As has already been mentioned in the case, one of the prime reasons for which Roberto Goizueta shifted from a localization strategy to a globally standardized one, was to reap the benefits of economies of scale. A localization strategy means that a company customizes its products according to the needs and tastes of the country in which they intend to enter. However, through a global standardization strategy the company offers the same product and therefore can even use the same advertisements across the world. Thus, it helps them save a lot of costs due to the economies of scale.
Although the globalized standardization strategy was quite famous during the time of Roberto, it lost its pace later on. This was primarily due to the emergence of a lot of smaller companies offering localized drinks to the customers. Eventually during the tenure of Douglas Ivester, Coca-Cola’s market share fell for the first time in its history. In order to recover from the losses made by Roberto, Daft decided to place more power into the hands of the local country managers. In other words he created a shift of 180 degrees in the strategy and believed that the marketing, product development and strategy for their products must be localized to suit the local tastes better. This was mainly influenced by their success in the Japanese market. Eventually, even the marketing campaigns were localized during his tenure. Unfortunately, Daft’s strategy did not work well either and Coco-cola experienced a fall in sales, yet again and most of the strategies were centralized again.
Isdell had adopted a strategy which included elements of both localization and also global standardization and therefore it included something of both Goizueta and Daft. Under his strategy the local marketing campaigns were guided by the central head office and so was the product development. However, the pricing, marketing message and product offerings were customized according to the needs of the individual country in which they intended to do business. One of the primary advantages of this strategy was that it allowed a certain degree of localization while at the same time the head office had significant knowledge and control over whatever strategy was being applied. A disadvantage is that the central office may not have much knowledge about the country and hence may have problems in understanding the marketing message of that country. Conversely, if more power is placed on the hands of the country managers then prices may be inappropriately fixed as result of which they may have to face instances of lost sales.
As is clearly evident from the evolving strategies of Coca-Cola, people nowadays want global products instead of having locally made ones. However, they also want the products to be more suited to their individual tastes. As a result of this striking a balance between the global standardization strategy and localization seems to be the easier way out. This strategy also seemed to work quite well for the company. They had replicated the success of their coffee beverage in the Japanese markets elsewhere as well. Apart from this, their minimal carbonated drink in the Chinese market also seemed to work quite well for them. Therefore, over the years Coca-Cola has been able to find the right balance of strategies which has also let them enjoy continuous growth.
Coca-Cola Case Study
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WowEssays. (2020, January, 26) Coca-Cola Case Study. Retrieved November 22, 2024, from https://www.wowessays.com/free-samples/coca-cola-case-study/
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Coca-Cola Case Study. Free Essay Examples - WowEssays.com. https://www.wowessays.com/free-samples/coca-cola-case-study/. Published Jan 26, 2020. Accessed November 22, 2024.
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