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The Political Environment for Coca-Cola and Pepsi in India - Essay Example
Pages 4 (1004 words)
The researcher of this essay discusses the political environment in India, that has proven to be critical to company performance for both PepsiCo and Coca-Cola India. The researcher analyzes what specific aspects of the political environment have played key roles…
This essay describes and analyzes the political environment in India, that has been very challenging to both Coca-Cola and Pepsi due to the fact that the government is very protective of the local industries. It is stated that Coca Cola entered the Indian market first in 1958, but it withdrew India in 1977 due to a controversy over the copyrights of its formula. Intellectual property is often not protected in foreign marketplaces. In order for Coca-Cola and Pepsi to penetrate the marketplace in the late 1980’s and early 1990’s these firms had to negotiate joint ventures with local firms. The researcher mentiones that political environment of India could have been studied more closely prior to these two companies entering the India marketplace. One of the reasons that the companies have been ineffective in this foreign market is because the firms failed to realize that the marketing strategy that worked in Western nations will not be effective in an Asian marketplace. The researcher also describes an inherent problem of the Indian marketplace, that is that income per capita of the consumers is very low. The researcher also discusses what lessons can each company draw from its Indian experience as it contemplates entry into other Big Emerging Markets and comments on the decision of both Pepsi and Coke to enter the bottled water market instead of continuing to focus on their core products — carbonated beverages and cola based drinks in particular, because a lot of consumers prefer to drink a bottle of water over a soda. ...
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