Coke and Pepsi in India
While Pepsico and Coca-Cola are both multinational corporations (MNCs) with extensive experience in international operations, their business dealings in India are not their most long held nor the least problematic. Pepsico has the most longevity in Indian operations having started there in 1988. This allowed Pepsico to establish a stronghold in the Indian market prior to Coca-Cola’s entry in 1993. Both of these MNCs experienced difficulty in establishing their companies, and while they have made some great headway they have also experienced some extreme business angst along the way.
Issue/Problem Identification
Facts and Assumptions India has the second largest population by country in the entire world. The population is estimated at 1.22 billion as of July of 2013 ( (The World Factbook, 2013). India, with its expanding economy, represents a great opportunity for foreign investors. However, there are numerous hurdles for any MNC to overcome if they want to succeed in India. India has difficult trade policies, rules, and regulations, and the use of a foreign brand name is prohibited in India (Ulitin, 2013). Additionally, because of Pepsico’s failure to live up to some of its promises to improve the economy as part of it being allowed to conduct business in India, Pepsico and other MNCs developed a reputation as organizations that cannot be trusted (Pepsi 's entry into India, 2009). Pepsico and Coca-Cola were well aware of the challenges present when attempting to enter emerging markets, and they enjoyed several years of increased market share and increased revenues prior to 2003.
Major Overriding Issues/Problems Both companies experienced major problems, starting in 2003 and continuing through 2007, because of allegations of dangerously high levels of pesticide in the soft drinks they sold all over India. Such alleged high levels of pesticide can cause cancer and birth defects if the products were consumed over a long period of time. These allegations were
Issue/Problem Identification
Facts and Assumptions India has the second largest population by country in the entire world. The population is estimated at 1.22 billion as of July of 2013 ( (The World Factbook, 2013). India, with its expanding economy, represents a great opportunity for foreign investors. However, there are numerous hurdles for any MNC to overcome if they want to succeed in India. India has difficult trade policies, rules, and regulations, and the use of a foreign brand name is prohibited in India (Ulitin, 2013). Additionally, because of Pepsico’s failure to live up to some of its promises to improve the economy as part of it being allowed to conduct business in India, Pepsico and other MNCs developed a reputation as organizations that cannot be trusted (Pepsi 's entry into India, 2009). Pepsico and Coca-Cola were well aware of the challenges present when attempting to enter emerging markets, and they enjoyed several years of increased market share and increased revenues prior to 2003.
Major Overriding Issues/Problems Both companies experienced major problems, starting in 2003 and continuing through 2007, because of allegations of dangerously high levels of pesticide in the soft drinks they sold all over India. Such alleged high levels of pesticide can cause cancer and birth defects if the products were consumed over a long period of time. These allegations were
References: Meenakshi, R.-S. (2006, September 5). Management gurus on crisis communiaction. Retrieved from Rediff India Abroad: http://www.rediff.com/money/2006/sep/05spec.htm Pepsi 's entry into India. (2009, January 16). Retrieved from BooLo: http://www.oboolo.com/business-market/business-strategy/presentation/pepsi-s-entry-into-india-a-well-planned-out-strategy-63045.html The World Factbook. (2013, November). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html Ulitin, I. (2013). Case Study. Retrieved from Slideshare: http://www.slideshare.net/IvanUlitin/case-study-6