Going Global: Does everyone do it right?

Globalization is the process of internationally integrating cultures, goods, technology, information and various other things. Today we are going to look at two different organizations attempting to go global and whether they have succeeded or not.

There are two types of strategies that help companies go global: Internal strategies and external strategies. Internal strategies include exporting, direct investment, e-commerce. External strategies include joint ventures, strategic alliances, franchising, mergers and acquisitions. Most big multinational companies use a combination of strategies.

Let's look at the organization known as Tesco first. Tesco had decided to go global but it did not end up doing very well especially in the US. In the US, a new store by the name of Fresh and Easy was established, the store was a joint venture with Tesco. Fresh and Easy's CEO, Mr. Timothy Mason was asked to head all the operations. The investment turned out to fail. Why did this happen? Tesco's timing was unfortunate. The venture launched in 2007 when consumer spending was at an all time low due to the impacts of the recession. People were reluctant to explore new shops and spend more. Another reason was that Tesco was unable to judge the consumer demand properly. The incorporated US recipes into their ready to eat meals but they did not realize that the culture of buying ready to eat meals in supermarkets is fairly low in the US. Finally, Tesco did not assess its competition properly. They made a mistake by opening many stores at the same time in competition to wal-mart. What they should have done is open a few stores so as to have a pilot run and to study the US market and to assess their competition. In the end tesco decided to pull out of the US, a bailout which cost them 1.8billion GBP.

Decline in Tesco's US sales

Tesco's example was seen as an unsuccessful attempt to go global. However there is a company, which in my opinion has been the most successful in terms of going global. Coca Cola is one of the very few organizations whose products are available in every single country in the world with the exception North Korea. Coca Cola uses various strategies when it comes to global expansion. They have invested directly in Pakistan and India. During World War 2 the US military allowed Coca Cola to open 64 bottling plants which were secured by the military. Coke was distributed amongst the forces as they spread across the globe thus exposing it to foreign nations and markets. In 2012 Coca Cola went into a joint venture with France's leading recycler, APPE  by investing 6.5 million euros. The the purpose of the venture was to increase the amount of recycled coke bottles. In 2010, Coca Cola paid $12.3 billion to buy the biggest US bottling company to reduce costs. It has also started franchising in the US. Coca Cola also exports its products. If you buy Coca Cola from a UK supermarket it would be made in the UK but if you buy Coke in a restaurant it would usually be from somewhere else in Europe (such as France). This is done by restaurants as they get a cheaper rate on the imported Coke due the the EU trade agreements thus making it more attractive.

Coca Cola Consumption across the globe

Improvements in stock price as a result of expansion

There is one other thing that further enhances Coca Cola's global image. They have a very strong marketing department. Recently in Pakistan and India they launched a machine called the "small world machine". The objective of the machine was to promote peace between the two neighbouring rivals. The machine connected a random Indian individual to a random Pakistani individual, both individuals could see each other through cameras and would just say hello to each other and ask about their well-being. Another thing I personally like about coke is the amount of passion I think they put in their adverts. After watching their advertisements I feel the urge to have a can of Coke.

   

Coca Cola's Small World Machine

My personal favourite Coca Cola commercial

Coca Cola has achieved an enormous amount of success by going global. They have very simply done a great job in local and global markets. They have perfectly assessed all situations.