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The Political Environment in India
Pages 4 (1004 words)
1. The political environment in India has proven to be critical to company performance for both PepsiCo and Coca-Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry?
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. A joint venture can be defined as, “An association of two or more individuals or companies engaged in a solitary business enterprise for profit without actual partnership or incorporation” (Thefreedictionary). The regulations of India are also a tough challenge. The political environment of India could have been studied more closely prior to these two companies entering the India marketplace. Databases that could have helped these companies evaluate the political, cultural and economical environment better are CountryWatch, CultureGrams, and EIU Country Intelligence. 2. Timing of entry into the Indian market brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of earlier or later market entry? Coca-Cola was the company that entered first into the market. The twenty years of experience and captivation of market share were wasted once they withdrew from India in 1977. Pepsi entered before Coca-Cola at the end of the 20th century. ...
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