Case Study: Coke and Pepsi in India:
Coca-Cola controlled the Indian market until 1977, when the Janata Party beat the Congress Party of then Prime Minister Indira Gandhi. To punish Coca-Cola's principal bottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata government demanded that Coca-Cola transfer its syrup formula to an Indian subsidiary. Coca-Cola balked and withdrew from the country. India, now left without both Coca-Cola and Pepsi, became a protected market. In the meantime, India's two largest soft-drink producers have gotten rich and lazy while controlling 80% of the Indian market. These domestic producers have little incentive to expand their plants or develop the country's potentially enormous market. The Indian middle class is growing at 10% per year. To obtain the license for India, Pepsi had to export $5 of locally-made products for every $1 of materials it imported, and it had to agree to help the Indian government to initiate a second agricultural revolution. Pepsi has also had to take on Indian partners. In the end, all parties involved seem to come out ahead: Pepsi gains access to a potentially enormous market; Indian bottlers will get to serve a market that is expanding rapidly because of competition; and the Indian consumer benefits from the competition from abroad and will pay lower prices. Following are the Statistics about these two products -
Coca-Cola India, also witnessed consecutive growth for the last 15 quarters. According to Coca-Cola India If one looks at their latest Q1 2010 growth numbers, Coca-Cola India’s unit case volume grew by 29%. It involved share gains across key beverage categories According to an independent beverage industry report, about 120 billion litre of beverages gets consumed in India annually, out of which 55 percent of sales comes during the summer. Beverage companies are shifting focus to noncarbonated drinks because of an increase...
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