Case 2.4 Coke and Pepsi Learn to Compete in India BRIEF SUMMARY OF CASE CONTENT: This is a detailed and comprehensive case describing the market entry of two global consumer product companies, PepsiCo and Coca-Cola Corporation into a Big Emerging Market (BEM), India. It traces the history of the challenges encountered by these two companies in the developing country environment of India from the late 1980s to the present time. Emphasis is placed on lessons learned by the two companies as they adjust to competing in an unfamiliar and rapidly-changing environment. Key themes include: the effects of the changing political scene resulting in the imposition of a non-standard domestication policy on foreign direct investors; the …show more content…
The cap on the equity stake has been gradually lowered over the years, giving greater flexibility to foreign companies in terms of operation and profitability. The ouster of Coca-Cola in 1977 was probably the most damaging effect of traditionally restrictive rules governing foreign investment that the Indian government had. Until recently, the Indian government had a policy whereby no foreign company could own a majority equity stake (greater than 50%) in a venture/project in the country. Coca-Cola’s withdrawal from India was partly due to this reason, and partly due to the demand by the government to share its secret formula for the concentrate. Leaving the country on a non-cordial note with the government in 1977 had negative repercussions when Coca-Cola tried to re-enter. After being turned down on initial proposed joint venture with Godrej it finally reentered the Indian market in the early 90’s via a joint venture with Britannia Industries. This market entry was forced on Coca-Cola because its major competitor PepsiCo had already entered the Indian market in 1986. Entering later in the market had costs associated with it – (1) spending greater time, energy and money in building relationships with key government officials because PepsiCo had a headstart of about four years in the game; (2) spending maximum money on advertising to woo customers away from Pepsi’s substantial base in the cola market. PepsiCo had its own share of problems dealing with the
The company known as Coca-Cola today was started in September of 1919, but the first Coke brand was served as early as 1886. Since that time it has grown to be one of the most globally recognized brand names with a stock value of $167 billion. Coke’s plan has always been developed with the future in mind. Right away the company realized that it was more profitable to manufacture the concentrate used to make carbonated drinks than to bottle it. From that point on they saw the entire world, not simply the originating country, as their desired market. It seems only practical that the company should pursue this agenda until conquered then focus the effort on expanding into different product lines. This logical
Points of Parity and Points of Difference between Diet Coke and Diet Pepsi – (To be added)
One of the world's most well-known brands is that of Coca Cola. It is one of America's most popular brand exports, and has seen major international success by opening up bottling and distribution plants abroad in several countries. One of these previously successful bottling plants was located in Colombia, yet events shocked both the nation and the world that would eventually tie Coca Cola into a major human rights violations scandal.
ol. Crack cocaine is a serious threat in common abused drug in South Carolina is marijuana but its use is not associated with crimes (Drug interventions.net, n.d.). In Cherokee County the population reported to smoke cigarettes was 28% and 20% was noted for the state (County health rankings, 2015).
In addition to alcohol, another toxic bunch of narcotics that are also considered sinful in the Christian religion are illegal drugs. A particular illegal drug that took a devastating toll on the United States during the 1980’s was crystallized cocaine, by its street name: “crack cocaine”.
One big change that needs to be made is pesticide free water in the Coca-Cola products. Indians have a lot of trouble with making sure their food and water is contaminated, and things like this aren’t going to help Coca-Cola’s business because they aren’t going to want to risk their health. Indian’s need to feel safe and trustful of Coca-Cola that their products are safe for themselves. Coca-Cola made also need to use less Indian water in their products if that problem cannot be fixed. Whatever it takes for Indian’s to understand that Coke’s products are pesticide free is what Coca-Cola needs to do. The future of Coke in India is in the hands of
1. The political environment in India has proven to be critical to company performance for both PepsiCo and Coca- Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry? If not, could developments in the political arena have been handled better by each company?
Coca-Cola was India 's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA).[12] In 1993, the company (along with PepsiCo) returned
Coca cola should enhance the relationship with the government. Strong government relations are important in India and give them an opportunity to communicate all the benefits and investments they provide to the economy.
The company we have chosen is Coco Cola India. Coca-Cola India Private Limited re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 1.3 million retailers. Today, their products are the leading brands in most beverage segments. The Coca-Cola Company’s brands in India include Coca-Cola, Fanta Orange, Fanta Apple, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Maaza Milky Delite, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and Nestea Iced tea, the Georgia Gold range of teas and coffees and
As a finance student, I have selected PepsiCo which is an American company and recommend whether that company can acquire a new firm in the democratic country which is India. PepsiCo is an American multinational corporation which has interests in manufacturing, marketing and distributing snacks and beverages, (Wikipedia. 2016). PepsiCo is the second largest company in food and beverage industry in the world and maintaining its trust among their customers, (Wikipedia. 2016). The company distributing their products more than 200 countries, (Wikipedia. 2016). Therefore its annual net revenues is $43.3 billion, (Wikipedia. 2016). PepsiCo has been recognized for performance and leadership, diversity, sustainability and supporting the societies where we live. With this
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
As depicted in the case study “Play It Safe at Home or Take a Risk Abroad”, Coe’s is
Who would have known that Coca-Cola debut to the world was all because of a pharmacist? And just a touch of carbonation has truly made it a refreshing and an enjoyable carbonated soft drink. It is within “arms reach of desire” as former CEO Robert Woodruff notes. The Coca-Cola Company ultimately cares about its customers and prides itself into providing good citizenship. One of Coca-Cola’s largest international investors was India, from 1993 up until 2003, Coca-Cola invested more than US$1 billion into the country. In August of 2003, CEO of Coca-Cola India, Sanjiv Gupta came to a standstill where he had to further anticipate his next move for the company. The company faced a crisis where the Center for Science and Environment (CSE) issued a press release affirming that three samples of the 12 cold drink brands sold in and around Delhi containing pesticide residues were of Coca-Cola and PepsiCo brands.