Coke and Pepsi Learn to Compete in India
Case 1-3 Coke and Pepsi Learn to Compete in India 1. As far as I am concerned, there are three specific aspects of the political environment have played key roles: 1) As mentioned in the case, Indian government viewed as unfriendly to foreign investors. Outside investment had been allowed only in high-tech sectors and was almost entirely prohibited in consumer goods sectors. 2) Based on Indian laws, outside investment cannot use their original brand name. For Coca-Cola, they attempted to enter into Indian market by joining with Parle and became “Coca-Cola India”. For Pepsi, its products were promoted under the name of “Lehar Pepsi”. 3) Later, the liberalization of the Indian economy and the dismantling of complicated trade rules and regulations, foreign investment increased dramatically.
I don’t think these effects have been anticipated prior to market entry. Because the Indian political environment was unstable, different government issued different policies. And I think developments in the political arena have been handled better by each company. Coke could agree to start new bottling plants instead of buying out Parle, and thus wouldn’t agree to sell 49% of their equity. 2. Advantages of earlier market entry: 1) As entering the market earlier, Pepsi can gain the market share earlier than other competitors.
Disadvantages of earlier market entry: 1) There were several stringent conditions imposed on Pepsi’s venture. Sales of soft drink concentrate to local bottlers could not exceed 25% of total sales for the new venture. 2) The government mandated that Pepsi Food’s products be promoted under the name “Lehar Pepsi”.
Advantages of later market entry: 1) Coca-Cola was able to buy four bottling plants from Parle and it also bought some of Parle’s leading brands. 2) It set up 2 new ventures with Parle.
Disadvantages of later market entry: 1) Coca-cola was denied entry at the beginning because of Pepsi. 2) The later entrant was more
I don’t think these effects have been anticipated prior to market entry. Because the Indian political environment was unstable, different government issued different policies. And I think developments in the political arena have been handled better by each company. Coke could agree to start new bottling plants instead of buying out Parle, and thus wouldn’t agree to sell 49% of their equity. 2. Advantages of earlier market entry: 1) As entering the market earlier, Pepsi can gain the market share earlier than other competitors.
Disadvantages of earlier market entry: 1) There were several stringent conditions imposed on Pepsi’s venture. Sales of soft drink concentrate to local bottlers could not exceed 25% of total sales for the new venture. 2) The government mandated that Pepsi Food’s products be promoted under the name “Lehar Pepsi”.
Advantages of later market entry: 1) Coca-Cola was able to buy four bottling plants from Parle and it also bought some of Parle’s leading brands. 2) It set up 2 new ventures with Parle.
Disadvantages of later market entry: 1) Coca-cola was denied entry at the beginning because of Pepsi. 2) The later entrant was more