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ADDITIONAL Responses for International Management and Leadership

 

You are given 2 example student responses to the topic below. Each student response is to have an independent response; DO NOT COMBINE THE RESPONSES OR COMMENT ON ONE STUDENT RESPONSE IN ANOTHER STUDENT RESPONSE. Read the topic the students responses are based on. Reply to each individual student per the directions that follow the topic.

Pepsi Co and Coke American beverage giants, must adhere to the U.S Foreign Corruption Act wherever their businesses may take them. Both companies expanded their U.S businesses to India with differing initial results. Coke came home (initially) and Pepsi Co prospered.

Students were asked to research and explain the socio-cultural barriers faced by Pepsi Co and Coke American beverage giants.

The response you are to give to each of the 2 students will include a minimum of three paragraphs that cover the following:

·          What in your view were the reasons the student gave which negatively impacted Coke and positively touched Pepsi Co?

·          Choose a third international company in a different country and discuss as a comparative to the student’s work on socio-cultural barriers faced by Pepsi Co and Coke American beverage giants.

·          Do you feel that cultural training is an essential pre-requisite for expatriates in any host country?

·          Why/Why not?

Remember to use APA referencing and citations in the body of your posting.

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STUDENT RESPONSE 1

Pepsi Co and Coke American beverage giants, must adhere to the U.S Foreign Corruption Act wherever their businesses may take them. Both companies expanded their U.S businesses to India with differing initial results. Coke came home (initially) and Pepsi Co prospered.

 

Do your research and explain the socio-cultural barriers faced by these two companies?

 

Pepsi Co entered the Indian market in the 1989, years after Coca-cola was unsuccessful.  A rule in the 1980s allowed multinationals to use only hybrid brand names for their products in India. It began with a fizzy national debate over a small bottle of sweetened water, followed by a legendary cola war with rival Coca-Cola, and PepsiCo’s eventual transformation into India’s largest food and beverage company. Pepsi Co India’s first CEO, Ramesh Vangal, spotted the chance to make PepsiCo’s entry more palatable through food processing. He cultivated support in Punjab, a state desperately wooing food processing industry after Operation Bluestar – the Golden Temple violence in 1984. The plan worked. PepsiCo, in a tie-up with state-owned Punjab Agro Industries Corporation and Voltas, applied on June 6, 1986, to set up a snack food plant a fruit and vegetable unit that would initially process tomatoes and a soft drinks concentrate plant. Pepsi Co started rolling out its colas in June 1990. Iit sold over 20 million cases a year. In 1991, India faced a balance of payments crisis and went in for economic restructuring, as suggested by the International Monetary Fund. Multinationals were suddenly welcome, and Coca-Cola arrived in 1993 without the welter of restrictions imposed on PepsiCo. Chauhan, who realised his time was up, sold his brands, and a 70 per cent share of the market, to Coca-Cola.

 

What in your view were the reasons which negatively impacted Coke and positively touched Pepsi Co? 

In order for a company to be successful when expanding into a new international market, it is important to gain a clear understanding of the culture and economy. Coca-Cola failed the first time they attempted to enter the Indian market due to lack of research of the market and country they were entering into. Pepsi Co took the time to assess the situation in India and created an approach that would appeal to the culture. 

 

References

 

·          Das Gupta.S (2014). How India Became Pepsi’s Right Choice.  Business Standard . Retrieved from http://www.business-standard.com/article/companies/how-india-became-pepsi-s-right-choice-114032701308_1.html

 

STUDENT REPONSE 2 

Information on the Coca- Cola Company in India Since the re-entrance of the Coca-Cola in India they have invested around $2 Billion in U.S. Funds since 2011. They are planning to invest even more in 2020 in the amount of $5 Billion in U.S. funds. India employs around 25,000 people. The company is striving to make sure that the environment is safe and complete and that the opportunities are abundant for the India people and all across the world. The Coco- Cola beverage company is a better product for economic growth (Brunel Business School, 2012). The world is changing and so is Coca-Cola and the company in India must continue to grow and look forward for what’s to come. When a business moves to a foreign country they need to be aware of responsibility to that nation’s culture. One of the biggest issues faced by multinational businesses is learning how to market the products and treat customers (Hofstede, 2001). Coca-Cola is being challenged for its abuse of water resource. India has over 90%of the soft drinks markets in India in the Coca- Cola and Pepsi Companies. Coca- Cola had the issue of pesticides being in bottled water and soft drinks, which was treated by the NGO and CSE. 

 

Here are some of Coca-Cola’s SWOT 

Coca- Cola (Strengths) 

·          Global brand recognition 

·          Good marketing knowledge 

·          Efficient management system 

·          Technological advancement 

·          Bottling system 

 

 

Coca- Cola (Weakness) 

·          Uncertain about prevention 

·          Lack of marketing expertise in the Indian conditions 

·          Lack of knowledge in the Indian culture world 

 

Coca- Cola (Opportunities) 

·          Growing India Market 

·          Good brand name 

·          International trade barriers has been limited 

·          Large Market 

 

Coca-Cola (Threats) 

·          Price Conflict 

·          Cultural behavior 

·          Health Awareness 

·          Difference in Management Design 

·          Avoiding Foreign products in Indian 

 

 

References: 

https:www.coca-colaindia.com/ourcompany/company_history.html 

 

Brunel Business School (2012). Cultural Effect towards Brand Extension as a Global Marketing Strategy (1124460). Brunel University West London. 

  

Hofstede, G; (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks, CA: Sage. 

 

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