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

r Analyze 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
u

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

c 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.
|
  
 i r t t ri t I i

T l tt r ( ritt G r F r ).

"I l r t t r i r .I t t tt r C -C l
t, r i t i t t r t. If
i t t tr , t r r t t t f t
it C -C l ´.

C -C l , f r t l r ti l I i i
1977 ft r t J t D l t r.

L t 1980 , I i l r t
i t r ti i t r r t t r q it i .
Why  Wan  n
r the major market for Pepsi o, the US, seemed to be reaching

saturation levels.

r India was a lucrative destination since its vast population offered a

huge, untapped customer base.

r Increasing urbanization had already familiarized Indians with leading

global brands.
^   al  
 y 
r In May 5, Pepsi o had joined hands with one of India's leading

business houses, the R P oenka (RP ) group, to begin operations

in the country.

r planned to import the cola concentrate and sell soft drinks under the

Pepsi label.

r Pepsi o's entry into India revolved around 'promoting and

developing the export of Indian agro-based products .

a
 


r ihe government did not accept the clause regarding the import of the

cola concentrate.

r ihe use of a foreign brand name (Pepsi) was not allowed as per the

regulatory framework.

r m
 
 
 

 

 


 agricultural revolution

 io create many employment opportunities.

 that would tempt many of the terrorists to return to society...

 
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r ihe company would focus on food and agro-processing and only

25% of the investment would be directed towards the soft drink

business.

r ihe company would not only bring advanced food processing

technology to India, but also provide a boost to the image of products

made in India in foreign market.

r oreign brand name would not be used.

r Half of the production would be export and the export ±import ratio
would be 5: for the period of years ( % of the exports to be of
food products manufactures by the company and 2 % of the exports
to be of food products by another companies)

r reation of jobs for 5 people across the nation , of which 25

were be in Punjab.

r An agriculture research center would be established.

r espite the protest Pepsi food td. Venture was cleared in .

r Pepsi(36. %) came up with joint venture with PAI (36. %) and

Voltas India td(24%).
  
   
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r ihe company had promise to provide jobs to 5 people , but by

it had employed only 3 as direct employ, but by 2,this

figure increased to and by 6 it rose 24 .

r Pepsi also failed to adhere to its commitment to export 5 % of its

production.

r Its exports to fruit/vegetable based products was negligible.

r Pepsi began exporting products such as tea rice and shrimp.

u

r In addition it exports glass bottles leather products, and even
champagne. ritics pointed out these products has also been
exports from India and Pepsi was deliberately not meeting its export
obligation.

r Questions were asked in parliament regarding Pepsi commitment .

r A team of government officials visited company plant and found that

Pepsi had not made any efforts to export 4 % of goods it
manufacture.
 ‘
‘|
al | 
  

r In the early s, the overnment of India was facing a foreign

exchange crisis. Organizations like the International Monetary und

agreed to help the Indian government deal with the financial crisis,

on condition that it liberalized the Indian economy.

r Pepsi benefited from the economic changes in many ways. ihe

removal of various restrictions meant that it no longer had to fulfill

many of the commitments it had made at the time of its entry.

u

c ihe company establish a wholly - owned subsidiary, Pepsi o
Holding India Pvt. td. (PHI), which was completely devoted to the
soft drink business.

r Under the new economic policy , the use of the foreign brand names
in India was allowed onse uently , Pepsi changed its colas name
from ehar Pepsi to Pepsi.

r in 5,the beverage business grew by 5 %.

r PHI¶s turnover surpass the Pepsi¶s turnover by .25 billion

   a

 
ally
r Pepsi's tomato farming project was primarily responsible for increasing

India's tomato production.

r Production increased from 4.24 million tonnes in - 2 to 5.44 million

tones in 5- 6 due to the use of high yield seeds.

r Pepsi offered its contract farmers advanced e uipment such as

transplanters and seeding machines to help them carry out their task

efficiently and speedily.

r ontract farming has been encouraged by Pepsi.

u

r In late , the company finally met its commitment to set up agro

research centers in Punjab and Karnataka.

r Pepsi imported the superior technology from china and transferred it to

the farmers in Punjab and ujarat as a result the Yield per hectare

improve form tones to 3.5, 4.5 tones.

r ompany had invested billion by 2 in India.

r Agri-program had been successful because of its uni ue laboratory-

farm-factory approach.




 


r In 2 , companyµs export added up 3 billion. ihe item exported

included food, basmati rice , gaur gum and soft drink concentrated.

r Pepsi met the soft drink re uirements of many of its plants world wide

through its Indian operation.

r Pepsi had don so much for countries agriculture sector although It was

not bounded to do so after change in regulatory framework.

r In 2 2, join hands with Punjab Agri-Export corporation to process

citrus fruit.
i