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
