pepsi killing softly

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how pepsi entered indian market and problem itfaced by

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pepsi killing softly

  1. 1. Faculty : Dr. Archi Mathur<br />Killing Softly<br />Group Members :<br />Harish Choudhary <br /> Preeti Nayak<br />Priyanka Agnani<br />Neeraj Paliwal<br />Roll No-244,246,247,252 <br />CASE STUDY<br />
  2. 2. Facts of the case<br />Facts of case<br />
  3. 3. THE INTERNATIONAL SCENARIO:<br /><ul><li>Rivalry between Coke and Pepsi and each trying to beat the other.
  4. 4. Coke outsells Pepsi.
  5. 5. In 1987 Coke & Pepsi have 40.3% & 30.2 % of the U.S market respectively. </li></li></ul><li><ul><li>Apart from Pepsi cola co. and Pepsi cola International, it had six other divisions.</li></ul>Pepsi was merged with Frito-Lay to constitute Pepsi co. International in 1965.<br /> Pepsi became the owner of the world’s largest restaurant chain which also includes Pizza hut and Tacco Bell with a total of nearly 16500 outlets in 1987.<br />Pepsi had so far made inroads in 151 countries – 150 before India.<br />
  6. 6. THE INDIAN SCENARIO:<br />Limca was the largest selling brand, cola was the largest selling flavor .<br /><ul><li>In 1977 a change in government at a centre led to the exit of the Coca cola.
  7. 7. The first national cola drink to pop up was Double Seven.
  8. 8. In 1980 another cola drink, Thumps Up was launched by Parle .
  9. 9. Thrill by Mc Dowell's in mid eighties and by the late eighties there was Double cola .
  10. 10. The Indian soft drink industry was estimated to be 900 crores.
  11. 11. An additional dimension to the Indian soft drinks was fruit drinks </li></li></ul><li>Pepsi in India<br /><ul><li>In 1985 a proposal with R.P. Goenka group was rejected by the then govt.
  12. 12. The proposal involved:
  13. 13. Export of fruit juice concentrates from Punjab in return for the import of cola concentrates.
  14. 14. The deal offered was 3:1 export import ratio.
  15. 15. Therefore second bid was widened to take in a food processing division.
  16. 16. Acceptance of the Pepsi Offer in India in 1990:
  17. 17. Export import ratio was finally fixed at 5:1
  18. 18. Cold drinks sale was fixed at 22.5% of total sales</li></li></ul><li>Issue 1 : What were the elements of Indian market environment that Pepsi co. had to tackle? Elements of Micro Environment<br />
  19. 19. COMPETITORS<br />
  20. 20. Collabration<br />
  21. 21. Suppliers<br />
  22. 22. Customer<br />
  23. 23. Macro environment<br /><ul><li>Political environment
  24. 24. Legal Environment
  25. 25. Economic Environment
  26. 26. Social Environment
  27. 27. Technological Environment</li></li></ul><li>1-Political Environment<br />
  28. 28. 2-Legal environment <br />Severe restrictions in equity .<br />To show the results without the soft drink component.<br />Closed economy <br />3-Economic environment<br />Cold drink industry was in nascent stage<br />Foreign Exchange problem.<br />Lack of adequate market for fruits cultivators<br />
  29. 29. 4-Technological environment<br />
  30. 30. 5-Social environment<br />
  31. 31. Issue-2-How were these elements managed ?<br />MICRO ENVIRONMENT.<br />Competitors <br />Partners / Collaborations <br />Suppliers <br />Customers <br />MACRO ENVIRONMENT.<br />Political <br />Legal<br />Economic <br />Technological <br />Social<br />
  32. 32. A-Competitors<br />
  33. 33. B-Partners /Collaboration<br />
  34. 34. C-Suppliers<br />
  35. 35. D-Customers<br />
  36. 36. Political<br /><ul><li>Food processing was included in second proposal
  37. 37. Assurance on meeting export regulations
  38. 38. Employment -500-direct and 30000-additional were assured
  39. 39. In the revised deal
  40. 40. Equity stakes were revised
  41. 41. PAIC 40% Voltas -24% ,Pepsi-35%
  42. 42. EXIM ratio fixed at 5%
  43. 43. Indulged in political lobbying
  44. 44. Ensured the active participation of Punjab government.</li></li></ul><li>Economic<br />
  45. 45. -Technological <br /><ul><li>Assured availability of high end technology
  46. 46. Established collaborations for development of agriculture
  47. 47. LEGAL
  48. 48. Social
  49. 49. Ensured Indianization through Indian version of Pepsi </li></ul>Compliance with legal requirements<br />Fighting out the cases inside as well as outside.<br />
  50. 50. Issue-3-what is your learning about “managing the environment”?<br />IDENTIFICATION<br />APPRAISAL<br />ANALYSIS<br />
  51. 51. Flexibility –in changing offers .<br />Operating on strength<br />Brand name <br />Soft drink.<br />Going beyond requirement making it look like an initiative.<br />
  52. 52. Issue-4-How do you see the emerging environment in the Indian soft drinks market ?<br />Production <br />Market<br />Competition <br />Promotion<br />
  53. 53. Production<br />Better & more efficient means of production<br />Introduction of variety of flavours<br />More choices available to the buyers in terms of prodcuts, brands & flovors<br />
  54. 54. Market<br />Growth in market size<br />Spread of market of Pepsi<br />Probable entry of Pepsi in fruit drinks<br />
  55. 55. Competition<br />Increase in the degree of competition<br />Probable exit of Pure Drinks<br />Consolidation of small players<br />Incoming of more foreign players especially Coke<br />
  56. 56. Promotion <br />Exposure to new forms of strategies & techniques <br />Increase in the budgetary allocation to advertisement & sales promotion<br />More aggressive form of promotion to be observed in the market<br />
  57. 57. THANK YOU<br />

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