PepsiCo struggled to enter the highly regulated Indian market in the late 1980s. It promised to invest in rural Punjab's agriculture and make other commitments to regulatory authorities. However, it was criticized for failing to honor these promises after operations began and markets liberalized. PepsiCo used strategies like alliances with local companies, promoting development, and contract farming to navigate the regulated economy and capture growth opportunities in India's large market with limited competition.

1. PEPSI CASE STUDY
GLOBAL BUSINESS
Dhruv Goel
Roll No: 175
M1 Section
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2. ABSTRACT
 The case discusses the strategies adopted by the soft drinks and snack foods major PepsiCo to
enter India in the late 1980s.
 To enter the highly regulated Indian economy, the company had to struggle hard to 'sell' itself to
the Indian government.
 PepsiCo promised to work towards uplifting the rural economy of the terrorism affected north
Indian state of Punjab by getting involved in agricultural activities.
 In addition, it made a host of other promises that made its proposal very attractive to the
regulatory authorities.
 The case also discusses the criticisms levelled against the company criticism of its failure to honour
many of its commitments after it started operations in the country and after the liberalization of
the Indian economy.
 Finally, the case takes a look at the contract farming initiatives undertaken by Pepsi since the
1990s and seeks to critically analyse the strategies used by the company to enter India
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3. POST AND PRE GLOBALISATION
CHANGES IN INDIAN MARKET
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4. STRATEGIES ADOPTED TO ENTER THE
HIGHLY REGULATED MARKET
 Alliance with rpg group
 Proposal to export juice concentrate from Punjab
 Promoting and developing the export of indian agro-based products
 Setting up fruit and vegetable processing plant in zathura village
 Alliance with local farmers for contract farming of tomatoes
 Restriction of 25% in overall investment for beverages
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5. Growth avenues observed
 Large market
 Limited competition
 Final stage in parent market(USA)
 Availability of large farms and effective irrigation
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6. Why company changes its strategies In
tune with changes in regulatory
environment of foreign country
 To expand business
 To explore newer markets
 To grab opportunities
 To be in good terms with the government
 To cut out competition
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7. How to enter regulated economy of any
country
 Form a strategic alliance with a local company
 Promote overall development of the country
 Forming alliance with the native government
 Promote access to foreign exchange
 Introduction of technology
 Better opportunities to work
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8. Do we have to wait for good
opportunities in business
 No
 we need to be in business to avail the good opportunities that passes by.
 Good opportunities means exponential growth for which business have to be
there first.
 Risk of letting go of the business to the competitor
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9. Are foreign players good for Indian
economy growth
 Yes and no.
 They contribute to the GDP by increasing foreign exchange.
 They help in creating new jobs.
 Access to latest technology
 Promotes political peace and treaties among nations
 Disastrous for local business which cannot compete due to economies of scale in
production
 Prevents development of local manufacturing and services.
 Exploitation of resources
 Devaluation of currency
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10. Are we capable to meet the
expectations of the foreign
players?
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