COCA COLA - INDA
Why TNCs go Global
- Labour costs may be lower, especially in LEDC countries.
- Manufacturing in the country is then sold, reducing transport costs.
- Legislation on working conditions and the environment may be less strict in some
countries, especially where governments want to encourage investment.
- Some countries may try to encourage multinationals to invest in their country by
offering lower tax rates and financial incentives e.g. Indian States have offered
subsidised water, land and tax breaks to Coca Cola to encourage them to locate in
their area.
- It widens your market and the status of your brand is raised.
- Producing your product in a country and adapting to the local market makes it seem
more local.
Evidence Coca Cola is a TNC
- Their Headquarters are in a MEDC - Atlanta, USA.
- The company sells over 400 brands in over 312 countries or territories.
- It is bottled in 200 countries across the world e.g. Kerala, India.
- Huge Profits of $24 billion dollars.
- It employs 71,000 people world wide.
- It owns 27 bottling operations and franchises another 17.
Advantages
Social
- The Coca Cola Foundation in India has spent over $10 million on community programmes, including
drinking water and sustainable energy projects.
- Coke has installed hand humps in Kaladera in India to help people get fresh water.
- TNCs bring technology to LEDCs that are not very advanced. They can also develop the infrastructure
such as roads to improve communication within and between countries.
- The company has set up a mobile trading unit for retailers, to provide them with skills on how to
display and sell their products.
Economic
- In Asia, even one Coke job creates another 10 in the local community.
- Coke employs 25,000 people directly in India. Coke in India indirectly employs 150,000 people
(positive multiplier effect).
- Coke has invested over $1 billion in India; it is one of its biggest inwards investors. This makes the
product seem more local.
- When entering the market, Coke brought the home grown brand leader
‘Thums-up’ - this remains the market leader, followed by Coke and Pepsi.
Environmental
- Coca Cola has invested in water harvesting schemes in India to reduce the amount they extract from
local water sources.
Why TNCs go Global
- Labour costs may be lower, especially in LEDC countries.
- Manufacturing in the country is then sold, reducing transport costs.
- Legislation on working conditions and the environment may be less strict in some
countries, especially where governments want to encourage investment.
- Some countries may try to encourage multinationals to invest in their country by
offering lower tax rates and financial incentives e.g. Indian States have offered
subsidised water, land and tax breaks to Coca Cola to encourage them to locate in
their area.
- It widens your market and the status of your brand is raised.
- Producing your product in a country and adapting to the local market makes it seem
more local.
Evidence Coca Cola is a TNC
- Their Headquarters are in a MEDC - Atlanta, USA.
- The company sells over 400 brands in over 312 countries or territories.
- It is bottled in 200 countries across the world e.g. Kerala, India.
- Huge Profits of $24 billion dollars.
- It employs 71,000 people world wide.
- It owns 27 bottling operations and franchises another 17.
Advantages
Social
- The Coca Cola Foundation in India has spent over $10 million on community programmes, including
drinking water and sustainable energy projects.
- Coke has installed hand humps in Kaladera in India to help people get fresh water.
- TNCs bring technology to LEDCs that are not very advanced. They can also develop the infrastructure
such as roads to improve communication within and between countries.
- The company has set up a mobile trading unit for retailers, to provide them with skills on how to
display and sell their products.
Economic
- In Asia, even one Coke job creates another 10 in the local community.
- Coke employs 25,000 people directly in India. Coke in India indirectly employs 150,000 people
(positive multiplier effect).
- Coke has invested over $1 billion in India; it is one of its biggest inwards investors. This makes the
product seem more local.
- When entering the market, Coke brought the home grown brand leader
‘Thums-up’ - this remains the market leader, followed by Coke and Pepsi.
Environmental
- Coca Cola has invested in water harvesting schemes in India to reduce the amount they extract from
local water sources.
