8-233-100

February 28, 2004

The Maharaja Dilemma:
Can Pepsi Thrive in Sri Lanka?
On January 1
st
, 1997, Mano Wikramanayake, Group ire!tor o" t#e Ma#ara$a %orporation,
re&a'e( in #is )p&anter*s !#air+ #a,in- "ina&&y arri,e( #ome in %o&ombo, .ri /anka0 1is but&er
brou-#t #im a tamba&i an( #an(e( #im a "a' on ona&(son /u"kin 2 Jenrette 3/J4 &etter#ea(0
Mano aske( )is t#at a&&5+ 1is but&er 6i--&e( #is #ea( in a""irmation, a($uste( #is saron- an(
s#u""&e( a6ay to prepare supper0 7"ter #is non-stop roa( s#o6 in 8e6 9ork %ity, Mano #a(
e'pe!te( a pi&e o" "a'es "rom intereste( -roups &ookin- to enter as 3
r(
party in,estors to t#e
e'istin- O&: $oint ,enture bet6een Ma#ara$a an( ;epsi0 )1o6 !ou&( t#ey be t#e on&y takers5+ #e
t#ou-#t to #imse&"0 <#e .ri /ankan e!onomy 6as on t#e rise= ;epsi*s bran( a6areness 6as
-ro6in-= an( t#e Ma#ara$a Or-ani>ation #a( a stron- tra!k re!or( o" marketin- an( (istributin-
a ,ariety o" pro(u!ts in t#e !ountry0
Wit# on&y one "a' in #an(, Mano 6on(ere( about t#e "ate o" t#e $oint ,enture0 1e kne6 t#e $oint
,enture 6as #i-#&y un(er!apita&i>e( an( t#at ;epsi 6as not -oin- to in,est any more e?uity in
t#e pro$e!t0 Fee&in- t#e #ea,y bur(en o" a&& t#e #i-#-interest rate (omesti! &oans t#at #a( #e&pe(
t#e Ma#ara$a*s support operations "or t#e &ast t6o years, Mano pon(ere( #is a&ternati,es0 7"ter
&ar-e !apita& in,estments in bott&in- e?uipment, (istribution tru!ks, an( 6are#ouses, (i( it make
sense "or t#e Ma#ara$a*s to aban(on t#e $oint ,enture5 @" not, !ou&( t#ey turn t#in-s aroun(
6it#out t#e #e&p o" a t#ir( party in,estor5 W#at i" t#e /J o""er is t#e best t#ey !an -et -i,en t#e
po&iti!a& instabi&ity in .ri /anka5 <#ese ?uestions be-an to o,er6#e&m Mano, so #e (e!i(e( to
!a&& #is Finan!e an( Marketin- A;s to (is!uss t#e /J o""er0
Joint Venture Inception: Pepsi & l! Sprin" #ottlers
@n 198B, ;epsi%o @nternationa& be!ame intereste( in (istributin- t#eir !arbonate( pro(u!ts in .ri
/anka an( entere( into a "ran!#ise a-reement 6it# %ey&on %o&( .tores 3%%.40 espite t#e
su!!ess"u& &aun!#, "rustration ?ui!k&y sett&e( in as ;epsi sa6 itse&" )6#ite in t#e market+
1
"or
t#ree strai-#t years0 Furt#er !omp&i!ations arose "rom a &abor (ispute in 1988 6#i!# u&timate&y
10 )W#ite in t#e Market+ re"ers to !ontainers in t#e market 6it# no pro(u!t0
Sanjay Pamnani, Heidi Pellerano, Dhanusha Sivajee and Vidhi Tambiah, MBAs 2004, prepared his !ase "or !lass dis!ussion
raher han o illusrae e""e!ive or ine""e!ive handlin# o" an adminisraive siuaion$
%opyri-#t C 2004 by uke Dni,ersity, <#e Fu?ua .!#oo& o" Eusiness0
$
%&&'$(( The Maharaja Dilemma
"or!e( t#e -o,ernment to take o,er t#e mana-ement o" t#e !ompany un(er emer-en!y
re-u&ations0 @n 1990, ;epsi terminate( t#e "ran!#ise a-reement0 7t t#is time, /es 1am, ;resi(ent
o" ;epsi%o 7sia, rea&i>e( #e nee(e( to "in( a ne6 "ran!#ise partner, ot#er6ise, #e 6ou&( be &e"t
6it# no ot#er option but to pu&& out o" t#e .ri /ankan market !omp&ete&y0
1am turne( to <#e Ma#ara$a %orporation0 7s .ri /anka*s &ar-est pri,ate&y-#e&( !orporation,
Ma#ara$a 6as &ookin- to e'pan( its port"o&io o" internationa& bran(s0 @n 1991, a"ter &en-t#y
ne-otiations, ;epsi a6ar(e( t#e "ran!#ise to t#e Ma#ara$a %orporation0 Dn(er t#e a-reement
3F'#ibit 14, Ma#ara$a 6ou&( ser,e as t#e e'!&usi,e ;epsi "ran!#isee in .ri /anka an( 6ou&(
be-in by bott&in- an( marketin- 300m& -&ass bott&es o" t#e G;epsi*, GMirin(a*, an( G7-Dp* bran(s
"or a term o" "i,e years0 <#e $oint ,enture 6as name( a"ter Ma#ara$a*s e'istin- )O&: .prin-s+
manu"a!turin- "a!i&ity 6#i!# in 1992 6as retro"itte( into a bott&in- p&ant0 <#e p&ant 6as &o!ate(
on a 190B a!re property, in t#e Fastern outskirts o" %o&ombo0 @nitia&&y, t#e p&ant emp&oye( 2HB
emp&oyees an( #a( a !apa!ity &e,e& o" 480 bott&es per minute 3bpm4
@n 1992, ;epsi 6as o""i!ia&&y re-&aun!#e( in .ri /anka un(er t#e 6ar(s#ip o" a ;epsi%o re-iona&
o""i!e in ;akistan0 <#e ;akistani o""i!e supporte( t#e &aun!# 6it# an a( !ampai-n "eaturin-
mo(e& %&au(ia .!#i""er (rinkin- out o" a !an o" ;epsi 3F'#ibit 240 <#e &aun!# (ate 6#i!# is
usua&&y a (ay o" !e&ebration ?ui!k&y be!ame a (ay o" !on!ern "or t#e Ma#ara$a %orporation0
<#ey sat in t#eir o""i!es 6on(erin- 6#y t#e a(,ertisement pro,i(e( by ;epsi "eature( a !an
6#en on&y bott&es 6ere so&( in .ri /anka0 7((itiona&&y, t#e entire ;akistani team (i( not turn up
"or t#e &aun!# on a!!ount o" a re&i-ious "esti,a&0 %ou&( t#is be a si-n o" t#in-s to !ome5
Dn"ortunate&y, t#e ans6er 6as )yes,+ as t#e ;akistani team !ontinue( to (emonstrate &itt&e
!ommitment to t#e $oint ,enture0 7s a resu&t, t#e ,enture stru--&e( (urin- t#e "irst t#ree years o"
operation reportin- &oses o" ./ Iupees 409 mi&&ion, 009 mi&&ion an( 78 mi&&ion0 <#e operation
6as #i-#&y un(er!apita&i>e(, but t#e Ma#ara$a %orporation 6as not 6i&&in- to in,est "urt#er
un&ess ;epsi 6as 6i&&in- to (o t#e same0
@n 199B, Io-er Fnri!o took o,er t#e rei-ns o" ;epsi%o @n!0 Mr0 Fnri!o 6as a bri&&iant marketer
6#o un(erstoo( t#e importan!e o" bui&(in- tru&y -&oba& bran(s0 @n May, #e in"use( t#e pro$e!t
6it# a J2 mi&&ion e?uity in,estment an( mo,e( 6ar(s#ip to ;epsi%o @n(ia 3F'#ibit 340 Wit#
;epsi%o*s rene6e( !ommitment to t#e ,enture an( positi,e out&ooks "or t#e .ri /ankan
e!onomy, t#e Ma#ara$a %orporation sa6 an opportunity to turn t#is ,enture aroun(0 1o6e,er,
t#e !apita& in"usions (i(n*t pro,e to be su""i!ient0 <#e Ma#ara$a*s 6ere sa((&e( 6it# #i-#-
interest (ebt an( ;epsi*s market s#are #a( not -ro6n as pro$e!te(0 .in!e ;epsi 6as not 6i&&in- to
make any a((itiona& in,estments in t#e ,enture, it be!ame !&ear t#at a t#ir( party in,estor 6as
t#e ans6er to t#eir "inan!ia& 6oes0
@n e!ember199H as t#e .ri /ankan e!onomy be-an to re!o,er, Mano Wikramanayake, Group
ire!tor o" t#e Ma#ara$a %orporation, "&e6 to 8e6 9ork to pit!# O&: to a -roup o" potentia&
in,estors0 1e 6as &ookin- to in,oke interest in a pri,ate p&a!ement in O&: an( re!ei,e(
"a,orab&e re,ie6s "rom in,estors 6#o 6ere e'treme&y bu&&is# on 7sian e!onomies at t#at time0
Furt#er #e (is!&ose( to in,estors, O&:*s p&ans to -o pub&i! a"ter t6o years "irst on t#e &o!a& sto!k
e'!#an-e an( t#en in t#e D. ,ia an 7I o""erin- 6#i!# 6ou&( a&&o6s in,estors an e'it an( an
opportunity to make an attra!ti,e return on t#eir initia& in,estment0 7"ter t6o 6eeks o" meetin-s,
%
%&&'$(( The Maharaja Dilemma
Mano returne( to .ri /anka #ope"u& t#at O&: 6as -oin- to re!ei,e t#e ne!essary !apita& to
restru!ture operations an( be-in to ri,a& ;ure Ee,era-es an( %%. "or market s#are0
<o Mano*s (ismay, on&y one in,estor, ona&(son /u"kin 2 Jenrette 3/J4, a pub&i!&y #e&( D0.0-
base( in,estment bank an( "inan!ia& ser,i!es pro,i(er, submitte( a proposa&0 1i-#&i-#ts o"
/J*s o""er are s#o6n in F'#ibit 40 @t 6as ob,ious "rom t#e o""er t#at /J 6as !on!erne( about
t#e ,arious risks t#at !ou&( p&a-ue a pro$e!t in an emer-in- market &ike .ri /anka an( 6ante(
substantia& (o6nsi(e prote!tion "or its in,estment0 1o6e,er, 6ere t#ey askin- "or too mu!#5
W#ere t#ere ot#er 6ays "or t#e Ma#ara$a*s to miti-ate /J*s !on!erns5
Sri Lanka
.ri /anka, 3F'#ibit B4, is an is&an( o"" t#e sout#east !oast o" @n(ia0 @t is appro'imate&y t#e si>e o"
@re&an( but 6it# a popu&ation t#e si>e o" 7ustra&ia 319m40 <#ere are t6o main et#ni! -roups, t#e
.in-#a&ese 3Eu((#ist ma$ority4 an( <ami&s 31in(u minority40 <#ere are a number o" ot#er
important minorities su!# as Mus&ims, %#ettia#s, .in(#is an( Furasian )Eur-#ers+0 .ri /anka is
ri!# in natura& resour!es0 @ts main in(ustries in!&u(e a-ri!u&ture, minin- an( tourism0
Dn"ortunate&y, t#e is&an( #as ne,er been ab&e to "u&&y e'p&oit its resour!es be!ause o" t#e
(e,astatin- et#ni! !on"&i!t t#at #as ra-e( sin!e 19830 3F'#ibit H4
)thnic Con*lict
.ri /anka 6as !o&oni>e( in turn by t#e ;ortu-uese, ut!# an( t#e Eritis#0 <#e Eritis# emp&oye(
t#eir )(i,i(e an( !on?uer+ approa!# to a(ministerin- t#e is&an(0 <#ey "oun( a minority o"
<ami&s an( .in-#a&ese open to %#ristian !on,ersion0 <#ey -a,e t#e top a(ministrati,e posts to
t#is %#ristian )e&ite+ 6#o en$oye( po6er an( pri,i&e-e o,er t#e Eu((#ist ma$ority0 7"ter
in(epen(en!e in 1948, a .in-#a&ese %#ristian -o,ernment !ame to po6er an( up#e&( ri-#ts "or
a&& minorities0 1o6e,er, on t#e 6a,e o" a Eu((#ist ba!k&as#, a &ea(in- %#ristian .in-#a&ese,
.0W0I0 Ean(aranaike, !on,erte( to Eu((#ism an( !ame to po6er promisin- to en( non-
Eu((#ist po&i!ies0 7 Eu((#ist monk &ater assassinate( #im be!ause #e 6as yie&(in- too mu!# to
#is erst6#i&e %#ristian !o&&ea-ues0 <#us, !onse?uent -o,ernments intro(u!e( e,en more po&i!ies
"a,orin- t#e Eu((#ist ma$ority at t#e e'pense o" ot#er minorities0
<#e <ami&s starte( a pea!e"u& stru--&e "or t#eir ri-#ts 6#i!# &aste( "rom t#e ear&y B0*s to &ate
70*s0 7 ne6 pro-Eu((#ist -o,ernment in 1978 si(e&ine( <ami& an( ot#er minority ri-#ts "urt#er
an( intro(u!e( a ne6 )e'e!uti,e presi(en!y+ t#at #a( t#e ri-#ts to (isso&,e par&iament an( e""e!t
mi&itary !ontro& 6it#out re!ourse to t#e par&iament0 <#is -o,ernment insti-ate( yet more
po&i!ies to "a,our t#e ma$ority0 <#e <ami&s rea!te( ,io&ent&y in t#e 8ort# o" t#e !ountry, ki&&in-
po&i!emen an( mi&itary personne&0 Ft#ni! tensions rose to a peak in 1983 6#en an a&&e-e(
-o,ernment-&e( riot 6as (ire!te( to6ar(s <ami&s in %o&ombo an( se,era& ot#er to6ns0 <ami&
businesses an( #omes 6ere ra>e(0 <ami&s 6#o !ou&( a""or( to "&ee t#e !ountry sou-#t re"u-e in
t#e DK, D., %ana(a an( 7ustra&ia0 Ot#ers riske( &i"e an( &imb !ramme( on boats #ea(e(
to6ar(s @n(ia0 <#ose <ami&s &e"t be#in( 6a-e( a -ueri&&a sty&e 6ar &e( by Ae&&upi&&ai ;rabakaran
- )t#e Fo'+0 <#e <ami& <i-ers as t#ey be!ame kno6n soon be!ame a #i-#&y (is!ip&ine( an(
e""e!ti,e -ueri&&a -roup0 <#eir )sui!i(e bombin-s+ ?ui!k&y be!ame a tra(emark0 7ssassinations
&
%&&'$(( The Maharaja Dilemma
attribute( to t#em in!&u(e Ia$i, Gan(#i 3"ormer @n(ian ;rime Minister L "or #is (e!ision to sen(
in t#e @n(ian ;ea!ekeepin- For!e4 an( Ianasin-#e ;rema(asa 3;resi(ent o" .ri /anka40 <#e
-o,ernment respon(e( by in!urrin- !ur"e6s an( a #i-# mi&itary presen!e in %o&ombo0
)+chan"e ,ate an- .DP
<#e .ri /ankan Iupee 3./I4 is a&&o6e( to "&oat a-ainst a basket o" !urren!ies 6it# t#e D.J as
t#e inter,ention !urren!y0 <#e %entra& Eank maintains a 2M mar-in bet6een (ai&y buyin- an(
se&&in- rates, to -ui(e !ommer!ia& banks in ?uotin- t#eir rates0 <#e ,a&ue o" t#e Iupee #as
"&u!tuate( sin!e 1978, but t#e o,era&& tren( #as been (o6n6ar(s, 3F'#ibit 74, re"&e!tin- t#e
persistent !urrent-a!!ount (e"i!it an( re&ati,e&y #i-# in"&ation rates0 3F'#ibit 84
@n 1989, a ri-orous &ibera&i>ation pro-ram 6as intro(u!e( by Mr0 ;rema(asa*s D8; -o,ernment0
<#e e!onomi! re"orm pro-ramme 6as supporte( by an @MF Fn#an!e( .tru!tura& 7($ustment
Fa!i&ity 3F.7F40 .tabi&i>ation measures in!&u(e( a (e,a&uation o" t#e Iupee an( t#e abo&ition o"
ma$or subsi(ies0 <#ese 6ere !omp&emente( by an ambitious pri,ati>ation (ri,e0 <a', tari"" an(
tra(e re"orms 6ere a&so institute( an( t#e !urrent a!!ount 6as "ree( o" e'!#an-e !ontro&s0 G;
-ro6t# rose "rom 203M in 1989 to H09M in 19930 <#e ;eop&e*s 7&&ian!e 3;74 -o,ernment
p&e(-e( itse&" to !ontinue 6it# t#e e!onomi! re"orm pro-ramme0
.in!e 1991, t#e s#are o" in(ustry 3manu"a!turin-, !onstru!tion an( uti&ities4 #as in!rease( "rom
2B07M to 2808M o" rea& G;0 3F'#ibit 94 @n parti!u&ar, manu"a!turin- #as emer-e( as t#e &ea(
se!tor un(erpinnin- e!onomi! -ro6t#0 ;ro-ressi,e pri,ati>ation o" state enterprises #as enab&e(
t#e pri,ate se!tor to (ominate manu"a!turin-0 .ma&& an( me(ium enterprises a!!ount "or near&y
90M o" pri,ate in(ustria& units0 <#e ser,i!es se!tor a!!ounte( "or 4807M o" G; in 199B an( is
prin!ipa&&y !ompose( o" 6#o&esa&e an( retai& tra(e, "inan!ia& ser,i!es, transport an(
!ommuni!ations, pub&i! a(ministration an( (e"ense an( tourism0 3F'#ibit 104
Monetar/ Polic/
@n re!ent years, monetary po&i!y #as "o!use( prin!ipa&&y on t#e !ontro& o" in"&ation 6it# t#e
%entra& Eank re&yin- on in(ire!t po&i!y instruments in!&u(in- open market operations in
<reasury bi&&s an( %entra& Eank se!urities to in"&uen!e t#e -ro6t# o" monetary a--re-ates0 @n
1992-93 monetary -ro6t# 6as "ue&&e( to a -reat e'tent by a &ar-e in!rease in "orei-n !apita&
in"&o6s an( an e'pansion in pri,ate-se!tor !re(it 6#i!# ne!essitate( t#e operation o" a ti-#t
monetary po&i!y0 3F'#ibit 114 @n 1993-9B, an e,en stron-er emp#asis on !ontro&&in- in"&ation &e(
to a ti-#tenin- o" monetary po&i!y to !ompensate "or #i-# (e"ense spen(in- an( a 6i(enin-
"is!a& (e"i!it0
1i-# in"&ation #as been a persistent prob&em in .ri /anka o,er t#e past (e!a(e0 3F'#ibit 84 %ost-
pus# "a!tors su!# as 6a-e a($ustments, in!reases in in(ire!t ta'es, #i-# interest rates an(
e'!#an-e rate (epre!iation #a,e !ontribute( to in!reases in t#e pri!e &e,e&0 3F'#ibit 124 .easona&
s!ar!ities o" a-ri!u&tura& !ommo(ities an( ine""i!ient a-ri!u&tura& pro(u!tion #a,e a&so been
responsib&e0 @n re!ent years, t#e prin!ipa& !auses o" (eman(-in(u!e( in"&ationary pressures #a,e
been t#e #i-# &e,e& o" -o,ernment spen(in- an( t#e rapi( rate o" monetary e'pansion0 @n 1988-
0
%&&'$(( The Maharaja Dilemma
93 annua& a,era-e in"&ation 6as 130HM0 @t 6as suppresse( arti"i!ia&&y to 804M in 1993 an( to
707M in 1994 by a !ombination o" subsi(ies an( re(u!tions in key a(ministere( pri!es0
;ersistent&y #i-# in"&ation #as pre,ente( any rea& in!rease in in!omes sin!e 6a-e in!reases #a,e
-enera&&y not kept pa!e 6it# t#e rise in pri!es0 <#ere are no re&iab&e statisti!s "or in!ome
(istribution, but ane!(ota& e,i(en!e su--ests a marke( (eterioration in in!ome (isparities0 <#us,
many in(ustries #a,e been a(,erse&y a""e!te( by strikes initiate( by &aborNtra(e union "or!es
seekin- to reme(y t#is ma&a(y0 3F'#ibit 134 Iisin- "oo( pri!es #a,e a&so pre,ente( any
si-ni"i!ant rise in (is!retionary spen(in- 6it# more t#an 8BM o" in!omes bein- spent on basi!
ne!essities0
.in!e t#e a,era-e rate o" in"&ation in .ri /anka #as ten(e( to be #i-#er t#an t#ose o" its
!ompetitors, t#e !ountry*s e'port pri!e !ompetiti,eness #as su""ere(0 <#is prob&em #as been
e'a!erbate( by #i-# interest rates an( t#e &a!k o" sour!es o" !on!essionary "inan!in- to t#e
e'port se!tor0 .in!e e'!#an-e rate (epre!iation a&so "ue&s in"&ation, t#e -o,ernment #as been
re&u!tant to (e,a&ue t#e !urren!y to t#e e'tent e'porters are (eman(in-0
Maharaja Corporation
<#e Ma#ara$a Group is .ri /anka*s &ar-est !on-&omerate in terms o" sa&es 6it# an annua&
turno,er o" D. J 17B mi&&ion "or t#e year en(e( Mar!# 31, 199H0 <#e t6o "oun(in- members
Mr0 . Ma#a(e,an an( Mr0 . Ia$an(ram #a( 6orke( "or an 7meri!an "irm !a&&e( o(-e 2
.eymore /t( 6#i!# #e&( a-en!ies in .ri /anka "or prominent !ompanies su!# as Dnion %arbi(e
/imite(, %o&-ate ;a&mo&i,e /imite(, 9a&e 2 <o6ne /imite(, %#ampion .park ;&u-s /imite(,
;arker ;en /imite( an( %#eeseborou-#-;on(*s @n!0 7t t#e time o" Wor&( War @@, o(-e 2
.eymore !&ose( t#eir o""i!e in .ri /anka 3t#en kno6n as %ey&on4 an( #an(e( o,er t#e a-en!ies
to Messrs . Ma#a(e,an an( . Ia$an(ram0
7t t#e in!eption, t#e a-en!ies 6ere ser,i!e( on an in(ire!t basis #o6e,er -ra(ua&&y t#rou-# time
t#e (istribution rea!# e'ten(e( beyon( t#e !apita& !ity o" %o&ombo to ot#er parts o" t#e !ountry0
<#is e""e!ti,e&y &ai( t#e "oun(ations "or a "ormi(ab&e sa&es net6ork t#at 6as &e,era-e( in &ater
years to intro(u!e pro(u!ts "rom ot#er a-en!ies an( $oint ,entures0
<#e Ma#ara$a Or-ani>ation 6as in!orporate( in 19H7 t#ou-# a mer-er bet6een t#e ,arious
subsi(iaries L Ia$a(rams /imite(, Ma#ara$a istributors /imite( an( 70F0 Jones 2 %o0 /imite(0
.in!e 19H7 t#e Ma#ara$a Group #as been run by Messrs I Ma#ara$a an( I Ia$ama#en(ran
$oint&y as Mana-in- ire!tors
@n 1997, t#e Group*s operations remaine( #i-#&y (i,ersi"ie( 6it# interests in imports, &o!a&
manu"a!turin-, (istribution an( marketin-, e'port !ommo(ity tra(in-, tourism, !&earin- an(
"or6ar(in-, pro$e!t (e,e&opment, !omputer ser,i!es, so"t (rink bott&in-, te&e,ision an( ra(io
broa(!astin-, sate&&ite !ommuni!ations, beauty !are, a "&yin- s!#oo& an( a (omesti! air ser,i!e0
One o" t#e Group*s most su!!ess"u& $oint ,entures 6as 6it# t#e 8e6 Oea&an( airy Eoar( t#at
manu"a!tures an( markets mi&k an( mi&k pro(u!ts in .ri /anka un(er t#e G7n!#or* Eran( name0
<#e Ma#ara$a Group*s e'!e&&ent (istribution net6ork #as ma(e it a #ouse#o&( name in a
1
%&&'$(( The Maharaja Dilemma
pre(ominant&y rura& !ountry an( its marketin- tra!k re!or( ma(e t#e !ompany t#e top !#oi!e o"
partners in $oint ,entures in t#e .ri /ankan market0 Furt#ermore, t#e Group 6as a&so ab&e to
uti&i>e its o6ners#ip an( presen!e in me(ia operations to promote its $oint ,enture an( marketin-
operations0
PepsiCo International 3F'#ibit 144
<#e !arbonate( so"t (rink market #a(, in re!ent years be!ome in!reasin-&y !ompetiti,e as
Western markets mature( an( mu&tinationa& "irms be-an in!reasin- -&oba& operations as a means
o" !ontinue( -ro6t#0 1istori!a&&y, t#e ear&y mo,er into a )6#ite market+ 3an area 6it# no
pre,ious (istribution o" %oke or ;epsi4 !ontinue( to #o&( t#e ma$ority market s#are as t#e market
mature(0 <#us, it 6as seen as !riti!a& to enter ne6 markets as soon as t#ey be!ame po&iti!a&&y an(
e!onomi!a&&y a!!essib&e0
@nstea( o" -oin- #ea(-to-#ea( 6it# %oke in a&most e,ery market in t#e 6or&(, ;epsi #a( "o!use(
its e""orts on #i-#-potentia& emer-in- markets su!# as %#ina, @n(ia, Iussia an( Aietnam0 <#ese
!ountries #a( #i-# popu&ations an( &o6 so"t (rink !onsumption rates, 6#i!# trans&ate( into
tremen(ous -ro6t# prospe!ts0 3F'#ibit 1B4 ;epsi*s strate-y 6as to !apita&i>e on t#is -ro6t# by
&e,era-in- its a&rea(y stron- market position 3at &east 20M market s#are4 in t#ese markets0
3F'#ibit 1H4
Ey 1997, ;epsi%o 6as se&&in- about t#ree bi&&ion 8-o> !ases o" so"t (rinks outsi(e 8ort# 7meri!a
un(er a (i""erent set o" bran(s t#at in!&u(e( .e,en-Dp, Mirin(a 3oran-e so(a4 an( ;epsi Ma' 3no
!a&orie !o&a40 7bout H0M o" ;epsi*s internationa& ,o&ume 6as so&( by in(epen(ent bott&ers,
6#i&e t#e remainin- 40M 6as #an(&e( by bott&ers in 6#i!# ;epsi%o eit#er !ontro&&e( or #a(
some e?uity stake0
@n e,a&uatin- t#e merits o" enterin- a ne6 market or makin- a ma$or in,estment in re,i,in- an
o&( one, ;epsi%o &ooke( "or a 14M interna& rate o" return, a"ter a($ustin- "or e'pe!te( in"&ation
an( !ountry risk, o,er a 12-year #ori>on0 ;epsi%o a&so measure( t#e su!!ess o" an in,estment
a-ainst a 7M !orporate IO7 tar-et0 <#ese !riteria 6#ere t#en supp&emente( 6it# a "i,e"o&(
!#ara!teri>ation o" in,estment opportunitiesP
Ei- (e,e&ope( so"t (rink markets=
.ma&&er or riskier markets=
Opportunities to in,est in $ump-startin- !#anne&s or se-ments 6it#in t#e "irst t6o
!ate-ories=
21
st
!entury markets= an(
<urnaroun( opportunities as t#e bott&er o" &ast resort0
;epsi%o #a( !ate-ori>e( .ri /anka in t#e se!on( o" t#ese "i,e !ate-ories0 @t &ooke( at .ri /anka
as a natura& e'tension o" its in,estment in @n(ia, 6#i!# it !ate-ori>e( as a t6enty-"irst !entury
market0 1o6e,er, t#ey !ou&( not i-nore t#e in#erent &imits on si>e o" popu&ation an( -ro6t#
p&us t#e risks t#at .ri /anka bore as a !ountry en-a-e( in !i,i& 6ar0 From ;epsi*s perspe!ti,e, it
6as !riti!a&&y important "or O&: to !apture market s#are0 Ie,enue "rom t#e sa&e o" bott&es 6as a
2
%&&'$(( The Maharaja Dilemma
se!on(ary !on!ern "or ;epsi, espe!ia&&y as its returns 6ou&( be &ar-e&y -enerate( by t#e sa&es o"
!on!entrate to O&:0
The So*t Drink In-ustr/
<#e so"t (rink in(ustry is !ompose( o" "our key p&ayersP "ran!#ise !ompanies, bott&ers, retai&ers
an( !onsumers0 Fran!#ise !ompanies are t#e o6ners o" t#e bran(s0 <#ey manu"a!ture t#e so"t
(rink !on!entrate an( market t#e bran(s0 <#e "ran!#isers business en$oys #i-# -ross mar-ins o"
!&ose to 80M0 <#eir bi--est e'penses !ome "rom marketin-, a(,ertisin-, promotion, market
resear!# an( mana-in- t#eir net6ork o" bott&ers0 <#e bott&ers pur!#ase t#e !on!entrate, mi' it
6it# s6eeteners, an( !arbonate( 6ater, pa!ka-e an( (istribute t#e "inis#e( pro(u!t an( promote
t#e pro(u!ts &o!a&&y0 3F'#ibit 174 <#e bott&er*s business is ,ery !apita& intensi,e nee(in-
spe!ia&i>e(-#i-# spee( e?uipment, (istribution tru!ks, 6are#ouses an( in"o mana-ement
systems0 <#e bott&er*s -ross mar-ins are mu!# &o6er, typi!a&&y in t#e 1B-4BM ran-e0 Eott&ers
u&timate&y #a,e t#e !#oi!e on #o6 t#e pro(u!t is presente( to t#e market0 @n emer-in- markets
&ike .ri /anka, bott&ers pre"er to pa!ka-e t#eir pro(u!ts in -&ass bott&es be!ause 6it# t#e &o6er
pri!e points, t#e reusab&e pa!ka-e "ormat is more a""or(ab&e as oppose( to t#e (isposab&e
a&uminum !ans0
The Sri Lankan So*t Drink Market
7&t#ou-# a!!urate in"ormation about t#e .ri /ankan !arbonate( so"t (rink market is (i""i!u&t to
obtain (ue to t#e absen!e o" a tra!kin- a-en!y, tota& !onsumption is estimate( to be at aroun(
1H0B mi&&ion !ases per year an( pro$e!te( to -ro6 to appro'imate&y 20 mi&&ion !ases per year by
20040 .ri /anka*s per !apita so"t (rink !onsumption is one o" t#e #i-#est in t#e re-ion 322
ser,in-s4 beatin- out @n(ia 3B4 an( ;akistan 31340 1o6e,er, so"t (rink !onsumption is on&y one-
t#ir( o" t#e be,era-e market as non-!arbonate( (rinks &ike &emonN&ime an( oran-e !ontinue to be
t#e bi- se&&ers0 <#e market is #i-#&y seasona& 6it# a 30M-40M (rop in sa&es (urin- 6inter an(
summer monsoon mont#s an( #i-#&y (epen(ent on tourism0 @n(ustry e'perts pro$e!t t#at t#e
!arbonate( so"t (rink market 6i&& -ro6 at 7M annua&&y in t#e "oreseeab&e "uture0
<#e !arbonate( so"t (rinks market is (ominate( by t#ree ma$or p&ayers L t#e &o!a& F&ep#ant
1ouse bran( o6ne( by Jo#n Kee&&s an( mana-e( by %ey&on %o&( .tores, %oke (istribute( an(
markete( by ;ure Ee,era-es, an( ;epsi (istribute( an( markete( by t#e Ma#ara$a Group0 <#e
F&ep#ant 1ouse bran( &ea(s 6it# a market s#are estimate( to be 4BM "o&&o6e( by %oke an(
;epsi 6it# 42M an( 1BM s#are respe!ti,e&y0 3F'#ibit 184
@n t#e ear&y 1980*s, t#e .ri /anka so"t (rink market 6as !ontro&&e( by t#e -o,ernment un(er a
)!ompetent aut#ority+ arran-ement0 1o6e,er, (espite t#e &a!k o" !ompetition an( a !apti,e
market, t#e business 6as poor&y run0 @n 1982, t#e -o,ernment-run a-en!y 6as restru!ture( an(
rename( %ey&on %o&( .tores 3%%.40 %%. 6as &ater pur!#ase( by t#e Jo#n Kee&&s 1o&(in-s
3JK14 Group in 19910 %%. number one asset is - t#e )F&ep#ant 1ouse Eran(+ o" so"t (rinks
6#i!# #as been aroun( sin!e t#e 19
t#
!entury0 %%. #as pre(ominant&y "o!use( on pro(u!t
3
%&&'$(( The Maharaja Dilemma
se-ments 6#ere its !ompetitors are re&ati,e&y 6eak or (o not #a,e a !omparab&e (rink &ike "ruit
"&a,ore( so"t (rinks so&( un(er t#e F&ep#ant 1ouse Eran(0 %urrent&y, t#ere are "i,e (i""erent "ruit
"&a,ors, 6#i!# a!!ount "or HBM o" re,enues0 @ts p&um "&a,ore( so"t (rink G8e!to* en$oys stron-
!onsumer pre"eren!e - espe!ia&&y sin!e t#ere is no !omparab&e pro(u!t in t#e market0 %%. #as
tra(itiona&&y p&a!e( -reater emp#asis on pri!in- an( o""ers t#e %%. 400m& bott&e "or t#e same
pri!e as 300m& bott&es o" ;epsi an( %oke0 <#is &ar-e si>e a&&o6s t#e (rink to be s#are( by t6o
!onsumers e""e!ti,e&y #a&,in- t#e pri!e per !onsumer in a #i-#&y pri!e !ons!ious market0 <#e
F&ep#ant 1ouse bran( #as -reat re!a&&, t#e .in-#a&ese 6or(s )7&iya Eeanna+ 3meanin- F&ep#ant
Eran(4 are t#e !o&&o?uia& term "or a so"t (rink0 Furt#ermore, t#e bran( !omman(s a #i-#
premium amon- (istributors an( retai&ers 6#o 6i&&in-&y pay in !as# "or a&& pur!#ases0 <#us,
Jo#n Kee&&s #as #a( >ero (e"au&ts 6#i&e its !ompetitors #a,e su""ere( "rom substantia& ba( (ebt
prob&ems0
%oke entere( .ri /anka in t#e ear&y 19H0s by -rantin- a bott&in- "ran!#ise to t#e ;ure Ee,era-e
%ompany, a &o!a& .ri /ankan bott&er0 ;ure Ee,era-e 6as aut#ori>e( to (istribute an( market
%o!a %o&a, .prite an( Fanta0 %oke !ou&( not make mu!# #ea(6ay in t#e market unti& t#e &ate
1970s0 7t t#at time, t#e F&ep#ant 1ouse 6as #a,in- se,ere mana-ement prob&ems an( t#e
e!onomy #a( be-un to open up0 Wit# t#e intro(u!tion o" te&e,ision, %oke 6as ab&e to !apture
t#e ima-ination o" t#e .ri /ankan !onsumers t#rou-# attra!ti,e a(,ertisin- !ampai-ns0 Ee#in( a
stron- a(,ertisin- pus#, %oke 6as ab&e to o,ertake F&ep#ant 1ouse in t#e ear&y 80*s0 Ey 1991,
prior to Jo#n Kee&&s takin- o,er %%., %oke #a( !apture( near&y 70M o" t#e market0 @n response
to %oke*s a(,ertisin-, %%. mo,e( into more a--ressi,e a(,ertisin- aime( at spe!i"i! market
ni!#es 6#i!# p&a!e( more emp#asis on t#e taste pre"eren!es o" !onsumers0 @n e!ember 199H,
;ure Ee,era-e*s Ka(u6e&a p&ant 6as s#ut (o6n "or a&most "our mont#s (ue to &abor prob&ems0
<#is resu&te( in se,ere supp&y prob&ems &ea(in- to an 8M "a&& in %oke*s market s#are to 42M0
%%. !apita&i>e( on %oke*s prob&ems an( in!rease( its market s#are by HM to 4HM0 7&t#ou-# it
#as been present in t#e market "or more t#an t#ree (e!a(es, %oke #as ne,er been ab&e to sustain a
si>ab&e market s#are &ike it #as in ot#er internationa& markets0 <#e main reason "or t#is (isparity
6as t#e step-mot#er&y treatment to6ar(s t#e .ri /ankan market "rom %oke*s .out# 7sian
#ea(?uarters 6#i!# o,ersa6 operations in .ri /anka0
l! Per*ormance
O&: #a( s#o6n poor resu&ts "rom its in!eption an( 6as yet to make a pro"it0 F'#ibit 19 s#o6s t#e
!apita& in"usion s!#e(u&e 6#i!# 6as re?uire( to keep t#e business reasonab&y !apita&i>e(0 7 &ot
o" t#e initia& (eman(s arose "rom t#e nee( to put an e""e!ti,e (istribution system in p&a!e t#at
!ou&( not on&y (istribute t#e pro(u!t but a&so !o&&e!t t#e empty -&ass bott&es "or re-use0
7((itiona&&y t#e initia& pro(u!tion o" -&ass bott&es, pur!#ase o" (istribution e?uipment an(
a!?uisition o" !oo&ers 3-i,en "ree o" !#ar-e to retai&ers4 ne!essitate( #ea,y !apita& e'pen(iture0
1o6e,er t#e main !ontributor to t#e ne-ati,e bottom &ine 6as t#e #i-# operatin- !ost 6#i!# 6as
bein- -ra(ua&&y ree&e( in0 7"ter t#e initia& years 6#ere t#e Ma#ara$a*s #a( &earnt t#e ins an( outs
o" t#e so"t (rinks business, t#e manu"a!turin- an( (istribution operations #a( starte( to run more
e""i!ient&y0 Just t#en t#at a series o" mi&itant atta!ks bou-#t a !risis in .ri /anka resu&tin- in
4
%&&'$(( The Maharaja Dilemma
tourists, substantia& !onsumers o" !o&( (rinks in .ri /anka, staye( a6ay "rom t#e !ountry0 <#is
&ar-e&y !ontribute( to anot#er &oss makin- year, t#e "ourt# in a ro6, at O&:0
<#e ne't year a pea!e 6as restore( an( O&:*s prospe!ts on!e a-ain &ooke( bri-#t0 <#e .ri /anka
e!onomy 6as on!e on t#e ups6in- an( t#e Ma#ara$as -ot rea(y "or a massi,e !ampai-n to 6in
market s#are "rom t#eir !ompetitors0 <#ey rea&i>e( t#is 6ou&( re?uire a "res# (ose o" !apita&
in$e!tion into t#e ,enture0 7&rea(y sa((&e( 6it# a #ea,y an( e'pensi,e (ebt &oa(, t#e on&y ,iab&e
a&ternati,e 6as e?uity in"usion0 7&t#ou-# t#e "irm*s pro$e!tions &ooke( ,ery attra!ti,e 3F'#ibit
20 2 214, bot# t#e Ma#ara$as an( ;epsi 6ere #esitant to a(( to t#eir si>eab&e e?uity stake0 Eot#
si(es #o6e,er "e&t t#at -i,en t#e buoyant market !on(itions, t#ere 6ou&( be p&enty o" t#irsty
in,estors 6#o 6ou&( be 6i&&in- to )-u>>&e (o6n+ t#e risk0
Maharaja Dilemma
Gi,en t#e !ompetiti,e &an(s!ape an( t#e !urrent po&iti!a& an( e!onomi! en,ironment in .ri
/anka, it 6as e,i(ent t#at Mano 6as "a!in- a tou-# (e!ision in terms o" se!urin- an outsi(e
in,estor in t#e O&: $oint ,enture0 1e 6as "ast runnin- out o" time an( !apita& but remaine(
un!&ear as to t#e attra!ti,eness an( "easibi&ity o" t#e /J proposa&0 %ou&( #e ne-otiate a better
(ea& or 6as #e at t#e mer!y o" /J o""er an( t#e ambi-ious put option !&ause5
7s Mano "inis#e( up #is tamba&i, #e pon(ere( t#e best approa!# to reso&,in- Ma#ara$a*s
(i&emma0 7n 8;A ,a&uation "rom t#e perspe!ti,e o" a t#ir(-party in,estor seeme( &ike( an
interestin- ana&ysis but #o6 6ou&( #e estimate !as# "&o6s an( t#e a&& important (is!ount rate5
Mano put (o6n #is -&ass an( starte( to !a&& #is truste( Marketin- an( Finan!e A;*s0
5
%&&'$(( The Maharaja Dilemma
)+hi6it $: .ummary o" 7-reement bet6een ;epsi%o @nternationa& an( <#e Ma#ara$a %orporation
;epsi%o, @n!0 entere( into t#ree a-reements 6it# t#e %ompany 3O&:4 in 1992 a&&o6in- to e'!&usi,e&y
market G;epsi*, GMirin(a* an( G7-Dp* so"t (rinks0 <#ese a-reements are ,a&i( "or a term o" "i,e years
319974 an( !an be automati!a&&y e'ten(e( "or one a((itiona& perio( o" "i,e years 320024 so &on- as t#e
%ompany is not in (e"au&t o" any o" its ob&i-ations0
<#ese a-reements a&so pro,i(e "orP 3i4 t#e a&&o!ation o" a(,ertisin- e'penses an( 3ii4 t#e !ost o" t#e
!on!entrate t#at t#e %ompany pur!#ases "rom ;epsi%o, @n!0
7s part o" t#e e'!&usi,e bott&in- a-reements bet6een t#e %ompany an( ;epsi%o, @n!0 in respe!t o"
G;epsi*, GMirin(a*, an( G7-Dp* bran(s, ;epsi%o, @n!0 #as a-ree(, sub$e!t to t#e terms an( !on(itions
!ontaine( t#erein, to pay 100M o" t#e marketin- !osts in 1993, 80M in 1994, H0M in 199B, 4BM in 199H
an( 30M in 1997 6it# t#e ba&an!e pai( by t#e %ompany0 <#erea"ter, t#e 30M !ontinues to be pai( by
;epsi%o0
@n &ine 6it# po&i!y, ;epsi%o, @n! appoints a %ountry Mana-er in .ri /anka 6#o is responsib&e "or t#e
marketin- o" t#e ;epsi%o, @n!0 bran(s0 7((itiona&&y, #e is in !#ar-e o" (e,e&opin- an( maintainin- a&&
operatin- pro!e(ures to ensure t#at t#e %ompany meets ;epsi%o, @n!0*s stan(ar(s

)+hi6it %: ;epsi Ie-/aun!# .upportin- 7(,ertisin-
$(
%&&'$(( The Maharaja Dilemma
)+hi6it &: O&: %apita& .tru!ture
$$
80%
20%
65%
35%
$55%
$552
%&&'$(( The Maharaja Dilemma
)+hi6it 0: /J*s ;roposa&
/J*s proposa& 6as to in,est D. J3 mi&&ion in e'!#an-e "or 17,4H0,000 !on,ertib&e pre"eren!e
s#ares o" O&e .prin- Eott&ers at par ,a&ue o" ./ Iupees 10 ea!#0 @n a((ition to t#e s#ares, /J
6ou&( a&so re!ei,e a ;ut Option t#at 6as -uarantee( "or e'e!ution by bot# t#e Ma#ara$a Group
an( ;epsi0 <#e ;ut Option 6#en e'er!ise( a&&o6e( "or a 10M annua&&y !ompoun(e( D. o&&ar
return on /J*s initia& in,estment an( #a( t6o e'er!ise perio(s L t#e "irst at t#e en( o" t#ree
years an( se!on( at t#e en( o" "our years "rom t#e s#are pur!#ase a-reement0 /J purpose o"
in,estin- in O&e 6as to "inan!e it intermittent&y be"ore its stake !ou&( be &i?ui(ate( eit#er
t#rou-# anot#er pri,ate p&a!ement or sa&e a"ter an @;O0 7s an in,estment bank /J 6as 6e&&
!onne!te( to o""er its stake to ot#er in,estors in a pri,ate p&a!ement sa&e or #e&p take t#e O&e
pub&i! i" market !on(itions 6ere suitab&e0 1o6e,er in !ase O&e*s per"orman!e 6as be&o6
e'pe!tations (ue to any reason, /J #a( put into p&a!e a sa"ety net "or itse&" in t#e "orm o" t#e
put option a-reement0
)+hi6it 1: .ri /anka
$%
%&&'$(( The Maharaja Dilemma
)+hi6it 2: @mpa!t o" Ft#ni! %on"&i!t in Market ;er"orman!e
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
)+hi6it 3: Iupee F'!#an-e Iate
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
$&
%&&'$(( The Maharaja Dilemma
)+hi6it 4: .ri /anka*s @n"&ation Iate
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
$0
%&&'$(( The Maharaja Dilemma
)+hi6it 5: .ri /anka*s F!onomi! @n(i!ators
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
$1
%&&'$(( The Maharaja Dilemma
)+hi6it $(: <ourism
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
)+hi6it $$: Forei-n @n,estment
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
$2
%&&'$(( The Maharaja Dilemma
)+hi6it $%: @nterest Iates
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
$3
%&&'$(( The Maharaja Dilemma
)+hi6it $&: @mpa!t o" .trikes on ;ro(u!ti,ity
.our!eP .ri /anka .trate-yP Ear-ain Euy, .ri /anka Iesear!# e!ember 1997
)+hi6it $0: ;epsi%o @nternationa&
MOIG78 .<78/F9 F78 W@<<FI, 7u-ust 4, 1997, ;epsi%o 3;F;4P<#e Fa!e o" ;epsi%o @s %#an-in-
$4
%&&'$(( The Maharaja Dilemma
)+hi6it $1: ;er-%apita .o"t rink %onsumption
MOIG78 .<78/F9 F78 W@<<FI, 7u-ust 4, 1997, G&oba& .o"t rink Eott&in- Ie,ie6 an( Out&ookP
%onso&i(atin- t#e Way to a .tron-er Eott&in- 8et6ork
$5
%&&'$(( The Maharaja Dilemma
)+hi6it $2: ;epsi%o Market .#are 7(,anta-e
MOIG78 .<78/F9 F78 W@<<FI, 7u-ust 4, 1997, G&oba& .o"t rink Eott&in- Ie,ie6 an( Out&ookP
%onso&i(atin- t#e Way to a .tron-er Eott&in- 8et6ork
)+hi6it $3: O&:*s %ost Ereak(o6n
<#e ma$or in-re(ients use( in t#e pro(u!tion o" t#e %ompany*s 3O&:4 so"t (rink pro(u!ts in!&u(e
6ater 6#i!# !omes "rom t#e p&ant*s o6n 6e&&s= su-ar 6#i!# is supp&ie( "rom se,era& supp&iers in
.ri /anka= !on!entrates 6#i!# are supp&ie( by ;epsi%o, @n!0 un(er &i!ense an( Eus#, Eoake
7&&en= !arbon (io'i(e 6#i!# is supp&ie( "rom %ey&on O'y-en un(er !ontra!t in .ri /anka= bott&e
6as#in- an( 6ater treatment !#emi!a&s su!# as !austi! so(a, t#e ma$ority o" 6#i!# are sour!e(
6it#in .ri /anka "rom se,era& supp&iers= !ro6ns 6#i!# are supp&ie( "rom t6o supp&iers in .ri
/anka= -&ass bott&es 6#i!# are !urrent&y sour!e( "rom t#ree supp&iers in @n(ia0
%ost break(o6n per unit o" so"t (rinks is as "o&&o6sP
ire!t %ost 4909M
Manu"a!turin- %ost 209M
F'!ise uty 403M
.a&es 2 istribution 2000M
Genera& 2 7(ministration 20BM
7(ministration 2 Marketin- B09M
Operatin- Mar-in 1B04M
%(
%&&'$(( The Maharaja Dilemma
)+hi6it $4: Market .#ares by %ompetitor
%$
%&&'$(( The Maharaja Dilemma
)+hi6it $5: .#are %apita& .!#e(u&e
%%
%&&'$(( The Maharaja Dilemma
)+hi6it $5: O&e ;ro "orma @n!ome .tatement
%&
%&&'$(( The Maharaja Dilemma
)+hi6it %( cont7-: O&e ;ro "orma @n!ome .tatement
%0
%&&'$(( The Maharaja Dilemma
)+hi6it %$: O&e ;ro "orma Free %as# F&o6 ;ro$e!tions
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%&&'$(( The Maharaja Dilemma
Ie"eren!es
%on6ay, 7n(re6 J0, Massot, .y&,ain, .erra, /ore, ormer Jim, an( Mayo, .!ott, )G&oba& .o"t rink
Eott&in- Ie,ie6 an( Out&ookP %onso&i(atin- t#e Way to a stron-er Eott&in- 8et6ork,+ Mor-an
.tan&ey ean Witter, 7u-ust 4, 19980
%on6ay, 7n(re6 J0, );epsi%oP <#e Fa!e o" ;epsi%o is %#an-in-,+ Mor-an .tan&ey ean Witter, 7u-ust
7, 19970
G#ema6at, ;anka$ );epsiP <#e @n(ian %#a&&en-e,+ 1ar,ar( Eusiness .!#oo&, %ase Q 9-793-0H0, Mar!#
28, 199B0
);epsi%o,+ Ero6n Erot#ers 1arriman 2 %o0, May 22, 19970
);ri,ate @n,itation to .ubs!ribe "or 40,000,000 Or(inary 7 .#ares o" Is0 10000 ea!# at a pri!e o" Is0
10000 per s#are,+ O&: .prin-s Eott&ers /imite( ;ri,ate ;&a!ement0
);ut Option 7-reement,+ Ju&y 30, 19970
).#are 1o&(ers* 7-reement,+ Ju&y 30, 19970
).#are ;ur!#ase 7-reement,+ Ju&y 30, 19970
.o&omon, Jenni"er F0, );epsi%o R ;reparin- to Aisit Io-er*s 8ei-#bor#oo(,+ .a&omon Erot#ers, May
29, 19970
).ri /anka %ountry Ieport,+ F!onomi! @nte&&i-en!e Dnit, May 199H
).ri /anka %ountry Ieport,+ F!onomi! @nte&&i-en!e Dnit, O!tober 199H
).ri /anka Foo( 2 Ee,era-e .e!torP %ey&on %o&( .tores,+ @n(osue> W0@0 %arr .e!urities, February 11,
19980
).ri /anka .trate-y Ear-ain Euy,+ @n(osue> W0@0 %arr .e!urities, e!ember 19970
).ri /anka Week&y 8o0 21,+ @n(osue> W0@0 %arr .e!urities, May 19970
).ubsi(iary Guaranty,+ Ju&y 30, 19970
9uan, ;eter an( %rum, Geo"" );epsi%o %#an-!#un Joint AentureP %apita& F'pen(iture 7na&ysis,+ Ii!#ar(
@,ey .!#oo& o" Eusiness, %aseQ 90081H, January 19, 20010
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%&&'$(( The Maharaja Dilemma
Intervie8s:
10 .ri&a& 7#an-ama, Finan!e ire!tor, <#e Ma#ara$a %ompany
20 Mano Wikramanayake, Group ire!tor, <#e Ma#ara$a %orporation
30 8a(i$a <ambia#, Jo#n Kee&&s 1o&(in-s Group
40 /aksiri Wi!krama-e, Jo#n Kee&&s 1o&(in-s Group
%3