Question

In regards to multi-national corporation Coca-Cola, provide history of the organization (brief background into how the organization entered the international stage and how globalization has played a part in the organization’s growth). When creating the portfolio, you should provide examples of the types of transactions the MNC has made within foreign exchange markets and if there are netting arrangements the organization has made. You should also investigate the purpose of the company’s actions and what this will mean for them in short-term and long-term arrangements with other corporations.

Answer 1

Coca cola is 132 year old brand with widest presence and distribution chains across globe. First bottling plant introduced 1894 and fron thereon expanded globally and is currently present in all countries except Korean and Cuba with varied products line.

Company uses multi domestic strategies and transnational both depending on markets and preferences of consumers. The organisation has made various entries through FDi and foreign exchange markets has huge impact because of devaluation of chinese currencies which make US exports costlier and thus hurts Coca Cola. It has various long term fixed contract using hedging strategy to averse risks and losses due to exchange in currency and fluctuating trends.

In short term the company uses various arbitrage positions to make maximum profit in emerging markets and invest in newer markets with high growth.