Coca Cola\'s Localization Strategy When Most Multinational

Coca Cola's Localization Strategy

When most multinational corporations like Coca Cola enter foreign markets and implement localization strategy, they do it with reasons. As presented in the case, Coca Cola seeks to set up a corporate image. When it penetrates a local market, it replaces consumers' and government's collision. Implementation of corporate culture, personnel, marketing, and materials localization is useful in establishing the company's public image. The second reason is to dominate the local market rapidly. When multinational corporations enter foreign markets, they tend to lack understanding of the domestic market (Banutu-Gomez, 2012). This makes it challenging to keep up with development and changes of the target market resulting in the loss of vibrant market opportunities.

By implementing a localization strategy, Coca Cola could also choose local human resources to attain research and development, materials and marketing through observing the market via a local subsidiary. The company could be based on market changes and consumer demands in research and development to produce and dominate the local market. By engaging the localization strategy to be close to the market, Coca Cola will occupy a huge market share, which is its important goal (Banutu-Gomez, 2012). In addition, the actualization of management localization will assist Coca Cola Company use the local lower production costs, the comparative advantages of production, reduce inventory and save transport costs; this will be strategic in gaining a competitive advantage.

One of the main reasons for implementing a localization strategy is to reduce business risks. The rapid changes in the international business environment have forced Coca Cola to reduce risks by localizing its operations (Yunker, 2012). For instance, Coca Cola will comfortably adapt to the environment by enhancing the level of localization and integrating the legal and socioeconomic environment of the host country. This will augur with the economic and political situations. In the end, the communication between the subsidiaries and the head office will foster the development and survival of the Coca Cola Company. Besides, it will evade uncertainties while reducing corporate operational risks.

When Coca Cola implements its localization-marketing model, it will consider the localization of its human resources. The company acknowledges that marketing must be people-oriented. As for Coca Cola, its most valued sources of victory and wealth, is talent. The Coca Cola Company has achieved great success worldwide. This success has been attributed to its capital administration and commitment to people. Coca Cola believes the best employees are from the local areas, so the company will localize the senior management down to the general employees. Talent is Coca Cola's greatest wealth. It is fundamental in the implementation of personnel localization through an effective and comprehensive training program of developing local talents (Banutu-Gomez, 2012).