The theoretical framework of the Internationalization Processtheory was developed by Wiedersheim and Johansson. This theory lays itsemphasis on the four aspects which are market commitment and knowledge, currentmarketing activities and commitment decisions. The major internalizationtheories that are implemented by a company while entering into any new marketare contract manufacturing and exporting and licensing. Licensing is consideredto be the permission granted by the proprietor owner to any foreign company tosell their product, which would otherwise have been forbidden. Franchise on theother hand is when any company undertakes the right to take the businessactivity, by using the company’s name. However, Joint venture can be totallydifferent from these two internationalization theories, as in this case acompletely new identity is created in which both the companies take an activerole.
Export can be direct or indirect. When the firm exports indirectly itoperates through the confirming house, buying a house or export house (Anon.,2015). However, in this case franchising can be a better option for the company.The company started giving away its bottling rights for a dollar each, whilemaintaining the rights of the syrup produced. This was the initiated of what isnow addressed as the Coca-Cola system of franchise partnership. Thispartnership with the bottlers is what led towards the internalization of thebrand. These bottlers are the public companies operating with the rights fromCoca-Cola such as Coca-Cola Enterprises, Coca-Cola Bottling Company, Coca-ColaConsolidated Bottling, etc.
It International Marketing 9 was in the year 2013,when the company updated its franchising model in Canada and US, making itsagreement with the American and Canadian bottlers and expanding its territory(Feloni, 2015). Coca-Cola has implemented all the theories of internalizationat some point of time. The internationalization strategies of Coca-Cola havebeen a success in the first place. The company exports the syrups to the bottleowner, who have the right of manufacturing the firm’s product. There are anumber of challenges that Coca-Cola faces while operating in the global market.In the developed countries, children may become obese due to the excessiveconsumption of CocaCola. These allegations are often addressed by Coca-Cola.As, once the CEO of the company gave the statement that children in thedeveloped countries are not obese because of the consumption of Coca-Cola but,they are obese because they do not take part in enough sports’ activities.
Healso added that company’s products, like diet Coke is healthy for children, aswell as the adults. The internationalization theories adopted by Coca-Colahelps it in facing the competition from the local companies. Competing in theglobal market exposes the company to local competitors (Mok, et al., 2002). Conclusion The global companies continuouslyneed to generate and sustain high profit levels, to create competitiveadvantage for the company. For example, Coca-Cola continuously needs to buildits brand image by adopting effective and successful strategies related to promotion,provision and advertising.
The distribution system of the company needsconsistent development and expansion. Coca-Cola has been doing thissuccessfully over the years with the help of its strategy of growth, enablingthe company in the development of its international market InternationalMarketing 10 leadership. The company over the years had successfully developeda global mindset which involves understating of different global cultures,utilizing work relationships and identifying and grabbing every globalopportunity.
