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Pepsi Entry into india A lesson In globilization - Case Study Example

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Pepsi Entry into india A lesson In globilization

Haunting challenges in the political, public, economic and social front where there in store aplenty for Pepsi, but the paramount task was to appease the politicians, i.e., the government first, which would automatically reduce the burden in all other front to a great extent. Peter Druker had long back said about the future globe that reciprocity will be the central principle of international economic integration. Thus Pepsi knew that for it to enter India, it has to reciprocate by some deeds that would facilitate the
The promises that Pepsi made to deliver if it were allowed access to Indian Market was aplenty. A few noteworthy ones are focussing on food and agro processing generating job opportunities for the people of Punjab, boosting the image of Indian products in foreign markets, etc. Given all these promises, If a question is asked whether the company materialized all that, the answer would be no. It did make an attempt to bring about a green revolution in the state of Punjab; there was a drastic increase in the production of tomatoes, farmers were given free farming equipments and agro based research centres were opened in Karnataka and Punjab. Corporate Social Responsibility is an often heard word now, but the colossal part that it plays is corroborated by Pepsi's entry into India. It was only through its social perks that it got access to the Indian Market.
The cat was out of the bag in 1991, around two years after Pepsi's entry into India that it was conspicuous that Pepsi failed in most of its obligations. This was a double whammy for the same George Fernandez who blasted the Rajiv Gandhi run Government at the parliament. His accusations where that, pepsi was indulging in under invoicing and by consecutively preparing bogus receipts and hiding transactions to a great extent. That is a different case in itself.
A foreign company should be polycentric- meaning, it should consider that each and every host country where they set there shop has got a different set of culture and habits and especially problems with which they wouldn't be in a position to appreciate any endeavour by a foreign company. Thus Pepsi was aware of it and
Knew that winning public opinion is the only solution for there entry and especially the farmers of Punjab.
There motto was "performance with purpose" which did sell well among the people of India and the politicians. Under this tagline, apart from engaging the farmers' pepsi did quiet a number of social activities like replenishing waste water, waste to wealth initiative, collaboration with farmers through contract farming etc. This only tells that for a multinational company to explore a new customer base, it has to deal with ordinary people of the host country first who may not be their customers in the first place. But still their good will is always necessary for the company to survive. ...Show more

Summary

I learned that you are coming here. I am the one that threw Coca-Cola out, and we are soon going to come back into the government. If you come into the country, you have to remember that the same fate awaits you as Coca-Cola." ,wrote, George Fernandez, the General Secretary of one of the country's leading political parties, Janata Dal in the year 1988, approximately four years before India was liberalized…
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