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Question 3.

How did the Company react to the changes in the Business Environment after the Liberalization of the Indian Economy in the early 1990s? Critically comment on the allegation that Pepsi deliberately did not adhere to most of its commitments.
Answer After Liberalization In 1994, it bought off its partner in venture i.e. Voltas and PAIC Establishing wholly owned subsidiary PepsiCo Holding India Pvt. Ltd. Changed name from Lehar Pepsi to Pepsi Sold off its Tomato Paste Plant in 1995 Gradually reduce the contract farming. Plastic Exports were 67%. Till 1997, the agro research centre was no where. Allegation-: It Failed to create jobs. 50% of employees were working for Concentrate and Bottling Business not for Food processing Business. Pepsi with Futura Polymers Ltd. were reducing the workforce and were more machine oriented. People had More lasting impression of Pepsi than Lehar Pepsi. Export of fruit & vegetable based products was negligible & started exporting Tea, Rice & Shrimps It Failed in its commitment to export 50% production. Products exported were same which use to happen earlier. No changes were brought

Question 4.

Examine the Contract Farming initiatives undertaken by Pepsi in India and Explain the rationale for such initiative from the Companies Perspective. Why is it important for Multinational Corporations to Work towards the Improvement of the Economy of the Countries in which they Operate? What are the other various ways in which this can be done?
ANSWER

Contract Farming Initiative I. II. III. IV. Increase in Tomato crop production Providing High yield seeds to increase the productivity in the tomato cultivation Offered advanced equipments (Free of cost) to increase the speed & efficiency Imported the required material for tomato cultivation

Rationale for Contract Farming a. Rationale behind the contract farming was that in one or the other way company insisted on the development of those crops which were directly or indirectly related to their businesses such as soft drinks, snacks, fruit juices & mineral water. b. Other rationale behind the contract farming was to increase their own business rather than any social welfare. c. Taken initiative for Chilly farming d. Groundnuts production over paddy production e. Rice production Fruits & Vegetable Farming Encouraging farmers to cultivate potato with low sugar content for chips.