Pepsico

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7. STRATEGIES OF PEPSICO IN VIETNAM MARKET
Further, the most favorite and potentially profitable approaches for entering a foreign market are strategic alliances and joint ventures with foreign partners. Because of strategic cross-border alliances, company can spread out geographic coverage and build up competitiveness in foreign markets, especially step over the legally invested barriers from host-countries government. (Thompson et al 2008, pp. 217-220) In 1993, following by the removal of U.S barrier on Vietnamese economy, PepsiCo immediately declared setting up a $10 million Joint Venture company to enter new potential market and became the first-runner in Vietnam market (Stier 1993). This strategic collaboration helped PepsiCo getting a good distribution system from SP Co., the local partner. To 1996, PepsiCo dominated over 90% market share in Vietnam, and until then Coca-Cola was starting to do business with Vietnam. Moreover, in 1998, PepsiCo continuously raised the share up to 97% and increased legal capital to $70 million for the portfolio in Vietnam. April 2003, PepsiCo bought 3% remaining shares and became 100% foreign investment company in Vietnam (Dong Nai Provincial People’s Committee 2005). Table 7.1 The Developing of PepsiCo Vietnam

Additionally, in 2005, PepsiCo Vietnam proudly won the DMK Award – abbreviated from the name of Sir Donald Mcintosh Kendall who was the Co-Founder, former Chairman and CEO of PepsiCo. Due to getting this highest prize at PepsiCo, the candidate must achieve all the quality, market share and profit for three years frequently (VietNamNet Bridge 2005). In short, the first-move strategic tactic has completely led PepsiCo to dominate the market, even exceeding over Coca-Cola rival in Vietnam market from start-up time up to now. And recently, in May 2008, PepsiCo Vietnam publicly stated an investment of $30 million to develop a farm in Binh Duong province which mainly supplies potato for producing snacks (Vietnam Business...
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