Pepsi Strategy to India

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Pepsi's Entry into India: A Lesson in Globalization

Case summary:
The case discusses the major strategies adopted by Pepsi Co (Soft drinks & snack food major) to enter the Indian market in the late 1980s. Initially the company found it very hard to sell itself to the Indian government as the Indian economy was highly regulated. So to lure Indian government Pepsi Co made promises of working towards enrichment of the rural economy Punjab by getting involved in the agricultural activities. Pepsi Co also made several promises to make its proposal look very attractive to the Indian government.
The case also highlights the criticism faced by the company. Its failure to keep many of the promises after it started the operations in India,
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The fact that Punjab boasted a healthy agricultural sector also played a role in PepsiCo's decision. India was not even doing well on its exports. So considering all these Pepsi came up with the following strategies:

* To project the entry of Pepsi as a boost for the economy of Punjab * To project that entry of Pepsi would result in increase in employment level in Punjab * To project that entry of Pepsi would alleviate the problem of terrorism via creating more employment * To project that entry of Pepsi would help India boost export as half of the production would be exported and the export-import ratio would be 5: 1 for a period of 10 years.
Pepsi’s projection of its operations as the solution to many of Punjab’s problems certainly played a crucial role as at that time the Indian government was incompetent to address the problems of Punjab. The proposal of Pepsi was very attractive so government gave the green signal to the Pepsi Foods Ltd.

3. How did the company react to the change 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 its commitments.

Liberalization of Indian economy was a boon for Pepsi. It allowed Pepsi various benefits which they used wisely. The removal of
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