SlideShare una empresa de Scribd logo
1 de 41
Descargar para leer sin conexión
Faculty :
   Dr. Archi Mathur




   Group Members :
      Sunidhi Mehta
Jyotirman Choudhury
   Priyadarsh Charan
       Rakesh Sharma
Pepsico case study
THE INTERNATIONAL SCENARIO:


 Rivalry between Coke and Pepsi and each was out to beat the
 other.

 Coke outsells Pepsi.

 In 1987 Coke & Pepsi have 40.3% & 30.2 % of the U.S market
 respectively.
Had an image of soft drink manufacturer and marketer.

Apart from Pepsi cola co. and Pepsi cola International, it had six other
divisions which had given it a commanding presence in Food Business.

Soft drinks contributed 32 % & the restaurants 27 % to the total operating
profits in 1987 .

Pepsi was merged with Frito-Lay to constitute Pepsi co. International in 1965.

In 1987 Pepsi co. was ranked 29th in the Fortune 500 whereas Coca Cola was at
54th.

Today, Frito-Lay division markets over 100 varieties of Snack Food.

Pepsi Co. acquired Kentucky Fried Chicken chain in 1986, with this 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.

Pepsi had so far made inroads in 151 countries – 150 before India.
THE INDIAN SCENARIO:

 Limca was the largest selling brand, cola was the largest selling flavor
 accounting for 40 % of the market share Lemon drinks followed cola with 31 %
 and orange drinks had only 19 %.
 Lemon drinks were more popular in Metros.
 In 1977 a change at a centre led to the exit of the Coca cola.
 The first national cola drink to pop up was Double Seven.
 Pure drinks, Delhi switched over to Campa Cola after coke’s exit and by the end
 of seventies, it was only Campa cola in the Indian cola market.
 In 1980 another cola drink, Thumps Up was launched by Parle but was objected
 by Pure Drinks to its being called a cola drink.
 Thrill by Mc Dowell's in mid eighties and by the late eighties there was Double
 cola which entered the market with the USP of an American Cola.
 The Indian soft drinks industry was estimated to be worth Rs 900 crores.
 In 1978 Parle led the Indian soft drinks market, in 1983 its market share was 43
 percent, 44 percent in 1987 and in 1990 it reached to 70 percent whereas its
 chief rivals Pure drinks’ share had been declining in 1978 it was 28 percent , in
 1983, 22 percent and in 1987 it was 21 percent.
 An additional dimension to the Indian soft drinks was fruit drinks. In 1988 it
 was valued at Rs 40 crores and was growing at a rate of 20 percent which was
 faster then the growth of the aerated soft drinks.
ENTRY OF PEPSI IN INDIA –
PHASE I:
In 1985 a proposal with R.P. Goenka group was
rejected by the then govt.
The proposal involved:
   Export of fruit juice concentrates from Punjab in
   return for the import of cola concentrates.
   The deal offered was 3:1 export import ratio.
ENTRY OF PEPSI IN INDIA – PHASE II:
 Rs 22 crore Pepsi co project was the second bid.
 The second proposal encompassed the following activities:
     Agro Research centre (costing Rs 1.55 crores).
     A potato and grain based processing unit (costing Rs 8
     crores).
     A fruit and vegetable processing unit (costing Rs &.5 crores).
     Exports.
     The Pepsi co would have an equity holding of 39 percent,
     PAIC, 20 percent and Voltas , 24 percent. The balance was to
     be placed privately from loans.
     Imports would be 37 crores and exports a minimum of Rs 194
     crores over a 10 year period.
     Benefits and advantages of proposal includes better market
     for rice, wheat and fruits in Punjab
Acceptance of the Pepsi Offer in India in
1990:

  Offer was accepted after much negotiations
  Export import ratio was finally fixed at 5:1
  Cold drinks sale was fixed at 22.5% of total sales
  Lot of political lobbying was involved.
Issue 1 : What were the elements of
Indian market environment that Pepsi
co. had to tackle?
 Elements of Micro Environment
    Competitors
    Partners/ Collaborations
    Suppliers
    Customers
A) Competitors
1-Market Leader- Parle

 Direct—Limca ,Thums Up, Golds Spot-44% in 1988.
 Indirect– Fruit Juice, Frooti.

2- Challenger –
  Pure Drinks-Campa cola
Contd…
3- Followers –
  Mc Dowell’s Thrill
  Double Cola

Other Characteristics
 Medium Competition
 2% of Advertisement
 Inexperienced and Apprehensive of Fighting
 International Player .
 Low Installation Cost and Equipment Value Relatively
 Inferior
B-Partners/ Collaborations

 PAIC and Voltas were vocal in their support.

  Agriculture Oriented PAIC had know-how about
 farmers state of agriculture .

 Established Brand Name of Tata.
C-Suppliers
Mostly farmers with high expectation whose:

  Income from wheat was falling .

  Fruit Cultivation was increasing , but had a major problem
  to dispose them.
D-Customer
 Fresh Indian Market , who were new to the taste of
 Foreign Cola Brand
Macro environment
 Political environment

 Legal Environment

 Economic Environment

 Socio-Cultural Environment

 Technological Environment
1-Political Environment
 Development of Economy.
 Intent of Development of Local Players Only.
 Opposition to promotion of carbonated drinks.
 Fear of invasion of foreign brand.
 Opposition to reliance on foreign technology .
 Desire to get best deal out of foreign collaboration.
 Desire to increase exports .
 Desire to earn foreign exchange.
2-Legal environment
Severe restrictions in equity through FERA

Dispute in relation to ownership of Pepsi brand name.
3-Economic environment
 Closed economy

 Cold drink industry in nascent stage

 FOREX starved economy

 Lack of adequate market for fruits cultivators
4-Technological environment
 Inferior technology for production of soft drinks .

 Requirement of knowledge in agriculture industries .

 Requirement of technology for fruits processing .
5-Socio-cultural environment
 Fear of invasion of MNC culture

 Fear of impact on diet
Issue-2-How were these elements
managed ?
MICRO ENVIRONMENT.
 Competitors
 Partners / Collaborations
 Suppliers
 Customers
MACRO ENVIRONMENT.
 Political
 Legal
 Economic
 Technological
 Scio-cultural
A-Competitors
Tackled the market leader head on.
Protected the public image, by putting up precise answers to
questions :
  Director, Business Division .
  Careful instruction to its partners: PAIC and Voltas
 Emphasized on the point that in spite of being a
foreigners, will create more benefits than local player.
Did not harp on the foreign nature ; came up with the
Indianized version of the brand in form of Lehar Pepsi
Ensured that discrediting /disruption tactics, were properly
pinned against the perpetuators.
Ensured top of the line equipment and plants were installed
B-Partners /Collaboration
Made optimum use of its partners
  displacing opposition
  garnering support
Used PAIC for
   countering argument from competitors
   ensuring support from suppliers
Used Voltas, it being a company of Tatas
    to establish credibility
    to quell any criticisms
Both were used for swaying public opinion ,in their
favour.
Loyalty and interest ensured through equity stake PAIC-
40% , voltas-24%
C-Suppliers

Fueled their expectation by spreading awareness of benefits
through PAIC

Provided the alternative for sale of agro products

Provided an option for opening of bottleneck and marketing
of fruits.
D-Customers
 Promised a unique brand experience of foreign cola
 drink.
A-Political
Phase-I

 Offer made with R.P.Goenka in 1985
 He included 3:1 export import ratio only on fruit juice
 concentrate.
 It was rejected
Phase-II
 Offer made with PAIC and voltas
 Offer made in areas mentioned in the facts .
     Agro research centre
     Agro based food processing mostly
     Fruit based food processing
     Exports .
 Assured development of products others than cold drinks limiting it to
 25 % of sales .
 EXIM ratio highly in favor of India
 Repatriation only after adequate FOREX.
 Assurance on meeting export regulations
 Assured employment -500-direct and 30000-indirect
 Dilution of foreign brand to Lehar
Phase-III



To further emphasis the offer made in phase –II
  Equity stakes were revised
  PAIC 40% Voltas -24% ,Pepsi-35%
  EXIM ratio fixed at 5%
  Indulged in political lobbying
  Ensured the active participation of Punjab government.
B-Legal
 Compliance with legal requirements
 Fighting out the cases inside as well as outside.
C-Economic
Ensured penetration in economy through attractive
offer
  FOREX
  EXIM ratio
  Better deal than other countries.
Attacked the developing cold drinks industry
  Superior technology
  Better finance
In area of agriculture
  Providing a market for agro products
  Provision of better prospects for food products .
D-Technological
 Assured availability of high end technology
 Established collaborations for development of
 agriculture
E-Socio-Cultural
 Ensured Indianization through Indian version of Pepsi
Issue-3-what is your learning about
“managing the environment”?


              IDENTIFICATION
              APPRAISAL
              ANALYSIS
              REACTION
Flexibility –in changing offers .
Operating on strength
   Brand name
   Soft drink
Ensuring self benefit in benefit of others .
Going beyond requirement making it look
like an initiative.
Issue-4-How do you see the emerging
environment in the Indian soft drinks
market ?
 Production
 Market
 Competition
 Promotion
 Others
Production
 Better & more efficient means of production
 Introduction of variety of flavours
 More choices available to the buyers in terms of
 prodcuts, brands & flovors
Market
 Growth in market size
 Spread of market of Pepsi
 Probable entry of Pepsi in fruit drinks
Competition
 Increase in the degree of competition
 Probable exit of Pure Drinks
 Consolidation of small players
 Incoming of more foreign players especially Coke
Promotion
 Exposure to new forms of strategies & techniques
 Increase in the budgetary allocation to advertisement
 & sales promotion
 More aggressive form of promotion to be observed in
 the market
Others
 Less political hostility towards entering of foreign
 players
 Relaxation of legal requirements
 Better employment generation
THANK YOU

Más contenido relacionado

La actualidad más candente

Pepsi Management
Pepsi ManagementPepsi Management
Pepsi ManagementSai Sapnu
 
Marketing report on PEPSI
Marketing report on PEPSIMarketing report on PEPSI
Marketing report on PEPSIAsim Ahmed
 
Coca - Cola's Macro & Micro Environmental Factors
Coca - Cola's Macro & Micro Environmental FactorsCoca - Cola's Macro & Micro Environmental Factors
Coca - Cola's Macro & Micro Environmental FactorsRishabhKhanna30
 
Identify and-establish-brand-positioning-and-value-pepsi
Identify and-establish-brand-positioning-and-value-pepsiIdentify and-establish-brand-positioning-and-value-pepsi
Identify and-establish-brand-positioning-and-value-pepsiNCBA&E Multan Campus
 
Swot analysis pepsi
Swot analysis pepsiSwot analysis pepsi
Swot analysis pepsiAli
 
Introduction to Pepsi
Introduction to PepsiIntroduction to Pepsi
Introduction to PepsiFahad Ali
 
PepsiCo’s Diversification Strategy in 2014
PepsiCo’s Diversification Strategy in 2014PepsiCo’s Diversification Strategy in 2014
PepsiCo’s Diversification Strategy in 2014Tran Thang
 
Product Assortment- Case Study Pepsi
Product Assortment- Case Study PepsiProduct Assortment- Case Study Pepsi
Product Assortment- Case Study PepsiTathagata Mahajan
 
Distribution strategy of pepsico ppt
Distribution strategy of pepsico pptDistribution strategy of pepsico ppt
Distribution strategy of pepsico pptAkash Rana
 
Marketing strategy of pepsi assaignment
Marketing strategy of pepsi assaignmentMarketing strategy of pepsi assaignment
Marketing strategy of pepsi assaignmentFatema Tuz Zzohora
 
Pepsi case study
Pepsi case studyPepsi case study
Pepsi case studySali1110
 
Coca-Cola Distribution strategy
Coca-Cola Distribution strategyCoca-Cola Distribution strategy
Coca-Cola Distribution strategyKushagr Jain
 
Pepsi-Cola Competitive Analysis
Pepsi-Cola Competitive AnalysisPepsi-Cola Competitive Analysis
Pepsi-Cola Competitive Analysiscraigdixon
 

La actualidad más candente (20)

Pepsi Management
Pepsi ManagementPepsi Management
Pepsi Management
 
ppt on pepsico
ppt on pepsico ppt on pepsico
ppt on pepsico
 
Pepsi co
Pepsi coPepsi co
Pepsi co
 
PepsiCo
PepsiCoPepsiCo
PepsiCo
 
PepsiCo.
PepsiCo.PepsiCo.
PepsiCo.
 
Marketing report on PEPSI
Marketing report on PEPSIMarketing report on PEPSI
Marketing report on PEPSI
 
Coca - Cola's Macro & Micro Environmental Factors
Coca - Cola's Macro & Micro Environmental FactorsCoca - Cola's Macro & Micro Environmental Factors
Coca - Cola's Macro & Micro Environmental Factors
 
Identify and-establish-brand-positioning-and-value-pepsi
Identify and-establish-brand-positioning-and-value-pepsiIdentify and-establish-brand-positioning-and-value-pepsi
Identify and-establish-brand-positioning-and-value-pepsi
 
Pepsi V/S Coke
Pepsi V/S CokePepsi V/S Coke
Pepsi V/S Coke
 
Swot analysis pepsi
Swot analysis pepsiSwot analysis pepsi
Swot analysis pepsi
 
Pepsico
PepsicoPepsico
Pepsico
 
Introduction to Pepsi
Introduction to PepsiIntroduction to Pepsi
Introduction to Pepsi
 
PepsiCo’s Diversification Strategy in 2014
PepsiCo’s Diversification Strategy in 2014PepsiCo’s Diversification Strategy in 2014
PepsiCo’s Diversification Strategy in 2014
 
Product Assortment- Case Study Pepsi
Product Assortment- Case Study PepsiProduct Assortment- Case Study Pepsi
Product Assortment- Case Study Pepsi
 
Distribution strategy of pepsico ppt
Distribution strategy of pepsico pptDistribution strategy of pepsico ppt
Distribution strategy of pepsico ppt
 
Marketing strategy of pepsi assaignment
Marketing strategy of pepsi assaignmentMarketing strategy of pepsi assaignment
Marketing strategy of pepsi assaignment
 
Pepsi case study
Pepsi case studyPepsi case study
Pepsi case study
 
Coca-Cola in China
Coca-Cola in ChinaCoca-Cola in China
Coca-Cola in China
 
Coca-Cola Distribution strategy
Coca-Cola Distribution strategyCoca-Cola Distribution strategy
Coca-Cola Distribution strategy
 
Pepsi-Cola Competitive Analysis
Pepsi-Cola Competitive AnalysisPepsi-Cola Competitive Analysis
Pepsi-Cola Competitive Analysis
 

Destacado

MNCs in India & Nestle International marketing
MNCs in India & Nestle International marketingMNCs in India & Nestle International marketing
MNCs in India & Nestle International marketingsurabhi agarwal
 
Case study the globalization of ebay v 1.1
Case study the globalization of ebay v 1.1Case study the globalization of ebay v 1.1
Case study the globalization of ebay v 1.1yanhufei
 
TITAN WATCHES- A case study
TITAN WATCHES- A case studyTITAN WATCHES- A case study
TITAN WATCHES- A case studySamriti Gosain
 
Best Buy | Case Study
Best Buy | Case Study Best Buy | Case Study
Best Buy | Case Study Sarthak Anand
 
The Role of Multinational Corporations a Case Study- Nestle
The Role of Multinational Corporations a Case Study- NestleThe Role of Multinational Corporations a Case Study- Nestle
The Role of Multinational Corporations a Case Study- NestleNikita Jangid
 
A case study on Patanjali ayurved
A case study on Patanjali ayurvedA case study on Patanjali ayurved
A case study on Patanjali ayurvedmathewjoseph123
 
Tata Starbucks India
Tata Starbucks IndiaTata Starbucks India
Tata Starbucks Indiaarjunsingh023
 
Starbucks: Expanding Into India, Case Study
Starbucks: Expanding Into India, Case StudyStarbucks: Expanding Into India, Case Study
Starbucks: Expanding Into India, Case StudyBCronin2
 
Role of mnc’s in india
Role of mnc’s in indiaRole of mnc’s in india
Role of mnc’s in indiaRakesh Kumar
 
McDonalds in India- A case study
McDonalds in India- A case study McDonalds in India- A case study
McDonalds in India- A case study Asith Paul.K
 
Powerpoint Presentation on eBay.com
Powerpoint Presentation on eBay.comPowerpoint Presentation on eBay.com
Powerpoint Presentation on eBay.commyclass08
 
Ebay presentation
Ebay presentationEbay presentation
Ebay presentationJenna Trego
 
McDonald's presentation
McDonald's presentationMcDonald's presentation
McDonald's presentationJeff Olavarria
 

Destacado (20)

MNCs in India & Nestle International marketing
MNCs in India & Nestle International marketingMNCs in India & Nestle International marketing
MNCs in India & Nestle International marketing
 
Case study the globalization of ebay v 1.1
Case study the globalization of ebay v 1.1Case study the globalization of ebay v 1.1
Case study the globalization of ebay v 1.1
 
TITAN WATCHES- A case study
TITAN WATCHES- A case studyTITAN WATCHES- A case study
TITAN WATCHES- A case study
 
Best Buy | Case Study
Best Buy | Case Study Best Buy | Case Study
Best Buy | Case Study
 
Globalization of TATA Motors
Globalization of TATA MotorsGlobalization of TATA Motors
Globalization of TATA Motors
 
Infosys Going Global
Infosys Going GlobalInfosys Going Global
Infosys Going Global
 
The Role of Multinational Corporations a Case Study- Nestle
The Role of Multinational Corporations a Case Study- NestleThe Role of Multinational Corporations a Case Study- Nestle
The Role of Multinational Corporations a Case Study- Nestle
 
A case study on Patanjali ayurved
A case study on Patanjali ayurvedA case study on Patanjali ayurved
A case study on Patanjali ayurved
 
Tata Starbucks India
Tata Starbucks IndiaTata Starbucks India
Tata Starbucks India
 
Case Study on Nokia
Case Study on NokiaCase Study on Nokia
Case Study on Nokia
 
Starbucks: Expanding Into India, Case Study
Starbucks: Expanding Into India, Case StudyStarbucks: Expanding Into India, Case Study
Starbucks: Expanding Into India, Case Study
 
Lenovo case presentation
Lenovo case presentationLenovo case presentation
Lenovo case presentation
 
Impact of MNCs
Impact of MNCsImpact of MNCs
Impact of MNCs
 
Role of mnc’s in india
Role of mnc’s in indiaRole of mnc’s in india
Role of mnc’s in india
 
McDonalds in India- A case study
McDonalds in India- A case study McDonalds in India- A case study
McDonalds in India- A case study
 
Powerpoint Presentation on eBay.com
Powerpoint Presentation on eBay.comPowerpoint Presentation on eBay.com
Powerpoint Presentation on eBay.com
 
Lenovo
LenovoLenovo
Lenovo
 
Ebay presentation
Ebay presentationEbay presentation
Ebay presentation
 
ebay Case Study
ebay Case Studyebay Case Study
ebay Case Study
 
McDonald's presentation
McDonald's presentationMcDonald's presentation
McDonald's presentation
 

Similar a Pepsico case study

pepsi killing softly
pepsi killing softlypepsi killing softly
pepsi killing softly19851984
 
Coke and pepsi presentation,
Coke and pepsi  presentation,Coke and pepsi  presentation,
Coke and pepsi presentation,Parth Purohit
 
PEPSI's Entry into India_UAS,Bengaluru
PEPSI's Entry into India_UAS,BengaluruPEPSI's Entry into India_UAS,Bengaluru
PEPSI's Entry into India_UAS,BengaluruRashmi Ranjan Moharana
 
Coca Cola Company Essay
Coca Cola Company EssayCoca Cola Company Essay
Coca Cola Company EssayBrenda Torres
 
Coca cola and Pepsi co in India.docx
Coca cola and Pepsi co in India.docxCoca cola and Pepsi co in India.docx
Coca cola and Pepsi co in India.docxShoaibAmjad13
 
International Marketing Case Study
International Marketing Case StudyInternational Marketing Case Study
International Marketing Case StudyLawrence Cenotto
 
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...Hardik Shah
 
Pepsi entry into india
Pepsi entry into india Pepsi entry into india
Pepsi entry into india Jay Sanghrajka
 
Coca cola company
Coca cola companyCoca cola company
Coca cola companyAmy Wang
 
Business research project
Business research projectBusiness research project
Business research projectAditya Purohit
 
Inernatonal marketing
Inernatonal marketingInernatonal marketing
Inernatonal marketingMuskan Pahwa
 
Pepsi co insight india
Pepsi co insight indiaPepsi co insight india
Pepsi co insight indiaAditya Jaitly
 
Assignment details pepsi co and coke american beverage giants
Assignment details pepsi co and coke american beverage giants Assignment details pepsi co and coke american beverage giants
Assignment details pepsi co and coke american beverage giants sodhi3
 
10-Step Plan of Pepsi Cola Philippines
10-Step Plan of Pepsi Cola Philippines10-Step Plan of Pepsi Cola Philippines
10-Step Plan of Pepsi Cola PhilippinesMark Anthony
 

Similar a Pepsico case study (20)

pepsi killing softly
pepsi killing softlypepsi killing softly
pepsi killing softly
 
Coke and pepsi presentation,
Coke and pepsi  presentation,Coke and pepsi  presentation,
Coke and pepsi presentation,
 
PEPSI's Entry into India_UAS,Bengaluru
PEPSI's Entry into India_UAS,BengaluruPEPSI's Entry into India_UAS,Bengaluru
PEPSI's Entry into India_UAS,Bengaluru
 
Coca Cola Company Essay
Coca Cola Company EssayCoca Cola Company Essay
Coca Cola Company Essay
 
Coca cola and Pepsi co in India.docx
Coca cola and Pepsi co in India.docxCoca cola and Pepsi co in India.docx
Coca cola and Pepsi co in India.docx
 
International Marketing Case Study
International Marketing Case StudyInternational Marketing Case Study
International Marketing Case Study
 
Pepsico
PepsicoPepsico
Pepsico
 
Beverage industry
Beverage industryBeverage industry
Beverage industry
 
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...
Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continue...
 
Pepsi entry into india
Pepsi entry into india Pepsi entry into india
Pepsi entry into india
 
Case Analysis Of Pepsi
Case Analysis Of PepsiCase Analysis Of Pepsi
Case Analysis Of Pepsi
 
Coca cola company
Coca cola companyCoca cola company
Coca cola company
 
Beverage industry
Beverage industryBeverage industry
Beverage industry
 
Business research project
Business research projectBusiness research project
Business research project
 
Inernatonal marketing
Inernatonal marketingInernatonal marketing
Inernatonal marketing
 
coca cola
coca colacoca cola
coca cola
 
Pepsi co insight india
Pepsi co insight indiaPepsi co insight india
Pepsi co insight india
 
Pepsi's entry into India
Pepsi's entry into IndiaPepsi's entry into India
Pepsi's entry into India
 
Assignment details pepsi co and coke american beverage giants
Assignment details pepsi co and coke american beverage giants Assignment details pepsi co and coke american beverage giants
Assignment details pepsi co and coke american beverage giants
 
10-Step Plan of Pepsi Cola Philippines
10-Step Plan of Pepsi Cola Philippines10-Step Plan of Pepsi Cola Philippines
10-Step Plan of Pepsi Cola Philippines
 

Más de Darshit narechania (16)

Bisleri
BisleriBisleri
Bisleri
 
Mc donalds
Mc donaldsMc donalds
Mc donalds
 
Money gkk
Money  gkkMoney  gkk
Money gkk
 
Money & banking
Money & bankingMoney & banking
Money & banking
 
Macroeconomics
MacroeconomicsMacroeconomics
Macroeconomics
 
Inflation
InflationInflation
Inflation
 
Gkk.banking monetary policy
Gkk.banking monetary policyGkk.banking monetary policy
Gkk.banking monetary policy
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
 
Bop
BopBop
Bop
 
Mutual fund main
Mutual fund mainMutual fund main
Mutual fund main
 
Final mutual fund
Final mutual fundFinal mutual fund
Final mutual fund
 
Tata's ratan (jewel)_-_final
Tata's ratan (jewel)_-_finalTata's ratan (jewel)_-_final
Tata's ratan (jewel)_-_final
 
Pepsi
PepsiPepsi
Pepsi
 
Big bazzar ppt
Big bazzar pptBig bazzar ppt
Big bazzar ppt
 
Amul ppt
Amul pptAmul ppt
Amul ppt
 
Ppt of types of-network
Ppt of types of-network Ppt of types of-network
Ppt of types of-network
 

Pepsico case study

  • 1. Faculty : Dr. Archi Mathur Group Members : Sunidhi Mehta Jyotirman Choudhury Priyadarsh Charan Rakesh Sharma
  • 3. THE INTERNATIONAL SCENARIO: Rivalry between Coke and Pepsi and each was out to beat the other. Coke outsells Pepsi. In 1987 Coke & Pepsi have 40.3% & 30.2 % of the U.S market respectively.
  • 4. Had an image of soft drink manufacturer and marketer. Apart from Pepsi cola co. and Pepsi cola International, it had six other divisions which had given it a commanding presence in Food Business. Soft drinks contributed 32 % & the restaurants 27 % to the total operating profits in 1987 . Pepsi was merged with Frito-Lay to constitute Pepsi co. International in 1965. In 1987 Pepsi co. was ranked 29th in the Fortune 500 whereas Coca Cola was at 54th. Today, Frito-Lay division markets over 100 varieties of Snack Food. Pepsi Co. acquired Kentucky Fried Chicken chain in 1986, with this 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. Pepsi had so far made inroads in 151 countries – 150 before India.
  • 5. THE INDIAN SCENARIO: Limca was the largest selling brand, cola was the largest selling flavor accounting for 40 % of the market share Lemon drinks followed cola with 31 % and orange drinks had only 19 %. Lemon drinks were more popular in Metros. In 1977 a change at a centre led to the exit of the Coca cola. The first national cola drink to pop up was Double Seven. Pure drinks, Delhi switched over to Campa Cola after coke’s exit and by the end of seventies, it was only Campa cola in the Indian cola market. In 1980 another cola drink, Thumps Up was launched by Parle but was objected by Pure Drinks to its being called a cola drink. Thrill by Mc Dowell's in mid eighties and by the late eighties there was Double cola which entered the market with the USP of an American Cola. The Indian soft drinks industry was estimated to be worth Rs 900 crores. In 1978 Parle led the Indian soft drinks market, in 1983 its market share was 43 percent, 44 percent in 1987 and in 1990 it reached to 70 percent whereas its chief rivals Pure drinks’ share had been declining in 1978 it was 28 percent , in 1983, 22 percent and in 1987 it was 21 percent. An additional dimension to the Indian soft drinks was fruit drinks. In 1988 it was valued at Rs 40 crores and was growing at a rate of 20 percent which was faster then the growth of the aerated soft drinks.
  • 6. ENTRY OF PEPSI IN INDIA – PHASE I: In 1985 a proposal with R.P. Goenka group was rejected by the then govt. The proposal involved: Export of fruit juice concentrates from Punjab in return for the import of cola concentrates. The deal offered was 3:1 export import ratio.
  • 7. ENTRY OF PEPSI IN INDIA – PHASE II: Rs 22 crore Pepsi co project was the second bid. The second proposal encompassed the following activities: Agro Research centre (costing Rs 1.55 crores). A potato and grain based processing unit (costing Rs 8 crores). A fruit and vegetable processing unit (costing Rs &.5 crores). Exports. The Pepsi co would have an equity holding of 39 percent, PAIC, 20 percent and Voltas , 24 percent. The balance was to be placed privately from loans. Imports would be 37 crores and exports a minimum of Rs 194 crores over a 10 year period. Benefits and advantages of proposal includes better market for rice, wheat and fruits in Punjab
  • 8. Acceptance of the Pepsi Offer in India in 1990: Offer was accepted after much negotiations Export import ratio was finally fixed at 5:1 Cold drinks sale was fixed at 22.5% of total sales Lot of political lobbying was involved.
  • 9. Issue 1 : What were the elements of Indian market environment that Pepsi co. had to tackle? Elements of Micro Environment Competitors Partners/ Collaborations Suppliers Customers
  • 10. A) Competitors 1-Market Leader- Parle Direct—Limca ,Thums Up, Golds Spot-44% in 1988. Indirect– Fruit Juice, Frooti. 2- Challenger – Pure Drinks-Campa cola
  • 11. Contd… 3- Followers – Mc Dowell’s Thrill Double Cola Other Characteristics Medium Competition 2% of Advertisement Inexperienced and Apprehensive of Fighting International Player . Low Installation Cost and Equipment Value Relatively Inferior
  • 12. B-Partners/ Collaborations PAIC and Voltas were vocal in their support. Agriculture Oriented PAIC had know-how about farmers state of agriculture . Established Brand Name of Tata.
  • 13. C-Suppliers Mostly farmers with high expectation whose: Income from wheat was falling . Fruit Cultivation was increasing , but had a major problem to dispose them.
  • 14. D-Customer Fresh Indian Market , who were new to the taste of Foreign Cola Brand
  • 15. Macro environment Political environment Legal Environment Economic Environment Socio-Cultural Environment Technological Environment
  • 16. 1-Political Environment Development of Economy. Intent of Development of Local Players Only. Opposition to promotion of carbonated drinks. Fear of invasion of foreign brand. Opposition to reliance on foreign technology . Desire to get best deal out of foreign collaboration. Desire to increase exports . Desire to earn foreign exchange.
  • 17. 2-Legal environment Severe restrictions in equity through FERA Dispute in relation to ownership of Pepsi brand name.
  • 18. 3-Economic environment Closed economy Cold drink industry in nascent stage FOREX starved economy Lack of adequate market for fruits cultivators
  • 19. 4-Technological environment Inferior technology for production of soft drinks . Requirement of knowledge in agriculture industries . Requirement of technology for fruits processing .
  • 20. 5-Socio-cultural environment Fear of invasion of MNC culture Fear of impact on diet
  • 21. Issue-2-How were these elements managed ? MICRO ENVIRONMENT. Competitors Partners / Collaborations Suppliers Customers MACRO ENVIRONMENT. Political Legal Economic Technological Scio-cultural
  • 22. A-Competitors Tackled the market leader head on. Protected the public image, by putting up precise answers to questions : Director, Business Division . Careful instruction to its partners: PAIC and Voltas Emphasized on the point that in spite of being a foreigners, will create more benefits than local player. Did not harp on the foreign nature ; came up with the Indianized version of the brand in form of Lehar Pepsi Ensured that discrediting /disruption tactics, were properly pinned against the perpetuators. Ensured top of the line equipment and plants were installed
  • 23. B-Partners /Collaboration Made optimum use of its partners displacing opposition garnering support Used PAIC for countering argument from competitors ensuring support from suppliers Used Voltas, it being a company of Tatas to establish credibility to quell any criticisms Both were used for swaying public opinion ,in their favour. Loyalty and interest ensured through equity stake PAIC- 40% , voltas-24%
  • 24. C-Suppliers Fueled their expectation by spreading awareness of benefits through PAIC Provided the alternative for sale of agro products Provided an option for opening of bottleneck and marketing of fruits.
  • 25. D-Customers Promised a unique brand experience of foreign cola drink.
  • 26. A-Political Phase-I Offer made with R.P.Goenka in 1985 He included 3:1 export import ratio only on fruit juice concentrate. It was rejected
  • 27. Phase-II Offer made with PAIC and voltas Offer made in areas mentioned in the facts . Agro research centre Agro based food processing mostly Fruit based food processing Exports . Assured development of products others than cold drinks limiting it to 25 % of sales . EXIM ratio highly in favor of India Repatriation only after adequate FOREX. Assurance on meeting export regulations Assured employment -500-direct and 30000-indirect Dilution of foreign brand to Lehar
  • 28. Phase-III To further emphasis the offer made in phase –II Equity stakes were revised PAIC 40% Voltas -24% ,Pepsi-35% EXIM ratio fixed at 5% Indulged in political lobbying Ensured the active participation of Punjab government.
  • 29. B-Legal Compliance with legal requirements Fighting out the cases inside as well as outside.
  • 30. C-Economic Ensured penetration in economy through attractive offer FOREX EXIM ratio Better deal than other countries. Attacked the developing cold drinks industry Superior technology Better finance In area of agriculture Providing a market for agro products Provision of better prospects for food products .
  • 31. D-Technological Assured availability of high end technology Established collaborations for development of agriculture
  • 32. E-Socio-Cultural Ensured Indianization through Indian version of Pepsi
  • 33. Issue-3-what is your learning about “managing the environment”? IDENTIFICATION APPRAISAL ANALYSIS REACTION
  • 34. Flexibility –in changing offers . Operating on strength Brand name Soft drink Ensuring self benefit in benefit of others . Going beyond requirement making it look like an initiative.
  • 35. Issue-4-How do you see the emerging environment in the Indian soft drinks market ? Production Market Competition Promotion Others
  • 36. Production Better & more efficient means of production Introduction of variety of flavours More choices available to the buyers in terms of prodcuts, brands & flovors
  • 37. Market Growth in market size Spread of market of Pepsi Probable entry of Pepsi in fruit drinks
  • 38. Competition Increase in the degree of competition Probable exit of Pure Drinks Consolidation of small players Incoming of more foreign players especially Coke
  • 39. Promotion Exposure to new forms of strategies & techniques Increase in the budgetary allocation to advertisement & sales promotion More aggressive form of promotion to be observed in the market
  • 40. Others Less political hostility towards entering of foreign players Relaxation of legal requirements Better employment generation