Global Business - Coca-Cola Company - Case Study Example

Global business has consisted of transactions carried out and devised nationally to meet companies, organization and individual objectives. Foreign direct investment (FDI) and export-import trade are international business primary types. A multinational is an enterprise carrying operation in different countries but the management is in one of the countries (home country) and a company is known as a multinational corporation if it generates a quarter of its total revenue from outside its home country operations.

Coca-Cola Company based in Atlanta, Georgia is a global leader in over 200 countries worldwide. In order for Cocacola to enter into the Mexico market, it has to follow procedures which include: Foreign Direct Investment, Cocacola can make its investment through a joint venture or a merger (Czinkota, Ilkka & Michael, 2004). Direct acquisition or a merger with existing companies is mostly the straightforward procedure of new markets penetration applied by many multinational corporations. An entry like foreign domestic investment gives large multinationals, the advantage of the economies of scale and the size that it provides.

Cocacola has to put a lot of effort into an entry to the new market in searching for the product prices, the current market situation, be aware of the country’s laws and regulations. Managers should be aware of the political state of that country before any decision is made whether to enter the market.Pestle analysis outlines the various factors that can affect the managers’ decision in any organization. These factors are; Political factors, which are government policies, economic factors which include taxation changes, inflation exchange rates and interest rates.

Social factors which are social trend changes affecting the demand of a firm’s products, technological factors affect decisions because new technology brings new processes and new products, environmental factors include climate change and weather. Temperature changes bring an impact to tourism, insurance and farming (Czinkota, Ilkka & Michael, 2004).In conclusion, companies expanding to new ventures have to follow a number of procedures in order to start their business in their respective country.

Greenfield investments are good for companies because the market is new and maybe no other company has invested in it, therefore, the company makes great profits.