Coke and Pepsi Learn to Compete in India

829 Words Feb 11th, 2012 4 Pages
Summary
The case traces the history of the struggles both companies encountered during the start-up phase of their business. During the 1990’s, India’s government opened its door to foreign investors and PepsiCo entered into India and Coca-Cola re-entered four years later. Both companies had many difficult situations to overcome and eventually had to recognize that India’s market was very different and a special knowledge, skills and local expertise was needed to be obtained if both companies wanted to succeed. Along with the adopting to the different culture, the two companies faced bad press over the pesticide content in its soft drinks. Overall, the case highlights the many challenges the two companies faced going overseas to India.
…show more content…
(a joint venture launched by PepsiCo in India). And because the government prohibited the use of a foreign brand, PepsiCo had to market under the name “Lehar Pepsi”.

Some of the effects may have been anticipated, especially the corruption within Indian government. As far as the contamination crisis, that couldn’t have been so easily anticipated. During that time both companies redeemed themselves with the fact they had to prove their products were within safe limits compared to others. Overall, PepsiCo and Coca-Cola did a great job keeping up with the changes in the government during the 1990s.

2. The timing of entry did play a crucial part in the growth of the two companies. Coca-Cola had an advantage over PepsiCo because it had entered in 1958 but that advantaged was lost when Coca-Cola had exit the Indian market in 1977.

Later, Coca-Cola re-entered in the early 1990’s, after PepsiCo had been there for about four years. PepsiCo had a head start over Coca-Cola. They had the knowledge of the local market conditions and understood the needs and wants of the local people, and a strong relationship with the government in New Delhi. Coca-Cola realized this and knew they had to do something big to keep up with Pepsi in terms of market share so they bought an established brand “Thums Up” from Parle Industries.

Also because of the early entrance, PepsiCo learned to have more heart felt adverting and was very successful using cricket, movies and music stars to

More about Coke and Pepsi Learn to Compete in India