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The case traces the history of the struggles both companies encountered during the start-up phase of their business. During the 1990’s, India’s government opened its door to foreign investors, PepsiCo entered into India and Coca-Cola re-entered four years later. Both companies experienced a range of unexpected problems and difficult situations that let them to recognize that India's market was very different and special knowledge, skills and local expertise was needed to be obtained if both companies wanted to succeed. Along with the adopting to the different culture, the two companies faced press from stringent conditions placed by the Indian government and the pesticide content in its soft drinks. Overall, the case highlights the many challenges the two companies faced going overseas to India.
Timing of entry
The timing of entry did play a crucial part in the growth of the two companies. Coca-Cola had an advantage over PepsiCo because it had entered in 1958 but that advantaged was lost when Coca-Cola had exit the Indian market in 1977.
In 1991 a new government took office which made it easier for foreign companies to do business in India. Coca-Cola re-enter the Indian market in the early 90’s becoming a major competitor of PepsiCo who had entered the Indian market in 1986.
First mover adv.
PepsiCo had a head start over Coca-Cola. They had the knowledge of the local market conditions and understood the needs and wants of the local people.
Strong relationship with the government in New Delhi
Joint venture with Volta's and Punjab Agro
Because of the early entrance, PepsiCo learned to have more heart felt adverting and was very successful using cricket, movies and music stars to endorse their brand.
1. Stringent conditions placed by the Indian government
During PepsiCo entrance into the country, they had many of their own problems. PepsiCo had to limit their sales so they did...
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