goals. One ofthe strategies by the multinational company is to think globally, butact locally. This is an approach that has made coca cola a house holdname in the over 200 countries that it operates in. The companyfocuses on the tastes and preferences of the local people and henceeasily wins the market. It is evident that over 80 percent of thedistributors bottlers are natives of the countries that coca cola hasoperations. This is a strategy that has enabled the company to havethe preferences of the locals at heart and therefore win their trust.Individual business people owning the bottling and distributioncenters also enhance the sales of the company. The element of buyingproducts from natives of a country creates the impression of a localproduct rather than a foreign product. This works extremely for thecompany especially in boosting sales.
Coca Cola Company has also employed the standardization strategymore than the adaptation strategy. This implies that the companysells products of the same quality and standard across the world.This has created a unique brand for the company across the worldwhich is extremely essential. However, it should be noted that thisstrategy for the company is flexible and the company can adapt to newcustomer demands. It is evident that the taste and the quality, aswell as packaging for all coca cola products are the same across theworld. Whereas the company uses the local bottlers and distributors,it is evident that the concentrated solution for the drinks isimported from the firm’s headquarters. It is evident from researchthat clients across the world are reacting to globalization by havinghomogeneous tastes and preferences for various products. Enhancedtravel and communication through technology has enabled thishomogenization of tastes and preferences. As a consequence, the cocacola company has standardized its operations and products across thecountries it operates and it is clear that this strategy has paid.The unique and consistent quality and products of coca cola havecreated a brand that is appealing cross-culturally.
The company has also shifted to the adaptation strategy in recentyears in a bid to meet the local demands for the clients. Forinstance, the 2006 famous campaign, “Live on the coke side of life”included some elements of local cultures. The company also producesdifferent sizes of bottle which are in line with the ones found inthe local markets. Research has also indicated that the company hasproduced some products which are specific to certain markets only.For instance, Soy Drinks are only sold in the Asian markets. This isa clear indication that the company is slowly shifting from thestandardized strategy and it is now shifting to the adaptationstrategy in the international market environment.
Pricing is another strategy that the company employs in theinternational environment. The company ensures that the prices of itsproducts are in line with the prices of other products that are inthe local market. When the local soft drink companies lower theirprices, coca cola lowers its price with the same margin. This hasbeen an extremely successful approach in penetrating new markets andaligning to the local environment.
Coca Cola Company has also learnt the importance of having employeesfrom the local countries that they operate. In other words, thecompany has strategized its human resource through employing peoplewho are familiar and have skills of operating in the local market.The employment of local people enhances the company’s brand in thelocal market. It is also clear that the company can use the localpeople to strategize on the best approaches to win the market. It canbe argued that the local people are aware of political, social andlegal needs of the country. This will help the company to operatewith the full knowledge of the environment and therefore achieve itsgoals.
It is abundantly clear that the company has used various strategiesin achieving its goals in the international market. Use of localbusiness men as bottlers and distributors has been a strategy thathas worked extremely well for the company in the internationalmarket. Additionally, the company has applied a standardized withsome element of adaptation strategy to fit into the internationalbusiness environment. It is also clear that the price strategy andthe use of local skilled employees have been strategies that fit tothe international business environment.