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Mnc in the International Business Arena

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MNC IN THE INTERNATIONAL BUSINESS ARENA

Haotian Zhu

S3442975

 International Business

Tuesday 2:30-4:30


MNC in the International Business Arena

Globalization has been a key trend in the business world with most business strategies developed to develop businesses into global organizations. Globalization in business is understood to be synonymous with international trading since it involves selling of products and services across different nations. Globalization in the modern world entails the movement of goods, services, people, and information across the globe. Technology change has been the leading supporting factor influencing even the small businesses to participate in international trading. Globalization has led to increased competition in the marketplace pushing many businesses to expand their operation to withstand the increased and stiff competition brought about by the concept of globalization. The most successful businesses in the modern world operate in the global arena, illustrating the changing market and business operations. The core economic production activities of a firm are best thriving in the global arena. Therefore, multinational businesses are firms that have adapted to the globalization wave and are thriving in the highly globalized market. Coca-Cola Hellenic Bottling Company (HBC) that is headquartered in Switzerland is a top multinational firm in the globe illustrating the benefits of globalization of business in the contemporary business world. The discussion below will focus on the operation of the company in Greece and point out some of the challenges the business faces while operating in the international business arena. Coca-Cola HBC operations in Greece highlight the global aspect of the business as it has surpassed it home nation boundaries to exploit the international market.

Analysis of Coca-Cola HBC

Coca-Cola HBC is a multinational corporation by virtue of operating in another country besides where it was formed. Although the home country for Coca-Cola HBC is Switzerland, it has expanded its operations to operate in 27 other nations across three continents (Coca-Cola Hellenic Bottling Company 2018). According to Kennedy, Welch & Monshipouri (2017), multinational firms operate across different nations other than the home nation. This illustrates the status of Coca-Cola HBC as a multinational firm as it operates in multiple European nations and not just in Switzerland. Coca-Cola HBC is partner Coca-Cola Company based in the US and primarily the role of bottling the Coca-Cola brand drinks and distributing them in all the nations that it operates. Besides selling the Coca-Cola brands, Coca-Cola HBC also has its brands of beverages some of which are specific to the nation it operates (Coca-Cola Hellenic Bottling Company 2018). Coca-Cola HBC is the second largest bottling partner for Coca-Cola in the world, with the firm’s unit cases sold exceeding 2 billion. Coca-Cola HBC was given the rights for bottling the Coca-Cola brand in 1969 and in 2000, it acquired Coca-Cola Amatil, which was the European main Coca-Cola Company. This made it the largest Coca-Cola bottling and distributing firm in the entire Europe, which emphasized the global nature of the company. Although originally founded in Greece, the company headquarters were moved to Switzerland. The management of the now multinational firm is centralized at the head office in Switzerland although there is a head manager at each of the nations that it has operations. The multinational corporation shares are sold primarily in the London stock exchange with the Athens stock exchange being the secondary listing of the corporation’s shares. Therefore, Coca-Cola HBC is a large business firm operating across three different continents in 28 nations with a high possibility for further expansion given its successful market performance (Coca-Cola Hellenic Bottling Company 2018).

Globalization of business concept entails the expansion of markets into the international arena and the sourcing of factors of production from the global arena. The concept of globalization of business is about the growth of the business beyond the home country market and core production activities (Kopnina & Blewitt 2018). Globalization of business in the context of Coca-Cola HBC involves the company transcending the local market to operate in other nation state’s markets. As pointed out above, the firm served the market of 28 different nations highlighting its globalized market coverage. Globalization of markets has increased demand for the firm's products in both B2B and B2C transactions. The change in market trend is one of the driving forces of globalization of Coca-Cola HBC. The business activities of the firm are as well globalized in that they cover different nations. Production factors such as labor, capital, and land are sourced from different nations by the company to help in improving its competitiveness and effectiveness in production. The aspect of sourcing the factors of production from around the world is what constitutes globalization of production. The main aim of globalizing production is to help the business reduce its cost of production and contribute to improved quality of products. Combined, the benefits enhance the competitiveness of the firm in the market since it manages to offer the consumers high-quality products at a lower cost. Globalization of production supports Coca-Cola HBC ability to create local products as it has done in Greece, by utilizing the resources available in the nation. For instance, globalized production has allowed the firm to develop brands such as Amita, Amita Motion, and Amita Proino that are sold in Greece (Coca-Cola Hellenic Bottling Company 2018). Therefore, globalization of business concept supports the development of multinational businesses by providing them with expanded markets for operation and increased resources for optimal performance of various business activities. Based on the aspects of globalization of business, Coca-Cola HBC can be classified as a multinational company that targets markets in different nations and one that utilizes resources from different parts of the world. Globalization of markets and production aspects are evidence of a global business, which represents Coca-Cola HBC as one of the global firms by the fact that it employs the two aspects.

Host Cultural Analysis

Globalization of business to participate in international trading is affected by the cultural aspect of the nations in which the businesses expand. According to Saleem & Larimo (2017), Hofstede’s cultural dimension shows that each nation has different cultural practices that affect how business is carried out and how people perceive others. The difference in cultural practices and attitudes is a key factor influencing the choice of a country that a firm moves in to set its operations. According to Crane, Kawashima & Kawasaki (2016), culture is the shared beliefs, attitudes, norms, and practices by a group of people. The culture of the people in the internationalization process of the business influences the operations of the business and is a key determinant of the success of the firm in the new culture. Therefore, one of the main factors that influenced the decision of Coca-Cola HBC to choose Greece as its primary nation to expand is culture. The culture of the Greek people favored the growth of the business as it is easy to adapt to; hence, the managers of the firm have an easy time managing the new employees.

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