Globalisation
The economies of the world are dependent on each other. The term globalisation has been widely accepted as the correct definition of the interdependence between the real economies. Globalisation happens when a culture or a business thrives beyond one region and affects a large part of the world. Several drivers have been associated with the advancement of globalisation, and they include technological advancements, international trade, as well as investing in international ventures. The drivers of globalisation compel producers to work towards meeting global consumer needs and in so doing end up producing globally acceptable goods and services. Innocent Drinks was founded in the UK but has risen beyond the odds to become a global company with its products being accepted worldwide. International trade has been crucial in making Innocent Drinks a global company with assistance being offered by the Coca Cola Company although other drivers such as technological advances have helped a lot in growing the company beyond borders.
The movement beyond borders is the basic strategy that defines a company that is moving towards growing globally. A company has high chances of being recognized across borders if it engages in business across the country. However, a company might enjoy the benefit of globalisation from the comfort of its country of origin without necessarily having to move across borders. For example, a company could have its products being noticed by international tourists who later carry information concerning the goods to their countries of origin. Investors from other countries could, therefore, get interested in the products and move into the country and make the products globally noticed. Innocent Drinks Company, however, did not enjoy such an opportunity and had to move across borders in a bid to market its products internationally. The globalisation of Innocent Drinks was a process and was at times suffering setbacks that almost brought it at a close-down.
International trade was the main driver of globalisation behind the success of Innocent Drinks. In 2007 and 2008, the world was hit by the global financial crisis (Lins, Servaes & Tamayo, 2017). The recession was severe, and large companies were at the receiving end of the negative impacts. The luckier companies such as the AIG from the US received government financing to help them out, but several were left to survive on their own. Innocent Drinks Company was not spared by the crisis, however. The crisis came at a time when the company had just started its initiative to expand to entire Europe. The decision to expand was made owing to the high demand for fruit and vegetable products in Europe, and the company had chosen to exploit the opportunity. The initial decision was proposed by the managing director, Jamie Mitchell who only considered basic research to conclude that the European market was more similar to the British market than it was different. The British market was characterized by a ready market that led to the fast growth of Innocent Drinks. The Innocent Drinks Company was only in the market for about two years and had grown to a capacity that required global expansion. Expansion across boundaries is always costly, and Innocent Drinks Company realized that when it tried to expand to France and Benelux. The additional cost led to serious loses to the company, which was happening at a point when the global crisis was around the corner.
International trade was made accessible due to the advancement in technology. Innocent Drinks Company was able to contact most of its activities efficiently with the improvement in technology, and thus globalisation was sure to become a success. First, a global company requires an extensive customer network. The interaction with customers was made more manageable and effective by the advancement in the social media with Innocent Drinks reaching a vast population of customers through facebook and twitter. Detailed information that would be required by customers was published on the company’s website, and thus the company was assured of a long term customer network. The advancement in technology was essential in the progress of international trade as a driver of globalisation. For example, the company was able to create a good reputation and thus was getting more customers each day due to its marketing strategy and quality of products. The expansion and decision to venture into international trade were helpful for the Innocent Drinks Company since it created networks that later to help it out during the recession period of 2008.
The financial crisis was a significant setback in the globalisation process of the Innocent Drinks Company. Venturing into international business and expanding across the borders led the company into incurring extra costs that were more than the revenue that was being obtained (Samson, & Sheela, 2016). The Company was eventually unable to pay for its costs and was almost growing insolvent. The reputation that the company had built during its years of success, however, paid up, and other stronger companies were aware of the potential that would be obtained for investing with Innocent Drinks Company. One such company was the Coca Cola Company of the US that decided to acquire part of the Innocent Drinks Company as a way of helping it out of the crisis. Several shareholders were however not supportive of the idea and criticized the move with the concern being whether the companies operated based on similar ethical standards. The Coca Cola Company was, however, able to convince the critics on its intentions of helping Innocent Drinks out by conforming to the ethical standards that were already in existence. Innocent Drinks Company did not get lost as an acquisition by the Coca Cola Company as many had initially feared and was sure to resurface when the environment becomes conducive.
The Innocent Drinks Company is a global company, and that is proved by the activities that it is involved in across the world. First, the partnership with the Coca Cola Company proved that the Innocent Drinks Company had connections not only across Europe but also across the world. Partnership with the Coca Cola Company was a mutually beneficial venture, and both companies benefitted from each other’s structures. Also, the move by Innocent Drinks Company to sponsor the 2012 Olympic Games proved the extent to which the company was willing to expand to the international market. The marketing strategy during the Olympic Games was aimed at reaching potential consumers from across the world that would provide a future global demand for Innocent Drinks products.
In sum, Innocent Drinks Company is a global company that began in the UK. The journey towards globalisation was faced with several challenges, the main one being the financial crisis of 2008. Involvement in international trade was the main driver of globalisation that helped Innocent Drinks Company. The activities that Innocent Drinks Company engages in prove that the company is a global company.
References
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), 1785-1824.
Samson, M. S., & Sheela, M. V. P. (2016). GLOBAL MARKETS AND THE EVOLVING MARKETING 4P’S. RESPONSIBLE MARKETING FOR SUSTAINABLE BUSINESS, 100.