Budget and Budgeting Techniques
Answer- 1: Answer- 1 India was a closed economy in the beginning. Policy banning imports. The Liberalization of India’s Government in 1991. New Industrial Policy. Strict policies regarding the entry of foreign brands. Trade rules & regulations simplified. Foreign investment increased. Pepsi enters in 1986. Coca-Cola follows in 1993. Contd …
Slide 14: Unlawful to market under their Western name in India Pepsi became “Lehar Pepsi”. Coca-Cola merged with Parle and became “Coca-Cola India”. Different Laws for Pepsi and Coke Coca-Cola agreed to sell off 49% of its stock as a condition of entering and buying out an Indian company. Pepsi entered earlier, and was not subject to this. Contd …
Slide 15: India forced Coke to sell 49% of its equity to Indian investors in 2002. Coke asked for a second extension that would delay it until 2007 which was denied. Pepsi was held to this since they entered India in a different year. Coke asked the Foreign Investment Promotion Board to block the votes of the Indian shareholders who would control 49% of Coke. Change in oversight of the FIPB: Past lobbying efforts made useless. Contd …
Slide 16: Could these problems have been forecasted prior to market entry? Probably not Inconsistent, and changing government. How could these developments in the political arena have been handled differently? Coke could of agreed to start new bottling plants instead of buying out Parle, and thus wouldn’t of had to agree to sell 49% of their equity.
Answer-2: Answer-2
Coca-Cola’s Pros & Cons of Timing of Entry in the Indian Market: Coca-Cola’s P ros & Cons of Timing of Entry in the Indian Market Benefits Parle offered its bottling plants in 4 major cities. Made its return to India with Britannia Industries India Ltd. Disadvantages Rigid Rules and Regulations. Buying of bottling plants leads to 49% disinvestment. Local demand of carbonated drinks is as very low. Harder to establish themselves.
Pepsi’s Pros & Cons of Timing of Entry in
Slide 14: Unlawful to market under their Western name in India Pepsi became “Lehar Pepsi”. Coca-Cola merged with Parle and became “Coca-Cola India”. Different Laws for Pepsi and Coke Coca-Cola agreed to sell off 49% of its stock as a condition of entering and buying out an Indian company. Pepsi entered earlier, and was not subject to this. Contd …
Slide 15: India forced Coke to sell 49% of its equity to Indian investors in 2002. Coke asked for a second extension that would delay it until 2007 which was denied. Pepsi was held to this since they entered India in a different year. Coke asked the Foreign Investment Promotion Board to block the votes of the Indian shareholders who would control 49% of Coke. Change in oversight of the FIPB: Past lobbying efforts made useless. Contd …
Slide 16: Could these problems have been forecasted prior to market entry? Probably not Inconsistent, and changing government. How could these developments in the political arena have been handled differently? Coke could of agreed to start new bottling plants instead of buying out Parle, and thus wouldn’t of had to agree to sell 49% of their equity.
Answer-2: Answer-2
Coca-Cola’s Pros & Cons of Timing of Entry in the Indian Market: Coca-Cola’s P ros & Cons of Timing of Entry in the Indian Market Benefits Parle offered its bottling plants in 4 major cities. Made its return to India with Britannia Industries India Ltd. Disadvantages Rigid Rules and Regulations. Buying of bottling plants leads to 49% disinvestment. Local demand of carbonated drinks is as very low. Harder to establish themselves.
Pepsi’s Pros & Cons of Timing of Entry in