Globalization is defined as, “the process of social, political, economical, cultural, and technological integration among companies around the world” (Plavcan, 2018). The purpose of this paper is to discuss the aspects of globalization that allowed Coca-Cola to become a multi-billion dollar company. The economical and technological aspects of globalization will be discussed in relation to Coca-Cola’s success as these have had the largest impact on the company’s growth.
The economical aspect of globalization concerns how local and international economies interact with each other and the effects this interaction has at local, state, national, and international levels (Plavcan 2018). This aspect creates interconnected economies that are dependent on each other for various part of the economic and production processes. The economical aspect applies to the Coca-Cola company as it is an international company operating in over 200 countries. This provides a challenge for the oversight and management of these various suppliers and distributers around the world. In the video, Globalization & The Coca Cola Company, it states that Coca-Cola franchises out their work to various suppliers and distributors around the world (Jones, et al. 2009). This allows local companies, distributors, and suppliers to control production and distribution, energizing local economies and providing jobs. As the people working for the local companies in the various countries understand the economic situation of the country well, it makes the company more efficient and productive. By putting more money into the local economies through the creation of jobs, it allows the area to improve and provide more capital in the region, which could lead to further development by Coca-Cola in the future. Due to these franchises, the parent Coca-Cola company can focus its efforts in other areas, such as further development, rather than closely managing the various suppliers, companies, and distributors around the world. Related to that potential further development, the video states that Coca-Cola produces over “2,800 types of beverages” (Jones, et al. 2009). By expanding their beverage repertoire, the Coca-Cola company can reach a wider variety of customers and produce greater revenue.
The technological aspect of globalization concerns the advent of technology that allows for globalization to occur. Better communication technologies allow for quick communication internationally and the advent of video technologies let business meetings occur across oceans. Increasingly efficient transportation technologies let products developed and created in one country be shipped to another or multiple countries. As technology continues to change, innovation and the creation of the “next best thing” becomes paramount because a wider range of products from countries all over the world have never been so easy to obtain. It makes the field of beverage production much more competitive. However, Coca-Cola has been at the forefront of innovation and technological advancement since its creation. As mentioned previously, Coca-Cola has various types of franchises around the world, including suppliers and distributors. Globalization & The Coca-Cola Company states that by franchising out these portions of the company, it allows these companies to take control of their own revenue and spurs innovation (Jones, et al. 2009). Competing franchises spur new technologies within the company as each franchise tries to create the most efficient and cheapest way to produce or distribute their product (Jones, et al. 2009). By organizing their company in this way, Coca-Cola has created an opportunity for increasingly diverse innovation that works well within various countries.
By staying at the forefront of technological advances and innovation and creating a system of franchises in various countries around the world, the Coca-Cola company addresses the economical and technological aspects of globalization. Expanding with these globalization aspects in mind has allowed the Coca-Cola company to become the multi-billion dollar giant it is today and will continue to influence the company positively in years to come.