Pepsi Co Case Study
MK416-Case Study 1
1) Both companies experienced a range of unexpected problems and difficulties while trying to enter the Indian market. The Indian government was viewed as unfriendly to foreign investors. Also, the “principle of indigenous availability” had specified that if an item could be obtained anywhere else within the country, imports of similar items were forbidden. In Coca-Cola’s first attempt in the Indian market they chose to voluntarily withdrawal following a dispute with the government over its trade secrets.
Both companies faced the difficulty of finding a local partner in order to enter the market. Very stringent conditions were imposed on both joint ventures. PepsiCo was required to process and distribute local fruits and vegetables, and required to promote under a different name.
I believe many of these problems could have been foreseen prior to market entry given the deterrents imposed by the Indian government such as its strict trade policies, rules, and regulations.
2) Coca-Cola’s first attempt at the Indian market began in 1958 until its withdrawal in 1977 following disputes with the Indian government. PepsiCo did not enter the Indian market until 1986, and Coca-Cola did not reenter the Indian market until 1993. Pepsi struggled to fight off local competition from various local brands, while slowly growing its market share. In 1993 the belief was that Coca-Cola would not take away any market share from local companies given that the beverage market was growing consistently from year to year. A unique opportunity for Coca-Cola arose when local producers tried to align themselves with the industry leader, offering to sell its bottling plants in four key cities. The same company also sold Coca-Cola the rights to some of its most popular local brands.
The timing of Coca-Cola’s reentry appears to be most advantageous. They were able to purchase local plants already in place and running, as well as, rights to some of the most
1) Both companies experienced a range of unexpected problems and difficulties while trying to enter the Indian market. The Indian government was viewed as unfriendly to foreign investors. Also, the “principle of indigenous availability” had specified that if an item could be obtained anywhere else within the country, imports of similar items were forbidden. In Coca-Cola’s first attempt in the Indian market they chose to voluntarily withdrawal following a dispute with the government over its trade secrets.
Both companies faced the difficulty of finding a local partner in order to enter the market. Very stringent conditions were imposed on both joint ventures. PepsiCo was required to process and distribute local fruits and vegetables, and required to promote under a different name.
I believe many of these problems could have been foreseen prior to market entry given the deterrents imposed by the Indian government such as its strict trade policies, rules, and regulations.
2) Coca-Cola’s first attempt at the Indian market began in 1958 until its withdrawal in 1977 following disputes with the Indian government. PepsiCo did not enter the Indian market until 1986, and Coca-Cola did not reenter the Indian market until 1993. Pepsi struggled to fight off local competition from various local brands, while slowly growing its market share. In 1993 the belief was that Coca-Cola would not take away any market share from local companies given that the beverage market was growing consistently from year to year. A unique opportunity for Coca-Cola arose when local producers tried to align themselves with the industry leader, offering to sell its bottling plants in four key cities. The same company also sold Coca-Cola the rights to some of its most popular local brands.
The timing of Coca-Cola’s reentry appears to be most advantageous. They were able to purchase local plants already in place and running, as well as, rights to some of the most