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Case Coke and Pepsi Learn to Compete in India

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“Coke and Pepsi learn to compete in India” case 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? If not, could developments in the political arena have been handled better by each company?

A/ The Indian government was unfriendly to foreign investors, because outside investment was only allowed in high-tech sector and the remaining industries were discriminated. In addition, the “Principle of indigenous available” played a major role in the political environment by forbidding imports of items that could be produced within the country.
On the other hand, Indian laws required that Pepsi entered the market under “Lehar Pepsi” name and Coca-cola had to join Parle to became into “Coca-cola India”

They could foresee the level of corruption that is present in India, and reduce the difficulties that they faced after entering the market. However, the contamination issue couldn’t have been anticipated, but they shouldn’t have stayed quiet during the legal process because it is taken as a sign of guilt, according to Indian culture.

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?

A/ Pepsi entered a few years before than Coca-Cola, because Coca-Cola application was denied while Pepsi was approved. So, as expected, Pepsi had advantage in the local market, but this market counted with several competitors and low demand for carbonated products. Meanwhile Coca-Cola entered India, one of the competitors (Parle) was ready to join it. Pepsi struggled instead.

3. The Indian market is enormous in terms of...

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