• I learned that 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 awaits you as
Coca-Cola.
Pepsi’s entry into India
A lesson in globalization

Presented by-
Sachin Shinde (90)
Jagdish Katarkar (79)
Chetan More (83)
Sonraj Tawade (93)
 Question - 1
• Why do companies like Pepsi need to
globalize? What are the various ways in which
foreign companies can enter a foreign market?
What hurdles and problems did Pepsi face
when it tried to enter India during the 1980s?
• Why do companies like Pepsi need to
globalize?
• Globalization of Market
• Globalization of Production
• Globalization of Investment
 Globalization of Market
• Mass Production
• Diversification of portfolio
• Profit hike
• Adverse business environment
• Demand for the product
 Globalization of Production
• Import restrictions
• Availability of raw material
• Input
• Liberal labor laws
• Cost of transportation
• Export facility
• Matching taste of customer
 Globalization of Investment
• Volume of Global trade
• Congenial environment by country
• FDI
• Control over manufacturing and Marketing
activities
• What are the various ways in which foreign
companies can enter a foreign market?
• Exporting
• Turnkey Projects
• Licensing
• Franchising
• Joint Ventures
• Wholly own subsidies
• What hurdles and problems did Pepsi face
when it tried to enter India during the 1980s?
• 1977 - Closed the operation
• 1980 - Closed Economy
• 1985 - Rejection of Proposal
 Q3
• How did the company react to the changes in
the business environment after liberalization?
• 1991- Liberalization of Indian economy
• 1994- It brought of its partner in venture
-Voltas and PAIC

• Become wholly own subsidiary – PepsiCo

holding India Pvt. Ltd
• Sold off tomato plant to HLL
• Focusing the original business i.e. beverage
• 1996 – Beverage business grew by 50% and
turnover passed to 1.25 billion
 Question-4
• Examine the contract farming initiatives
undertaken by Pepsi in India and explain the
rationale for such initiatives from the company’s
perspective.

• Importance for MNCs to improve the economy.

• Various other ways

 Agriculture
CONTRACT FARMING

A possible option for creating a role

for the Private Sector in Agriculture
 What is Contract Farming ?

ESSENTIALLY
• The farmer is contracted to plant the contractor’s crop
on his land
• Harvest and deliver to the contractor a quantum of
produce, based upon anticipated yield and contracted
acreage
• This could be at a pre agreed price
• Towards these ends, the contractor can supply the
farmer with selected inputs
 What was the Impact?
• Tomato yields increased threefold from 16 – 52 MT/hectare

• Production of tomato in the state of Punjab went up to 200,000 MT from 28,000 MT.

• Fresh market prices for tomato dropped with increased availability.

• Chili contract farming failed bcz of financial crisis in south-east Asia

• Potato contract farming

• Agro-research centre @ Punjab and Karnataka

• Basmati rice

• ground nuts @ Punjab

 Rationale for such
initiative
• Backward integration

• Directly or indirectly related to their

businesses

• Cost saving
• improved access to local markets
• assured markets and prices (lower risks)
• assured and often higher returns
• enhanced farmer access to production
inputs, mechanization and transport
services
• assured quality and timeliness in delivery
why is it important for multinational
corporations to work towards the
improvement of the economics in
the country in which the operates?
• Govt. rules and regulation
• To get support from all
• To sustain
• To expand
• To face local competition
• To create favorable image.
 What are the various other ways in which
this can be done?
• Creating new employment

• CSR

• Diversifying

• Education Assistance

• Adopting Villages
THANK YOU