For many years, Coca-Cola expanded globally by finding business partners in each

Question

For many years, Coca-Cola expanded globally by finding business partners in each country instead of creating its own subsidiaries. Coca-Cola shipped to its partners the concentrate made in Atlanta using the company’s secret formula. The partners then took care of adding water and carbonation, bottling, distributing, and selling the soda. Was this a good idea for global expansion? What are the advantages and disadvantages of this approach for Coca-Cola relative to creating its own subsidiaries or buying foreign soft drink companies?

Explanation / Answer

This was a good idea of global expansion.

The advantages of this approach are as follows:

The disadvantages are as follows:

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