Coke and Pepsi

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?
Indian government viewed as unfriendly to foreign investors for many years. Outside investment had been allowed only in high-tech sectors and was almost entirely prohibited in consumer goods sectors. The “Principle of indigenous available” If an item could be obtained anywhere else within the country, imports of similar items were forbidden. This made Indian consumers had a little choice of products or brands and no guarantees of quality or reliability.   Indian Laws, the government mandated that Pepsi’s products be promoted under the “Lehar Pepsi” name. For Coca-Cola, they attempted to enter into Indian market by joining with Parle and became “Coca-Cola India” Some of these effects may have been anticipated, especially foreseeing the corruption within Indian government. Taking that into account more proactively might have helped Coca-Cola avoid hardships in the past. As far as the contamination issues goes, that might not have been so easy to anticipate. Both companies held their own when trying to prove their products were within safe limits compared to other food products.   They could developments in political arena; Coke could have agreed to start new bottling plants instead of buying out Parle, and thus wouldn’t have agreed to sell 49% of their equity.

2 – Timing of entry into the Indian market brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of earlier or later market entry?
Pepsi – Advantages – Entered the market before Coke and were able to gain a foot hold in the market while it was still developing; Gained 26% of the market share by 1993.... [continues]

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