Coke in India

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Western soft drink companies have had a hard time being successful in India over the years. Coca-Cola actually withdrew from the country when the Indian country demanded the secret formula in order to continue operating within their borders. After re-introduction into the market, they have grown their market share with strategic alliances with pre-existing companies that were already doing well. Both Pepsi and Coke came (back) into the market with extreme restrictions, like being required to sell certain products and selling limits. Advertisement campaigns using local stars were successful in bringing more people to the product and embodying the lifestyle that Coke and Pepsi wanted to portray. It’s been a hard road, and unnecessary scandals formed surrounding the pesticide content in the soda. After the market started to stagnate, Coke took the step to start selling water, because it is a huge market in India. Just 3 years ago Coke turned a profit for the first time in a 20 year span. 1. The political environment in India has proven to be critical to company performance for both PepsiCo and Coca-Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry? If not, could developments in the political arena have been handled better by each company? India is an emerging economy, so gaining market share in that area was advantageous years ago. There is also not a lot of consumption of the product, so there was no saturation of the product already present. The fact that the government makes it so hard to do business in the country is a fact that businesses have to deal with when entering India. Many of the barriers and factors surrounding this market are known before the firm enters, but some things are unable to be predicted, like the fondness of new flavors or being reluctant to

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