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Pepsi
Pepsi
BY
GUILDHALL COLLEGE
Q.1 Why do companies like Pepsi to globalize? What are the various ways in which
foreign companies can enter a foreign market? What hurdles and problems did
interdependence.
Pepsi like other big companies also wants to globalize the market because of
streamlined both production and distribution of goods. Thirdly, companies can address an
offshoring strategy as part of their value chain. Companies seeking to keep operational
costs low and turn a profit will benefit from sending certain jobs abroad in areas where
India was a big and profitable market and its owm economy was not much strong
Foreign companies adopted different ways to access the foreign markets, it tries to
create lobbies with the governments to obtain permission to being operation in the
country. It also tries to give the attractive package for government related to inverstments
and profit.
Pepsi faced many hurdles and problems when it was trying to enter the India
during the 1980s because India political parties and government were not agree to
globalized the Indian market. They were feeling fear for the monoply of the foreign
products, and also feeling insecurity for their own manufactured good. Even the General
Secretary of one of the indian political paties, Janata Dal, wrote the letter to the President
of multi billion-cola company and wrote, 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 will awaits you as Coca-Cola.
They were clqiming that the companies would siphon out money from the country
in form of profits, promotionalfee, and various other maens. They justified themse;lves
the Indian government. Do you think the biggest factor responsible for the
acceptance of its proposal by the regulatory authorities was its projection of its
Firstly, in May 1985, it joined hands with the RP Goenka group to import the cola
concentrate and sell soft drinks under its own name label. Which was rejected by the
Indian governmennt because of two reasons: one, the government did not accept the
clause regarding the import of the cola concentrate and two, the use of foreign name was
not allowed accoding indian regulatory framework. Secondly, Pepsi company used the
sensitive issue of Punjab for its own mean. It linked itself with the welfare and
developemnt of the punjab, and indicated the punjab healthy agriculation sector. It’s new
proposal was that PepsiCo’s will play important role to bging about the agriculture
revolution in Punjab. It will provide the employment opportunities . for more attraction, it
claimed that these new employment opportunities would tempt many of the terrorist o
return to society.
PepsiCo’s made important commitments like:
• The company would focus on food and agro-processing and only 25% of
• The company would not only bring advanced food processing technology
to Indai, but also provide a boost to the image of production made in India in foreign
markerts
• Half of the production would be exported and the export –import ratio
This package was really attractive for the indian government. Some political
parties still opposed it but government accepted itb after great conversation. And clared
itin September 1988. PepsiCo’s provided the solution of the Punjab’s related problem
which was hot issue for the government of india at that time. Because of un employment,
young people of Punjab were not satisfied with the government. They wetre protesting
against the policies of the government. This solution has been provided by the
opportunities would tempt many of the terrorist return to the society. That’s why is aws
not easy for the government to ignore the attractive package to sort out the solution of the
Psunjab problems.