Monster & Coca Cola Global Business
Regarding globalization process, the deal with Coca-Cola Company will provide many benefits to Monster. First, the Monster would benefit from distribution arrangements with Coca-Cola and its bottlers mainly in the United States and Canada. The arrangement would expand the company as well as help it negotiate long-term agreements. Based on the deal, Coca-Cola becomes Monster’s selected global distribution partner, whose recent distribution arrangements already agreed upon with bottlers in Norway and Germany (Watrous, 2015). This will give Monster access to new global markets due to the market coverage enjoyed by Coca-Cola Company. The deal was able to add two leaders from Coca-Cola to Monster – Kathy N. Waller and Gary P. Fayard, who were the vice-president and the chief financial officer of Coca-Cola Company respectively. The strategic move will enlarge the number of board members of Monster to ten, who would guide the effective strategic decision-making process at the company.
Most importantly, the signing of the deal opens the entire international system of Coke, which is useful for Monster to expand its growing brands across the globe. The international system includes the access to Coke brand image and capabilities in the expansion of Monster’s coverage in different foreign economies where Coke is present. For instance, Monster will be able to overcome political and regulatory handlers regarding forming strategic partnerships with different companies and firms across the world (Allender and Richards, 2012, p.324). Thus, Coca-Cola Company opens a simple way to enter into new economies. The deal between Monster and Coca-Cola Company would also expand the energy portfolio of Monster towards providing complementary product offerings in different markets. The new complementary product offerings will act as an opportunity for the company to access new geographies and new channels to supplying their products, such as vending and specialty accounts.
Monster will also be able to gain a competitive advantage over its competitors due to the benefits of global sourcing provided by Coca-Cola Company, which is recognized for its successful strong global marketing strategies. Thus, Monster will substantially benefit from the global sourcing and marketing capabilities of Coca-Cola Company. Monster will also be able to have longer supply chains, which leads to additional coordination and cooperation. The extended supply chain will improve integration of the production, marketing, purchasing, and logistics processes of the company. The integration will assist Monster in reaching larger market share within the beverage industry. The organization of supply chain calls for interfirm cooperation, which uses resources from international firms to accomplish its shared goals (Pendergrast, 2013, p.71). Monster and Coke will be able to share their supply chain objectives, which are useful in expanding the market supply of Monster’s products and brand to international markets. For instance, Monster does not have much coverage in Asia countries as compared to Coca-Cola Company.
Moreover, Monster Corporation will be able to gain new insights regarding strategic performance and alignment. Coca-Cola Company has recognized its strategic performance and long-term objectives. The deal will assist Monster Corporation to align its strategic goals with the expected success in the global market. Thus, the presence of strong strategic focus and networks is a crucial benefit necessary to expand the strategic potential of Monster Corporation. Coca-Cola Company will provide recommendations on the formation of successful strategic alliances. Therefore, Monster will rely on the supply chain of Coca-Cola Company to improve their supply and delivery of their products to different international markets.
Within the deal formed between Monster and Coca-Cola Company, Monster gains both advantages and disadvantages. One of the main advantages is that is the nation’s largest traded energy drink company regarding annual revenue. The ability to become the largest traded energy drink gives Coca-Cola a level of confidence and creativity to expand its product portfolio. To maintain its market position, Monster has several consolidated subsidiaries, which take part in the manufacturing, production, and distribution of various products. With the expected growth of the economy, Monster is projected to outperform the overall market position. According to Pendergrast (2013, p.70), the energy drink segment has experienced a surge in the annual revenue. The revenues explain another advantage of entering into a deal with Monster Corporation. It would increase the overall profitability and revenues of Coca-Cola Company. Thus, the market creativity and expansion of Monster corporation ownership of various companies was critical.
Additionally, the corporate strategy of Monster Corporation is a major crucial advantage to Coca-Cola Company as it involves the development and marketing of new products as well as expanding into international businesses and markets. The company has been able to develop healthier drinks with low calories, which meets the needs of consumers in the current market. In the beverage industry, the companies are struggling to deliver products, which are healthier regarding calories. Monster Corporation has a competitive advantage concerning the production of healthier drinks, which it has already started producing. The total sales of healthier drinks have been increasing at higher rate as compared to unhealthy drinks in the market. It could also discuss corporate social responsibility efforts of Monster Corporation. Finally, Monster has also been a part of the international system from 2008. Its experience regarding performance and entrepreneurial culture will assist in expanding Coca-Cola brand further and expand its strong product innovation. Both companies would benefit from the deal, thus creating a more sustainable value for the customers and companies. The aforementioned are the main advantages of Monster Beverage Corporation regarding the deal between Monster and Coca-Cola Company.
In contrast, some of the disadvantages include that the company lacks a strong global presence. Monster Corporation is only a national company, which has supply chain within the United States and Canada. Coca-Cola Company would only benefit with the domestic supply chain of Monster Corporation, which would not influence their revenue growth. Thus, the lack of command of the global presence of Monster Corporation compared to the other beverage companies is a major disadvantage on the way to success and long-term benefits it would offer in the deal formed with Coca-Cola Company. Another limitation of Monster Corporation in the deal with Coca-Cola is its limited product range. Unlike the other beverage companies, Monster Corporation has a few product offerings, which limits its competitiveness in the market (Watrous, 2015). Thus, Coca-Cola Company would only benefit from emerging and strong culture of the company to expand its product portfolio. In spite of its limited product offerings, Monster will be able to develop new products offerings from the long-term deal entered with Coca-Cola Company, which has a wider product offering that places the company at the center of the beverage industry across the world. As a result, it is clear that Monster Corporation gains advantages and disadvantages, which could be useful in enlarging success of the energy drinks industry.
The deal would increase the global leadership of Monster in the global beverage industry. The deal improves market capabilities and access to international markets important to improve the global marketing position of Monster. Global leadership entails diversity and expansive strategies and systems to reach the wider global audience and markets. The deal offered a wealth of management and leadership experience useful in the expansion of the company’s culture onto the global level. For instance, Monster was able to obtain two senior and experienced executives who would become board members. The two executives provide an additional experience and strategic insights towards expanding the global positioning of Monster in the current competitive beverages industry. The current beverages face strong competition from other small, but innovative companies, which continually develops new products appealing to the market. However, Monster will gain additional advantage from Coca-Cola that has a strong brand and customer loyalty. Most of Coca-Cola customers will prefer to buy Monster products due to the strategic connection between the two companies. The main perception would be that both Monster and Coca-Cola operates under the same strategic values and mission to deliver quality products to customers. Thus, the additional experience and Coca-Cola’s branding will improve the global leadership of Monster Corporation in the current beverages industry.
The signing of the deal with Coca-Cola Company provided Monster Corporation with a unique opportunity for its shareholders to succeed in the global market. The company would have a better access to the distribution system of Coca-Cola Company. The distribution systems of Coca-Cola is recognized to be one of the most powerful and expansive system across the globe. Thus, the distribution network of Coca-Cola Company, which will be obtained by Monster Corporation, is one of the main factors which will improve the ability of the company to supply its products to different nations (Allender and Richards, 2012, p.332). Monster Corporation entered into the global distribution markets in 2008, and over the years, it has been able to contribute significantly and enjoy much success. However, it requires the distribution scale of Coca-Cola Company to improve its global distribution and to market its energy products. The process will expand the overall revenues of the company within the international markets. The global markets also require different brands and the nature of energy drinks. The acquired complementary energy products from Coca-Cola Company will also increase product offerings of the Monster Corporation to enhance its market positioning.
The deal also emphasized on the main core energy product portfolio through the benefits offered by the strengths and abilities of Coca-Cola Company’s powerful distribution systems on a global scale. It implies the importance and significance of setting clear and long-term strategies to enhance the overall performance of Monster Corporation in the global market. The strategic goals and objectives of the company also align with improving its market position towards becoming one of the global leading beverage firms (Steinhilber, 2013, p.201). This follows the presence of experienced leaders obtained from Coca-Cola Company. The leader also aims to develop strategic objectives and goals to improve the overall market position of Monster Corporation. Thus, the deal provides Monster Corporation with an improved strategic objective and goal to accelerate the growth of the company in the international market to improve Monster’s position on the global scale. For any company to become a global leader, it requires strong collaboration with major partners as demonstrates the deal between Monster Corporation and Coca-Cola Company. Therefore, Monster Corporation will achieve its long-term strategic goals of becoming a global leader in the energy drinks industry across the world.