The Journal The Authority on Global Business in Japan

ACCJ EVENT | DRINKS

June 2014
Thinking Locally, Acting Locally
Coca-Cola is finding new ways to respond to the changes they face
By Megan Waters

CokeHaving been with drink manufacturer The Coca-Cola Company for 24 years, Ahmet Bozer, president of Coca-Cola International, is in a good position to talk about managing the world’s most recognizable brand in an increasingly complex global environment. And this is exactly what he did at the ACCJ’s “Luncheon with Ahmet Bozer” at the Tokyo American Club on April 4.

“I think about how fascinating it is living in our time, as business people. If you think about the changes that are going on in the world, you will realize we actually live in a very special time”, said Bozer, who, in charge of Coca-Cola in all markets except the United States and Canada, spends a remarkable 70 percent of his time traveling.

Bozer believes that new, unchartered, and encountered demands are being placed on businesses, in term of their role in society. “We, as Coca-Cola, are trying to respond to the changes around us,” he explained.

So what does Bozer believe are these changes?

The first big transformation we are facing is that, according to Bozer, human beings are “very empowered.”

“An individual is now able to make so much change in the world. It used to be a much more defined world. Now all these powerful people can be connected, and can be easily organized.”

The second change is the “incredible demographic development” that is occurring worldwide, as a result of which more people are joining the middle classes and moving to cities. Although this benefits the company, other issues—such as pollution and declining quality of life—are arising.

“We are at a point in time where the demographic dividend that the businesses will benefit from is very high.

“When we did our 10-year plan a few years ago, our goal was to double our business. This means that what we have accomplished in 125 years, we want to accomplish the same in 10 years. This is actually possible, and is really what the opportunities out there are all about,” he said.

Bozer pointed out that economically, there is enormous wealth in the world. In many countries, however, there is a huge divide between rich and poor. And this is most worrying.

“It used to be a very defined world; you chose your side and you stuck with it. Now, however, we are in a multi-polar world and it has become very complicated, and this multi-polarization is affecting government policies.”

At Coca-Cola, they call this a “cross-winds environment.” But how does this affect them as a business?

“All these changes are putting an incredible pressure for change on all of us. People always ask us ‘as you are a global company, do you operate globally or locally? The subject of how we operate is all influenced by this,” he said.

In terms of branding, Bozer believes companies love to be in control, and to have the destiny of their brand in their own hands. However, the brand is really what the consumer makes of it.

“With the invention of social media, there are online conversations going on about us around the world, every second. That affects our brand. We were very quick to put together engagement centers that are all connected together so we can answer consumers’ questions.

“As the world gets more complicated, the government becomes, possibly, less effective. Or, maybe, people expect so much more from their governments that they can’t get from their governments. So they look to big brands instead.”

Coca-Cola has taken a very proactive approach; they have released public reports to be completely transparent in their policies and procedures with regard to human rights and corruption, for example, in Myanmar. For this, the brand has received many accolades.

Further, marketing used to be very different. According to Bozer, because consumer expectations of big brands, those like Coca-Cola, sometimes have to take a position of cultural leadership. They may have a point of view on a social issue, regarding which consumers believe the brand has a right to have a point of view.

Such social issues include sustainability. How, one might ask, can the brand play a role in driving sustainability initiatives?

“Our slogan used to say ‘we are a company that thinks globally and acts locally’. That only went so far, and we realized we needed to think locally and act locally.

“At the end of the day, we are a global company. We have to be locally relevant to the consumers in the 207 countries in which we operate,” he explained.
Coca-Cola found that they have to be locally connected with society in the countries in which they do business, to which end they have been trying to discover the best combination of what is local and what is global.

“I believe the answer is in changing the way we work and our culture. We have to have a culture of collaboration: up and down and sideways,” he said.
The company incorporates both a top-down view and a bottom-up view, which come together to form the final solution. However, it is very important to not take anything away from the empowerment of local people.

“The only way for us to continue to grow is for our local teams to feel they have a license to create a vision for themselves, to create a plan, and to follow it. Bottom-up and top-down collaboration is the only way we could achieve both objectives. Be relevant and well connected locally, but also take advantage of our global scale,” he said.

Finally, the third big force that is requiring Coca-Cola to change and do new things is the realization that, as the company is trying to be a force for good in the societies in which they operate. The social problems and issues are so big that there is no way any company, no matter how big it might be, can do anything by itself.

“We cannot create impact on our own. We have to be better at collaborating internally and excellent at collaborating externally. We call this our golden triangle; we have to be excellent collaborators working with governments in creating solutions to social problems.”

For example, the beverage company completed a “golden-triangle partnership” with the government of Tanzania, whereby the company worked with the country’s government and other firms to get essential malaria drugs to all parts of the country, using their supply chain expertise.

According to Bozer, the company increasingly is trying to do this, to respond to new demands businesses are getting from society.

In his parting words, Bozer asked all ACCJ members to think what can be done by businesses to help the economic transformation of Japan to succeed.

Megan

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Megan Waters

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