可口可乐与百事可乐在印度的商业竞争课件

CokeandPepsiLearntoCompeteinIndiaByDianaBerger,ArthurCatlin,IanCavanaugh,LarryCenotto,DaveChristiansen,andMattRossCokeandPepsiLearntoCompet1BackgroundofBeverageIndustryinIndiaCoca-Cola’spastinIndiaPresentfrom1958until1977IndustryShakeupin1988StateoftheIndustryin199345%ofmarketconsistedofsmallmanufacturers$3.2millionmarketshareLowDemandforCarbonatedDrinksAverageof3servingsayear/personin1989Averageof1404servingsayear/personinU.S.in2003BackgroundofBeverageIndustr2PoliticalEnvironmentinIndiaPoliticalEnvironmentinIndia3PoliticalEnvironmentinIndiaKeyIssuesIndiaseenasunfriendlytoforeigninvestorsformanyyearsThe“PrincipleofIndigenousAvailability”PolicybanningimportsbeingsoldinIndiaTheLiberalizationofIndia’sGovernmentin1991“NewIndustrialPolicy”Traderules®ulationssimplifiedForeigninvestmentincreasedPepsientersin1986Coca-Colafollowsin1993PoliticalEnvironmentinIndia4PoliticalEnvironmentinIndiaIndianLawsUnlawfultomarketundertheirWesternnameinIndiaPepsibecame“LeharPepsi”Coca-ColamergedwithParleandbecame“Coca-ColaIndia”DifferentLawsforPepsiandCokeCoca-Colaagreedtoselloff49%ofitsstockasaconditionofenteringandbuyingoutanIndiancompanyPepsienteredearlier,andwasnotsubjecttothisPoliticalEnvironmentinIndia5PoliticalEnvironmentinIndiaProblemsIndiaforcedCoketosell49%ofitsequitytoIndianinvestorsin2002Cokeaskedforasecondextensionthatwoulddelayituntil2007IndiadeniedthisPepsiwasheldtothissincetheyenteredIndiainadifferentyear.CokeaskedtheForeignInvestmentPromotionBoardtoblockthevotesoftheIndianshareholderswhowouldcontrol49%ofCokeChangeinoversightoftheFIPBPastlobbyingeffortsmadeuselessPoliticalEnvironmentinIndia6PoliticalEnvironmentinIndiaCouldtheseproblemshavebeenforecastedpriortomarketentry?ProbablynotInconsistent,andchanginggovernmentHowcouldthesedevelopmentsinthepoliticalarenahavebeenhandleddifferently?CokecouldofagreedtostartnewbottlingplantsinsteadofbuyingoutParle,andthuswouldn’tofhadtoagreetosell49%oftheirequityPoliticalEnvironmentinIndia7TimingofMarketEntryTimingofMarketEntry8TimingofMarketEntryPepsi(earlyentry-1986)Advantages

EnteredthemarketBeforeCoca-ColaandwasabletogainafootholdinthemarketwhileitwasstilldevelopingGained26%marketshareby1993DisadvantagesWereforcedtochangetheirnametoLeharPepsiGovt.limitedtheirsoftdrinksalestolessthan25%oftotalsalesStruggledtofightofflocalcompetitionTimingofMarketEntryPepsi(9TimingofMarketEntryCoca-Cola(lateentry-1993)AdvantagesWereabletobuy4bottlingplantsfromindustryleaderParleAlsoboughtParle’sleadingbrands:ThumsUp,Limca,Citra,GoldSpotandMazaaSetup2newventureswithParletobottleandmarketproductDisadvantagesDeniedentryuntil1993becausePepsiwasalreadythereHardertoestablishmarketsharewithPepsithereWerenotallowedtobuyback49%ofequityTimingofMarketEntryCoca-Col10ResponsestoIndia’sEnormityPepsiandCoca-ColarespondedinmanywaystotheenormityofIndiaintermsofitpopulationandgeographyResponsestoIndia’sEnormityP11ResponsestoIndia’sEnormityProductPoliciesCateringtoIndiantastesEnteringwithproductsclosetothosealreadyavailableinIndiasuchascolas,fruitdrinks,carbonatedwatersWaitingtointroduceAmericantypedrinksCoca-ColaintroducingSpriterecentlyIntroducingnewproductsBottledwaterResponsestoIndia’sEnormityP12ResponsestoIndia’sEnormityPromotionalActivitiesBothadvertiseandusepromotionalmaterialatNavrartriPepsigivesawaypremiumriceandcandywithPepsiCoca-Colaoffersfreepasses,CokegiveawaysaswellasvacationsUseofdifferentcampaignsfordifferentareasofIndia“IndiaA”campaignstrytoappealtoyoungurbanites“IndiaB”campaignstrytoappealtoruralareasResponsestoIndia’sEnormityP13ResponsestoIndia’sEnormityPricingPoliciesPepsistartedoutwithanaggressivepricingpolicytotrytogetimmediatemarketsharefromIndiancompetitorsCoca-Colacutitspricesby15-25%in2003AttempttoencourageconsumptiontotrytocompetewithPepsiandgainmarketshareResponsestoIndia’sEnormityP14ResponsestoIndia’sEnormityDistributionArrangementsProductionplantsandbottlingcentersplacedinlargecitiesallaroundIndiaMoreaddedasdemandgrewandasnewproductswereaddedResponsestoIndia’sEnormityD15CokeandPepsi’s“GlocalizationStrategies”Whatis“Glocalization”?Global+Localization=GlocalizationBytakingaproductglobal,afirmwillhavemoresuccessiftheyadaptitspecificallytothelocationandculturethattheyaretryingtomarketitin.BothcompanieshavesuccessfullyimplementedglocalizationCokeandPepsi’s“Glocalizatio16Pepsi’sGlocalizationPepsiformsjointventurewhenfirstenteringIndiawithtwolocalpartners,VoltasandPunjabAgro,forming“PepsiFoodsLtd”.In1990,PepsiFoodsLtd.changedthenameoftheirproductto“LeharPepsi”toconformwithforeigncollaborationrules.Inkeepingwithlocaltastes,PepsilauncheditsLehar7UPintheclearlemoncategory.Pepsi’sGlocalizationPepsifor17Pepsi’sGlocalizationAdvertisingisdoneduringtheculturalfestivalofNavrartri,atraditionalfestivalheldinthetownofGujaratwhichlastsforninedays.Pepsi’smosteffectiveglocalizationstrategyhasbeensponsoringworldfamousIndianathletes,suchascricketandsoccerplayers.Pepsi’sGlocalizationAdvertisi18Coca-Cola’sGlocalizationFirstjoinedforceswiththelocalsnackfoodproducerBritanniaIndustriesIndiaLheearly90’s.FormedajointventurewiththemarketleaderParlein1993ForthefestivalofNavrartri,Coca-Colaissuedfreepassestothecelebrationineachofits“ThumsUp”bottlesAlsoranspecialpromotionswherepeoplecouldwinfreevacationstoGoa,aresortstateinwesternIndiaCoca-Cola’sGlocalizationFirst19Coca-Cola’sGlocalizationCoca-Colaalsohiredseveralfamous“Bollywood”actorstoendorsetheirproducts.Whocouldforget…VivekOberoiAishwaryaRaiCoca-Cola’sGlocalizationCoca-20Coca-ColaIndia’sMistakesEntersMarketattheWrongTimeByenteringatthistime,Coca-ColaIndiaagreedtoabidebyalltheForeignInvestmentLawsofthatyear.Coca-ColaIndiatriestoexpandinvestmentGovernmentallowedacquisitiononlyifCoca-Colaagreedtosell49%ofequitywithin2yearsCoca-Colatriedtogetextensions…twiceIndiagrantedthefirstextension,deniedthesecondCoca-ColaIndiatriedtodenytheupcomingIndianshareholdersvotingrightsForeignInvestmentPromotionBoard(FIPB)DeniesThisCoca-ColaIndia’sMistakesEnte21Coca-ColaIndia’sMistakes1stMistakeCoca-Colashouldhavebeenmorecarefulofwhentheyenteredthemarketandwhattheywerepromisingwhentheyentered.2ndMistakeCoca-Colashouldnothavetriedtoweaseltheirwayoutofpromisesthattheymade.ThesemistakeshurtCoca-Cola’simageandreputationasanInternationalCompany“Whydoesn’tthismultinationalsetanexamplebyfulfillingitsowncommitments?”Coca-ColaIndia’sMistakes1st22CokeorPepsiintheLongRun?PepsiBettermarketingandadvertisingstrategiesMorewidelyacceptedMoremarketshareCokeGovernmentconflictsTrailingPepsiinmarketsharePepsiwillfarebetterinthelongrunCokeorPepsiintheLongRun?23Pepsi’sLessonsLearnedBeneficialtokeepwithlocaltastesBeneficialtopayattentiontomarkettrendsCelebrityappealmakesforexceptionaladvertisingItpaystokeepupwithemergingtrendsinthemarketPepsi’sLessonsLearnedBenefic24Coca-Cola’sLesson’sLearnedPayspecificattentiontodealsmadewiththegovernmentEstablishagoodbusinessrelationshipwiththegovernmentInvestmentinqualityproductsAdvertisingiscrucialCoca-Cola’sLesson’sLearnedPa25CokeandPepsiLearntoCompeteinIndiaByDianaBerger,ArthurCatlin,IanCavanaugh,LarryCenotto,DaveChristiansen,andMattRossCokeandPepsiLearntoCompet26BackgroundofBeverageIndustryinIndiaCoca-Cola’spastinIndiaPresentfrom1958until1977IndustryShakeupin1988StateoftheIndustryin199345%ofmarketconsistedofsmallmanufacturers$3.2millionmarketshareLowDemandforCarbonatedDrinksAverageof3servingsayear/personin1989Averageof1404servingsayear/personinU.S.in2003BackgroundofBeverageIndustr27PoliticalEnvironmentinIndiaPoliticalEnvironmentinIndia28PoliticalEnvironmentinIndiaKeyIssuesIndiaseenasunfriendlytoforeigninvestorsformanyyearsThe“PrincipleofIndigenousAvailability”PolicybanningimportsbeingsoldinIndiaTheLiberalizationofIndia’sGovernmentin1991“NewIndustrialPolicy”Traderules®ulationssimplifiedForeigninvestmentincreasedPepsientersin1986Coca-Colafollowsin1993PoliticalEnvironmentinIndia29PoliticalEnvironmentinIndiaIndianLawsUnlawfultomarketundertheirWesternnameinIndiaPepsibecame“LeharPepsi”Coca-ColamergedwithParleandbecame“Coca-ColaIndia”DifferentLawsforPepsiandCokeCoca-Colaagreedtoselloff49%ofitsstockasaconditionofenteringandbuyingoutanIndiancompanyPepsienteredearlier,andwasnotsubjecttothisPoliticalEnvironmentinIndia30PoliticalEnvironmentinIndiaProblemsIndiaforcedCoketosell49%ofitsequitytoIndianinvestorsin2002Cokeaskedforasecondextensionthatwoulddelayituntil2007IndiadeniedthisPepsiwasheldtothissincetheyenteredIndiainadifferentyear.CokeaskedtheForeignInvestmentPromotionBoardtoblockthevotesoftheIndianshareholderswhowouldcontrol49%ofCokeChangeinoversightoftheFIPBPastlobbyingeffortsmadeuselessPoliticalEnvironmentinIndia31PoliticalEnvironmentinIndiaCouldtheseproblemshavebeenforecastedpriortomarketentry?ProbablynotInconsistent,andchanginggovernmentHowcouldthesedevelopmentsinthepoliticalarenahavebeenhandleddifferently?CokecouldofagreedtostartnewbottlingplantsinsteadofbuyingoutParle,andthuswouldn’tofhadtoagreetosell49%oftheirequityPoliticalEnvironmentinIndia32TimingofMarketEntryTimingofMarketEntry33TimingofMarketEntryPepsi(earlyentry-1986)Advantages

EnteredthemarketBeforeCoca-ColaandwasabletogainafootholdinthemarketwhileitwasstilldevelopingGained26%marketshareby1993DisadvantagesWereforcedtochangetheirnametoLeharPepsiGovt.limitedtheirsoftdrinksalestolessthan25%oftotalsalesStruggledtofightofflocalcompetitionTimingofMarketEntryPepsi(34TimingofMarketEntryCoca-Cola(lateentry-1993)AdvantagesWereabletobuy4bottlingplantsfromindustryleaderParleAlsoboughtParle’sleadingbrands:ThumsUp,Limca,Citra,GoldSpotandMazaaSetup2newventureswithParletobottleandmarketproductDisadvantagesDeniedentryuntil1993becausePepsiwasalreadythereHardertoestablishmarketsharewithPepsithereWerenotallowedtobuyback49%ofequityTimingofMarketEntryCoca-Col35ResponsestoIndia’sEnormityPepsiandCoca-ColarespondedinmanywaystotheenormityofIndiaintermsofitpopulationandgeographyResponsestoIndia’sEnormityP36ResponsestoIndia’sEnormityProductPoliciesCateringtoIndiantastesEnteringwithproductsclosetothosealreadyavailableinIndiasuchascolas,fruitdrinks,carbonatedwatersWaitingtointroduceAmericantypedrinksCoca-ColaintroducingSpriterecentlyIntroducingnewproductsBottledwaterResponsestoIndia’sEnormityP37ResponsestoIndia’sEnormityPromotionalActivitiesBothadvertiseandusepromotionalmaterialatNavrartriPepsigivesawaypremiumriceandcandywithPepsiCoca-Colaoffersfreepasses,CokegiveawaysaswellasvacationsUseofdifferentcampaignsfordifferentareasofIndia“IndiaA”campaignstrytoappealtoyoungurbanites“IndiaB”campaignstrytoappealtoruralareasResponsestoIndia’sEnormityP38ResponsestoIndia’sEnormityPricingPoliciesPepsistartedoutwithanaggressivepricingpolicytotrytogetimmediatemarketsharefromIndiancompetitorsCoca-Colacutitspricesby15-25%in2003AttempttoencourageconsumptiontotrytocompetewithPepsiandgainmarketshareResponsestoIndia’sEnormityP39ResponsestoIndia’sEnormityDistributionArrangementsProductionplantsandbottlingcentersplacedinlargecitiesallaroundIndiaMoreaddedasdemandgrewandasnewproductswereaddedResponsestoIndia’sEnormityD40CokeandPepsi’s“GlocalizationStrategies”Whatis“Glocalization”?Global+Localization=GlocalizationBytakingaproductglobal,afirmwillhavemoresuccessiftheyadaptitspecificallytothelocationandculturethattheyaretryingtomarketitin.BothcompanieshavesuccessfullyimplementedglocalizationCokeandPepsi’s“Glocalizatio41Pepsi’sGlocalizationPepsiformsjointventurewhenfirstenteringIndiawithtwolocalpartners,VoltasandPunjabAgro,forming“PepsiFoodsLtd”.In1990,PepsiFoodsLtd.changedthenameoftheirproductto“LeharPepsi”toconformwithforeigncollaborationrules.Inkeepingwithlocaltastes,PepsilauncheditsLehar7UPintheclearlemoncategory.Pepsi’sGlocalizationPepsifor42Pepsi’sGlocalizationAdvertisingisdoneduringtheculturalfestivalofNavrartri,atraditionalfestivalheldinthetownofGujaratwhichlastsforninedays.Pepsi’smosteffectiveglocalizationstrategyhasbeensponsoringworldfamousIndianathletes,suchascricketandsoccerplayers.Pepsi’sGlocalizationAdvertisi43Coca-Cola’sGlocalizationFirstjoinedforceswiththelocalsnackfoodproducerBritanniaIndustriesIndiaLheearly90’s.FormedajointventurewiththemarketleaderParlein1993ForthefestivalofNavrartri,Coca-Colaissuedfreepassestothecelebrationineachofits“ThumsUp”bottlesAlsoranspecialpromotionswherepeoplecouldwinfreevacationstoGoa,aresortstateinwesternIndiaCoca-Cola’sGlocalizationFirst44Coca-Cola’sGlocalizationCoca-Colaalsohiredseveralfamous“Bollywood”actorstoendorsetheirproducts.Whocouldforget…VivekOberoiAishwaryaRaiCoca-Cola’sGlocalizationCoca-45Coca-ColaIndia’sMistakesEntersMarketattheWrongTimeByenteringatthistime,Coca-ColaIndiaagr