PEPSI’S ENTRY INTO INDIA

Group members

Rahul Mehta 25
Jeeth Nambiar 29
Uttkarsha Kale 15
Rita Pawar 33
 1.1 Why Companies needs to be
Globalize?

 To Broaden the markets

 To seek raw materials
 To seek the technologies
 To seek the production efficiencies
 To avoid political hurdles
 To diversify
 1.2 Foreign Market Entrant Strategy

 Direct Export

 Joint Ventures

 Mergers

 Acquisitions

 Licensing
1.3 Hurdles faced by PepsiCo during
1980’s

 There should be no use of foreign brand name.

 Lack of liberalization

 100% FDI was not allowed

 Agricultural sector was the priority

 2.1 Strategy Adopted By Pepsi

 Creating Employments.
 More emphasis on Exports than imports to
improvise the balance of payment.
 Boosting the image of Indian products in
foreign market.
 Focusing on food and Agro-processing.
 Contd…

 Development of Areas it planned to operate in

 Directing major (75%) investment towards
agricultural sector
 Establishing Agricultural Research Centre.
 Development and Welfare of State.
 2.2 Reasons for Acceptance of
Proposal

 Yes, Most of the commitments were related with

Agro based therefore it is the biggest factor
responsible for acceptance of Pepsi.
 3.1 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
 Plastic Exports were 67%.
 Till 1997, the agro research centre was no
where.
 3.2 Allegations

 Failing to create jobs

 50% of employee working for Concentrate and
Bottling Business not for Food processing
Business.
 Pepsi with Futura Polymers Ltd. were reducing the
workforce and more machine oriented
 More lasting impression of “Pepsi” and “Lehar
Pepsi”.
 4.1 Contract Framing Initiative

 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
 4.2 Rationale for Contract
Forming

 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.
 Other rationale behind the contract farming was
to increase their own business rather than any
social welfare.
 Contd…

 Taken initiative for

 Chilly farming
 Groundnuts production over paddy production
 Rice production
 Fruits & Vegetable Farming

 Encouraging farmers to cultivate potato with low

sugar content for chips.