Pepsi’s Entry into India: A Lesson in Globalization

Pepsi’s Entry into India: A Lesson in Globalization

analyse the importance of formulating and selling a business proposal in such a manner

 The case discusses the strategies adopted by the soft drinks and snack foods major PepsiCo to enter India in the late 1980s. To enter the highly regulated Indian economy, the company had to struggle hard to ‘sell’ itself to the Indian government. PepsiCo promised to work towards uplifting the rural economy of the terrorism affected north Indian state of Punjab by getting involved in agricultural activities. In addition, it made a host of other promises that made its proposal very attractive to the regulatory authorities. The case also discusses the criticisms levelled against the company, in particular, criticism of its failure to honour many of its commitments after it started operations in the country and after the liberalization of the Indian economy.

Finally, the case takes a look at the contract farming initiatives undertaken by Pepsi since the 1990s and seeks to critically analyze the strategies used by the company to enter India.

Issues:

» understand the kind of strategy a multinational company develops to enter highly regulated economies that have immense market potential

» analyse the importance of formulating and selling a business proposal in such a manner that it becomes attractive to the regulatory authorities of a foreign country

» appreciate how and why a company changes its strategies in tune with changes in the regulatory environment of a foreign country

» understand the role big private sector corporations can play in the development of the economies in which they operate, and the financial and social implications (reputation, goodwill) of doing so. The case is aimed at MBA/PGDBA students, and is intended to be part of the strategy and general management curriculum

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