Coke and Pepsi Learn to Compete in India

PepsiCo, Inc. operates as a food and beverage company worldwide. Through its operations, authorized bottlers, contract manufacturers and other partners, the company makes, markets, sells, and distributes various foods and beverages, serving customers and consumers in approximately 200 countries and territories. The company also owns Frito-Lay company and Quaker Oats. It has bottling and distribution facilities in Asia, North

For many years, the rest of the world has assumed that India’s governing body is a closed minded regime, avoiding outside investments almost entirely, especially consumer good. This was an obvious obstacle for both Coca-Cola and Pepsi Co. when contemplating entrance into this new market. Although Pepsi had not attempted to enter the market before 1986, Coke had been there many years before, since 1958 but was forced to leave, in 1977, as a result of political actions and policies. This is an obvious example of how political actions and policies can affect, and have affected, the market for soft drinks in India. Therefore, Coca-Cola’s relationship with the Indian government was tarnished, which made it harder for Coke to re-enter. Coca-Cola

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?

PepsiCo is a global food and beverage corporation based in United States. Company received its current name in 1965, through the merger of Pepsi-Cola with Frito Lay Inc. PepsiCo makes, markets, sells and distributes more than 40 brands. A range of worldwide famous brand names includes Pepsi, Mountain Dew, Lay’s, Doritos, Quaker, Tropicana, Tostitos, Walkers, Cheetos, Ruffles, Fritos and others. PepsiCo generated net revenues of more than USD 65 billion in 2013, where 35% of revenue from developing and emerging markets (PepsiCo Annual Report). Pepsi products are available in more than 200 countries. The company has its own bottling manufacture and distribution facilities. Pepsi-Cola Company division is the second largest carbonated soda business in the world and the Frito-Lay division is the world’s leader in snacks business. The Frito-Lay generates more than 65% of PepsiCo 's net sales and more than 2/3 of the PepsiCo operating

Coca Cola is bestselling soft drink in the world. It has introduces various product like sports drink, water, juices, sparkling beverages and energy drinks. It has gone through several innovations from products to packaging. In May 1886 Coca Cola was invented by Dr. John Pemberton, a pharmacist from Atlanta, Georgia, registered trademark in US as Coke since 1944. Company sells its product at gas station, supermarket, vending machines and at most fast food restaurants like Mc Donald and Subway. Its widely availability has made its customer’s first choice leading to brand loyalty.

In the year 1991, the Indian Government adopted Economic Liberalization Policy. During that time, “cold drink’ as popularly known in India were an Urban phenomenon and the favourites (soda based) were Campa cola, Gold Spot, Limca and Thumps up. Coca- cola bought these local brands soft drink when re-entered the Indian market in 1990. (Pepsi Vs Coke. Anti Essay). Retrieved February 18, 2016, from the World Wide Web: http://www.antiessays.com/free-essays/Pepsi-Vs-Coke-71892.html Pepsi entered in the Indian market as Pepsi Food Ltd. and was known as Lehar Pepsi until 1991, when the use of foreign brands was allowed, there was Pepsi bought out its partner and ended the venture in 1994. Meanwhile, coke tried to re-enter the Indian market in 1990 by merging with Godrej but was denied, but then its return to India and merged with Britannia Industries India Ltd. Fortunately, In July 1993 local company Parle sold its brands and plants to

Pepsi –cola was started in the summer of 1898 in New Bern, North Carolina by Pharmacist Caleb Bradnham. PepsiCo Inc. started in 1965 with the merger of Pepsi-Cola and Frito-Lay. Since then, PepsiCo has continued to grow, adding new brands and product lines meeting the demands of the market. Throughout the years, they have strived and worked toward environmental sustainability. The ability to be financial stable gives PepsiCo the ability to give back and donate to those communities they are located in. PepsiCo’s mission to provide performance with purpose means delivering sustainable growth by investing in a healthier future for people and our planet. PepsiCo is continually increasing their triple bottom line.

As the Coca Cola company has come a long way from advertising a few servings of sparkling drinks in a pharmacy, to a worldwide business. Coca Cola’s loyalty to remain at the front of the shifting public values in increasing their promotion tactics has confirmed to their plus. Without any confusion The Coca Cola Company has developed all the basics necessary to run a multimillion, worldwide venture and it refreshes all the people that come in contact their

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

3. If Coca-Cola wants to obtain more of India’s soft drink market, what changes does it need to make?

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

The sustainability also works in alliance with the companies mission of refreshing the world, creating moments of happiness, creating value and making a difference. The leadership of the company is focused on the so called ‘Three Ws’: women, water and well being. The company is striving to work together with their partners, government agencies, universities and others. The company is trying to enable empowerment of 5 million women by 2020. Also they are working in the direction of balancing the water they use on beverages by 2020, by returning to communities and nature the amount of water equal to the amount used on producing the beverages. And they have already made a difference returning 68% of the water in 2013. As for well-being they want the customers to be informed and choose their preferred drink, by providing a greater variety of reduced or no calorie beverages. They also try supporting physical activity programs in each of the markets they operate. The sustainability framework of the Coca-Cola Company is what they call ‘Me, We, World’. Me stands for increasing personal well being like, offering low or no calorie drinks, providing transparent nutrition information and supporting physical activity. We stands for building stronger communities like, empowering women, comply with norms and standards and charity contribution. And finally World stands for protecting the environment like, water, climate protection, packaging and sustainable

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.

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.

Obstacles that Pepsi faced when trying to prospecting India include: Terrorism in the Punjab Pradesh, a brand new political party, the Janata Dal, a high degree of government intervention, and a decline of the currency, the Rupee.