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Coke and Pepsi Learn to Compete in India By Diana Berger, Arthur Catlin, Ian Cavanaugh, Larry Cenotto, Dave Christiansen, and Matt Ross Background of Beverage Industry in India ? CocaCola’s past in India – Present from 1958 until 1977 ? Industry Shakeup in 1988 ? State of the Industry in 1993 – 45% of market consisted of small manufacturers – $ million market share ? Low Demand for Carbonated Drinks – Average of 3 servings a year/person in 1989 – Average of 1404 servings a year/person in . in 2023 Political Environment in India Political Environment in India ? Key Issues – India seen as unfriendly to foreign investors for many years – The “Principle of Indigenous Availability” ? Policy banning imports being sold in India – The Liberalization of India’s Government in 1991 ? “New Industrial Policy” ? Trade rules regulations simplified ? Foreign investment increased – Pepsi enters in 1986 – CocaCola follows in 1993 Political Environment in India ? Indian Laws – Unlawful to market under their Western name in India ? Pepsi became “Lehar Pepsi” ? CocaCola merged with Parle and became “CocaCola India” – Different Laws for Pepsi and Coke ? CocaCola agreed to sell off 49% of its stock as a condition of entering and buying out an Indian pany ? Pepsi entered earlier, and was not subject to this Political Environment in India ? Problems – India forced Coke to sell 49% of its equity to Indian investors in 2023 – Coke asked for a second extension that would delay it until 2023 ? India denied this – P