Market Entry Strategies Case Study

Coca-Cola in Russia: Expecting Fat Growth in a Flat Economy?

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Abstract:

This case deals with the strategies adopted by Coca-Cola (Coke) in Russia to sustain its business during the economic downturn. Russia, known to be a socialist country, transformed itself into a transition economy by opening doors to foreign investment. As a result, MNCs forayed into the country amidst challenges posed by the ethnocentric consumer behaviour. But in Russia, consumerism was very peculiar. On one hand, there were consumers who swore not to embrace foreign brands and on the other, there were consumers who preferred foreign brands but were restricted from using them.

Post-1990s, with the entry of MNCs, consumers started using foreign brands extensively. This trend in consumerism helped Coke to make profits and become a major player in the Russian beverage industry, though it was not accepted by the Russians earlier for being a US company. However, the industry which is driven by consumer tastes to a large extent, has been badly hit due to global economic crisis in 2008. In order to attract consumers who are spending less on beverages, Coke has come up with a number of innovative strategies. Instead of cutting down its expenditure, it is spending more on advertisements in order to boost sales and increase profit. However, the big question is, to what extent is it feasible for Coke to bet on the market of Russia during the economic downturn?

Pedagogical Objectives:

• To understand the background of the Russian beverage industry
• To understand the growth and expansion of Coke in Russia
• To assess the viability of the strategies adopted by Coke to survive the slowdown in Russian economy.

Keywords : Market Entry, Market Entry Strategies, Business Environment, Beverage Market, Beverage Market in Russia, Coca Cola in Russia, Competitive Strategy, Innovation, Expansion Strategy, Russia Beverage Industry.

Contents : 
Beverage Market in Russia
Consumer Price Index and Growth of Nominal Wages
Market Share of Top Sellers of Non-alcoholic Beverages in Russia
Volume of Coca-Cola Consumed in Russia
Change in Volume of Non-alcoholic Beverages in Emerging Countries
Contribution of the Emerging Markets to the World GDP