Pepsi in India
Pepsi wanted to enter India…
As the major market for PepsiCo, the US, was reaching saturation levels
India's vast population offered a huge untapped customer base
Urbanization had familiarized indians with leading global brands
Question 1
Why do companies like Pepsi need to globalize?
What are various ways in which foreign companies can enter a foreign market?
What hurdles and problems did India face when it tried to enter India in 1980s?
Need for globalization
Wider and newer markets
Increasing competition in the existing markets
Huge potential for growth Various ways of En entering
ENTRY MODE
Exports
License and Franchise
Alliance
Joint Venture
Wholly owned Subsidiary
Hurdles & Problems Advantages to Countries close in economic development have similar market segments similar types of goods and services knowledge about market demand transfers easily similar physical infrastructure, such as airports, roadways, railways, and seaports
Indian market did not offer Pepsi any of the above advantages
The timing was not favoring the entry of MNCs in India
The joint venture with RPG didn’t work
Question 2
Critically analyze the strategy adopted by Pepsi to sell itself to the Indian government
Do you think the biggest factor responsible for the acceptance of it’s proposals by the regulatory authorities was it’s of it’s operations as the solution to many of Punjab’s problems? Why/Why not?
Initial entry strategy failed
Joint venture RPG Group
Agro Product Export Ltd and Pepsico would sell soft drinks under the Pepsi Label Import of Cola concentrate in return of the exporting the juice concentrate Export : Import Ratio 3:1
The Strategy to enter
Key Commitments
Import of concentrate in return of export of agro processing foods
Export – Import Ratio 5:1 for 10 years
Focus on Food Agro – processing
Only 25 percent investment in the soft drink business
Half
As the major market for PepsiCo, the US, was reaching saturation levels
India's vast population offered a huge untapped customer base
Urbanization had familiarized indians with leading global brands
Question 1
Why do companies like Pepsi need to globalize?
What are various ways in which foreign companies can enter a foreign market?
What hurdles and problems did India face when it tried to enter India in 1980s?
Need for globalization
Wider and newer markets
Increasing competition in the existing markets
Huge potential for growth Various ways of En entering
ENTRY MODE
Exports
License and Franchise
Alliance
Joint Venture
Wholly owned Subsidiary
Hurdles & Problems Advantages to Countries close in economic development have similar market segments similar types of goods and services knowledge about market demand transfers easily similar physical infrastructure, such as airports, roadways, railways, and seaports
Indian market did not offer Pepsi any of the above advantages
The timing was not favoring the entry of MNCs in India
The joint venture with RPG didn’t work
Question 2
Critically analyze the strategy adopted by Pepsi to sell itself to the Indian government
Do you think the biggest factor responsible for the acceptance of it’s proposals by the regulatory authorities was it’s of it’s operations as the solution to many of Punjab’s problems? Why/Why not?
Initial entry strategy failed
Joint venture RPG Group
Agro Product Export Ltd and Pepsico would sell soft drinks under the Pepsi Label Import of Cola concentrate in return of the exporting the juice concentrate Export : Import Ratio 3:1
The Strategy to enter
Key Commitments
Import of concentrate in return of export of agro processing foods
Export – Import Ratio 5:1 for 10 years
Focus on Food Agro – processing
Only 25 percent investment in the soft drink business
Half