Week 7 Portfolio
Running Headlines: RESPONSE 1
Antonio D. McMillian
American Military University
BUSN601B005
April 30, 2017
1. Language is an important component of culture. International companies can find it extremely difficult without proper knowledge the nation's culture. Language plays three significant roles in marketing. First, it is used by business to obtain communication and information about the new market. Second, language acts as a connecting factor between the company and the local society. Thirdly, language plays a pivotal role when it comes to negotiations in business. The market representatives must fully understand the language of the community so that the negotiations can be successful. For instance, a manager for Coca-Cola must understand how to communicate with Chinese. Handshake must be soft and should avoid any other physical contact. The business card must also be exchanged on the first day. On the part of South Africa, a handshake is also the most common way of greeting and the manager must address people with surnames and titles.
2. The operations of the Coca-Cola as a Company in China cannot be considered as politically or economically risky. South Africa and the USA are largely capitalistic in nature. They allow for investment to take place from MNCs from other nations. The reason why the USA may not be entirely lucrative regarding investment is because the cost of production or manufacturing may be substantially high.
On the other hand, China for the longest time has been largely communistic. As a result, there are fundamental barriers to entry both instigated by the governmental or even by the status of the economy. Some of the barriers to entry for the case of China, labor is cheaper compared to other countries. In fact, China is one of the few countries where Coca-cola as a company gets cheap labor. China and US have a good political relationship.
3. With regards to the practices of the nations in allowing for globalization, owing to the capitalism in the South African government and US nation, the practices herein are largely effective in allowing for the development of globalization efforts of the MNCs.
The policies towards governance is that of transparency and checks and balances from other arms of government such as the judiciary and legislature. With regards to the competitive markets, capitalism allows for the free market, operations. This might not entirely be the case in the Chinese leadership, which may intervene on the market and set the prices or supply of commodities.
4. The company has not purchased the Overseas Private Investment Corporation (OPIC). I have not established in my research the case of Coca-Cola purchasing. However, this does not mean that the company has not ensured its business.
5. Coca-cola as a company has no patents but trade secrets. A trade secret is defined as information that derives independent economic value from not being readily ascertainable by proper means or generally known. Trade secret protection has no limitation of time, unlike patent protection. This means trade secret may continue to exist as long as it meets the definition of trade secret. The secret formula of Coca Cola is a classic example of a trade secret. More importantly, a trade secret is more beneficial than patent protection if the technology will be useful for a very short time. With regards to the judiciary systems, it is evident that the three nations have substantially strong judicial systems. But the influence of the executive on the Chinese judicial system may be significantly (Ikenberry, 2008).
6. With regards to property rights, a lot of Chinese property is owned by the government. On the other hand, private ownership is more prevalent in the American and South African economies. Corruption is a major issue in the three nations, with the Chinese having most stringent punitive measures (Bello, 2006).
7. The company faces both types of barriers to entry in the prospective target markets. There are particular trade barriers that curtail the expansion of the company. Some of these are the tariffs and duties on the importation of particular concentrate from the mother country (USA). Thus this is bound to drive the operation costs upwards. One of the social barriers to entry might be a restriction of the drink in particular institutions such as some religious areas. Largely the company faces the duties and taxes barriers to entry. The company has also focused on carrying out preliminary market studies before penetrating into the new markets. Competition is also another factor that the company puts into consideration. In my opinion, the company has the right market strategy in the three countries which are US, China, and South Africa.
8. Coca-Cola is a globalized multi-billion company that has spread its wings all over the world.
One of the trading blocks is NAFTA (North American Free Trade Agreement). This is where the US falls in, and the company benefits from being in the world’s biggest block economically. In South Africa, the regional trade block is SADC (Southern African Development Community). This is not such a huge block, but South Africa happens to be the biggest economy in the block. The other is ASEAN of which China is a member. It happens to be the third largest block in the world. China is the biggest of these nations. (Gereffi, 2010).
9. The impact of the social, ethical, global environment and stakeholders on Coca-Cola has grown stronger in the recent past. Corporate are charged with responsibilities of ensuring sustainability of the surroundings. The idea that started a few years ago as an awareness campaign has now grown and focused on the management of sustainability. Coca-Cola has not been left behind in the sustainability plans. Sustainability is one of the strategic issues which has shown far-reaching implication to most organizations around the globe(Foster, 2012).
The corporate public policy is defined as a firm's stance, posture, strategy or position about the social, global, environment, and ethical aspects of corporate and stakeholders. On the other hand, strategic management incorporates ethical, environmental, social concerns with full knowledge of the long-term viability of the said corporation. The strategic management requires the firms to adopt a different strategy in its operation. Sustainability is also incorporated into the corporate public policy.
Ethics is also another important aspect of the company's strategy world. This a challenge that most corporations must undergo not only in America but also other parts of the world. Some of the ethical issues are affirmative action, sexual harassment, product safety and employee privacy. This is a great demonstration that ethical issues cover wide areas that must be addressed. Coca-cola as a company has invested massive resources in ensuring that their employees adhere to ethical standards.
10. The mission for Coca-Cola tries to spell out the purpose of the organization. Their mission is simply to refresh, create value and make a difference. The company also focuses on inspiring moments of happiness and optimism. Mission statement plays a significant role in organizational ethics as they inform the public the basis of their ethics. They portray commitment for the organization to withhold their organizational ethics. It is like a foundation on which the ethics are formulated.
11. Coca-Cola as a company is a stakeholder orientation model. This is a business that strives to satisfy all the stakeholders from customers, suppliers, employees and shareholders. It does not just focus on making supernormal profits for the stakeholders. This is because of the many corporate responsibilities and program that the company has engaged itself recently.
12. Coca-Cola is a not stateless corporation. Most international strive to maintain "stateless status" as an effort to maintain a globalized outlook. Pledging allegiance to one country may not work well for the company such as Coca-cola. Currently, there are efforts to make it stateless.
13. Coca-Cola as a company is using flat organizational structure. Managers within the flat organizational structure are more influential when it comes to getting feedback on time than those in a hierarchical structure. To ensure that its business strategy works, a company must adopt an organizational system that is efficient. A company has can also develop the bottom up feedback and transparency culture. This is best achieved through the flat organizational structure as opposed to hierarchical organization structure. Moreover, decision making will be much easier due to centralized management system that will be in adopted. As a result, there will be no confusion which normally results from decentralized management system. Additionally, there will be effective coordination in running the operations of the business. The flat organizational structure seems to be effective for the business. This can be attributed to the fact that employees will be required to report directly to the managers who control a wide span.
14. The Company may benefit more from the hybrid structure due to its flexibility. Teams can easily be formed to address specific issues and then dissolved easily. This makes the organization to be more responsive to issues affecting the organization. The departmental barriers are also removed by the hybrid structure.
Reference
Adhikari, R. &. (2002). What will WTO membership mean for China and its trading partners?. Finance and Development, 39(3),, 22-25.
Bello, W. (2006). The capitalist conjuncture: over-accumulation, financial crises, and the retreat from globalisation. Third World Quarterly,, 1345-1367.
Foster, R. J. (2012). . Coca‐Globalization. . John Wiley & Sons, Ltd.
Gereffi, G. &. (2010). The global apparel value chain, trade and the crisis: challenges and opportunities for developing countries. Global value chains in a postcrisis world: . A development perspective, , 157-208.
Ikenberry, G. J. (2008). The rise of China and the future of the West: Can the liberal system survive? Foreign affairs, , 23-37.
Narlikar, A. (2010). New powers in the club: the challenges of global trade governance. International Affairs, , , 717-728.
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