How Does Globalisation Impact Large Companies? The Example of Coca-Cola

Essay , 2017 , 7 Pages

Business economics - Offline Marketing and Online Marketing

This essay examines the question, how large companies are affected by globalisation. Special focus herein lies on the question how Coca-Cola is coping with its requirements and challenges.

In a first step, the concept of globalisation is defined and light is shed on its origin before, secondly, the way how Coca-Cola as a company has dealt, and is still dealing, with its ramifications is discussed.

Introduction

Globalisation is the process of increased political, social, and economic interaction and integration among people, organisations, and governments. Globalisation has increased as a result of advanced transportation and information technology that has made it possible to communicate and move easily across the borders. It has led to a significant increase in internal trade, exchange of ideas, and diversification of culture. Several high profile companies have taken the advantage of globalisation to expand their businesses in foreign countries. For example, Coca-Cola has expanded its business operations globally as a result of globalisation and recognisable brands around the world. However, despite its advantages, globalisation has had a significant impact on different stakeholder group of Coca-Cola. This paper discusses how globalisation affects different stakeholder groups of Coca-Cola.

The concept of globalisation originated from the need to enhance global interaction and integration in terms of political, economic, social, cultural and technological capacity. It was started to enable countries to interact freely and import or export their unique capabilities with other countries. Katerina and Aneta (2014) state that globalisation has contributed to the expansion of the world market since from a confined and more restricted market to an open and more integrated market where goods and services can flow freely. As a result, the concept of globalisation has greatly influenced normal business operation with several organisations being forced to transform their business process in order to meet the global market demands. These changes have made several organisations to remain profitable and relevant in the global market and to adopt global market strategies that enable them to remain competitive.

The concept of globalisation has been very vital for the Coca-Cola Company as it has enabled the expansion of their business in various countries around the world. Currently, as a result of globalisation, the company operates in over 200 countries around the globe serving millions of customers. Stakeholder is defined as a person, a group or an organisation with a direct or indirect interest in a company and that can be affected by the company’s decisions or policies (Ebert & Griffin, 2017).The major stakeholders of Coca-Cola include customers, employees, suppliers, and community – which are all impacted by globalisation in both negative and positive ways.

Customers are the most important stakeholders not only for the Coca-Cola Company but also in any modern corporation. It is essential that the company must emphasise on the customer as they are the foundation upon which company operation revolves and without them, the firm stand a high chance of failing (Ebert & Griffin, 2017).The company must, therefore, ensure that customer’s expectation is met and their needs and wants are satisfied. Globalisation has played a significant role among the customers of Coca-Cola by ensuring that the company’s products are always available at the right time and most convenient places (Katerina & Aneta, 2014). This is due to the fact as a result of globalisation the company has been able to open several branches around the world to ensure that their customers get access to their most favourite company product irrespective of their physical location.

In addition, globalisation has also led to increased competition, which is associated with reduced prices for customers as several companies aim to gain competitive advantage. Globalisation has enhanced interconnection between the company, which has enabled the customers to have a say on how the product should be designed according to their tastes and preferences. It has also led to the integration of technology, which has enabled the customers to search the web for more details about the Coca-Cola products thus has enhanced their decision-making process (Milovanović Barac, Andjelković, 2009). However, globalisation has also been blamed for its negative impacts on the customers where the company uses its brand equity to launch different products with substandard qualities in some countries.

Employees are essential group of stakeholders who are the driving force behind the company’s operation. The Coca-Cola Company employees are charged with the responsibility to create and deliver the company’s products to customers and to ensure that customer’s service is enhanced. Employees are stakeholder as they are directly affected by the organisation’s decisions, policies, and performance in terms of profitability or loss (Ebert & Griffin, 2017). From this perspective, globalisation has led to the expansion of the global market niche, which implies that there will be increased revenue and profitability. As a result, employees’ salaries and wages are likely to be increased hence their welfare and satisfaction which is likely to improve their service delivery (Ebert & Griffin, 2017). It has also led to the integration of the labour market thus has given employees a chance of working in foreign countries hence exposure.

However, globalisation has led to integration and interaction of culture at various workplaces, which has positively or negatively impacted the employees. For instance, the employees are able to learn a new culture and master the concept of cultural diversification, which enables them to manage each other irrespective of their cultural differences (Ebert & Griffin, 2017). Conversely, it has also resulted in cultural dilution where many employees have to learn a new culture and forget about their own in order to conform to globalisation. Globalisation also affects employees’ wages in a negative as a result of free movement policies where the Coca-Cola Company has sought to outsource cheap labour from people who are readily available to work for low salaries (Ebert & Griffin, 2017). This has not only denied qualified and experienced skilled labour opportunity to work but has also lowered their bargaining power in terms of salary and also leads to job insecurity.

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• Publication Year: 2017
• Pages: 7
• Catalog Number: V498867
• ISBN (eBook): 9783346023032
• Language: English
• Tags: does, globalisation, impact, large, companies, example, coca-cola