Abstract

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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Strategy adopted by a MNC to enter a highly regulated economy.

Keywords

Pepsi, PepsiCo, Indian soft drink market, Globalisation, Entry strategy, Mega-marketing, Lobbying, Contract farming, Political environment, India's liberalisation, Business environment