PEPSI’S ENTRY STRATEGY

IN INDIA


 Submitted by:
 Shashank Chauhan
 A letter to Pepsi
 History about a PEPSI.
 1988 a letter received New York office by
India.
 India is a lucrative destination for PEPSI.
 Consumption of PEPSI per capita is very
low as compared to Thailand and Egypt.


 The promises that helped
Pepsi enter
 In May 1985 joint venture with R P Goenka
(RPG) group.
 Pepsi agreed to export juice from north
Indian state Punjab.
 Government rejected a proposal on two
basis
 Cause regarding a import of cola
concentrate
 Use of forgian brand name Pepsi.
 Promises of a Pepsi

 Company create a jobs of 50,000 over

nation and 25,000 in Punjab.
 Foreign brand name would not be used.
 agricultural research centre would be
established.
 Company focus 75% on agro processing
and 25% on investment.
 Company will bring advanced food
processing technology in India and also
boost Indian products in international
market.
 Pepsi promises keep some
break some
 Pepsi claimed it provided 26000
employment where it counted indirect
employment actually it was only 2400.
 50% of employers are working on
concentrate and bottling business and
not on food processing business.
 Future polymer limited replaced many
workers by machinery.
 Pepsi export glass products, leather
product instead of fruits and vegetables.
 As a name Lehar Pepsi, Pepsi was given
prominent position while Lehar had given
 Problems faced by Pepsi to
fulfill its commitment
 Local tomatoes were of very low quality.
 Pepsi took long time to convince farmers
to work with company as a contract
farming.
 For payment, 80% of farmer did not have
their bank account.
 In 1990, crops was harvested but Zahura
plant is not ready to start a production.
 Pepsi failed to export 50% of its
production.
 Pepsi paid farmers par kg less than a
 A boon for Pepsi
 In 1991 liberalizations economy policies
were introduced.
 1)The removal of numerous restrictions
on foreign trade.
 2) Increase role of private equity in Indian
markets.

 Major advantages of
liberalisation for Pepsi
 Removed investment in Soft Drinks
business 25% of the overall investment
and required it to export 50% of its
production.
 1994 Pepsi bought of its partner in the
venture, while Voltas sold off its stake
completely.
 Company established a wholly owned
subsidiary, PepsiCo. Holding India
Pvt.Ltd.(PHI)
 Major profit
 In 1995 beverage business grew by as
much as 50%.
 In 1996 PHI’s turnover surpassed Pepsi’s
turnover by Rs. 1.25 billion.
 In 1996 plastic export hiked 67%
 In 1997 agro-research center promised by
the company was nowhere in sight.
 Contract firming for Pepsi
 Introduced contract firming in
 Tomato(1991)
 Chili(1997)
 Basmati rice(Oct-1999)
 Ground nut(2000)



 Major failures and
investment
 Pepsi failed in chili contract firming
(cultivation land reduced 1750 acres in
1997 to 300 acres by 2000)
 In June 2000,Pepsi prevailed plan to invest
Rs.1.25 billion every year in Karnataka.
 Since Pepsi's entry in India it invested 18
billion by 2000 (1.5 billion was invested
in Punjab, Where around 8,000 people
were working for the company.
Major export for Pepsi for dong
business in India
 Major export items(Processed foods,
Basmati rice, guar gum, soft drink
concentrate
 In 2000 potato requirement was 25,000
tonnes per annum but Pepsi could fulfill
only 3,000 tonnes.
 In August 2002, Pepsi joined hands with
Punjab state government for export of
process citrus fruits.
 Conclusion

Pepsi could achieved whatever they wanted

which cola could not do so and Pepsi could

established by 2003 firmly in India it

informed us
That Pepsi came with strong strategy to

catch up the Indian market and use Indian

cheap labour and resourses for increase
their overall revenue and profit