Case Analysis on Pepsi's Entry to India

2196 Words May 14th, 2011 9 Pages
Case Analysis on Pepsi's Entry to India
Pepsi's Entry into India: A Lesson in Globalization

SUMMARY:

The case discusses the strategies adopted by the soft drinks and snack foods major PepsiCo to enter India in the late 1980s. To enter the highly regulated Indian economy, the company had to struggle hard to 'sell' itself to the Indian government. PepsiCo promised to work towards uplifting the rural economy of the terrorism affected north Indian state of Punjab by getting involved in agricultural activities. In addition, it made a host of other promises that made its proposal very attractive to the regulatory authorities. The case also discusses the criticisms leveled against the company, in particular, criticism of its failure to honor
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What hurdles and problems did Pepsi face when it tried to enter India during the 1980s?
Pepsi needs to globalize because its home market is not only saturated but because of health consciousness is shrinking. On the other hand, it want to enter markets abroad where there are less educated people who can be persuade to drink Pepsi. It is this search for markets that has driven Pepsi to markets like India.
When it tried to enter India:
The Indian law did not permit it;
There would be repatriation problems it would face:
There were activists who were opposed to the entry of Pepsi into India;

2.Critically analyze the strategy adopted by Pepsi to sell itself to the Indian government. Do you think the biggest factor responsible for the acceptance of its proposal by the regulatory authorities was its projection of its operations as the solution to many of Punjab's problems? Why/Why not?

The strategy of Pepsi was:
1. To project the entry of Pepsi as a boost for the economy of Punjab;
2. To project the entry of Pepsi as an increase in the employment level in Punjab;
3. To project the entry of Pepsi as the ultimate solution to terrorism;
These projections were used to persuade the Indian Government to allow Pepsi to enter India.

3.How did the company react to the changes in the business environment after the liberalization of the Indian economy in the early 1990s? Critically comment on the allegations that Pepsi deliberately did not adhere to most of
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