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Corruption and india essay
Corruption and india essay
Corruption and india essay
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Introduction
To give a short introduction to the circumstances affecting this case of Pepsi & Coca Cola it has to be said that in general it is not just simple for MNEs to invest and enter foreign markets as regulations and restrictions differ from coutry to country and hence ifluence international business negotiations to a great extend. Therefore MNEs investigating in foreign markets have to either adopt to those condition given by the host country government, which of course to a certain extend has to be negotiated as no one of those parties want to loose their maximum independence- or the MNE decides not to take further steps towards the foreign operation and leaves the feeld by assumingly – in turn – missing out a great opportunity, but this again depends on a complexity of economic and cultural reasons influencing international trade, which I will develop critically in the further case study of Pepsi & Coke in accordance to the following questions.
1.) Did PepsiCo make too many concessions in order to enter the Indian market?
Could the company have negotiated better?
In this case study PepsiCo – for the second time – intends to enter the Indian market, though already having experienced major problems which consequently led to their first departure (for non profitability). As well Coca Cola departured India after harsh disagreements with the government.
Why after all did Pepsi enter again, facing a country with such strongly adverse feelings towards foreign companies – which is rooted in Indians history of colonialistic times when the British, French and Portuguese were extracting the country‘s recources ‚‘its wealth‘ without returning noticeable benefits to its economy.
Moreover they feared that national companies would not be able to compete with foreign investors and as a result of this high artificially prices and profit margins reduced incentives for national companies to enter. This almost irrepairable bad approach towards foreigner went even that far that journalist widely reported that PepsiCo had a CIA connection aimed at undermining India‘s independence.
However returning to the argument of PepsiCo having too many concessions or not, first as should have become clear now, the company was confronted with a govvernmental volatility and unwillingness to negotiate. It was rather a one-way game wherein PepsiCo had to agree with completely, or take its departure, as the company was not only faced with economic but also with moral issues (as mentioned above). Especially the confidence factor plays a great part in her which for the company turned out to be a rather costly factor as PepsiCo had to make various concession before they could enter the Indian market.
Opinions coupled alongside historical accounts provide a lesson demonstrating the truths of Coke’s corporate greed. Elmore’s argument development progresses in a way that the reader becomes furthered dismayed as the history lesson goes on. Coca-Cola ravaged precious water resources in third world countries which eventually resulted in a scale of humanitarian crisis, yet today The Coca-Cola Foundation’s mission statement reads: “…[We have] Committed ourselves to improving the quality of life in the communities where we do business”. Television commercials depicting delight paired with the soft drink, Coca-Cola’s slogan of, “open happiness” along with massive international event sponsorships that universally are recognized currently label the company as having a positive impact in communities. Elmore’s arguments successfully connect the dots, illustrating to the reader on the dissolute framework which held together and lead to the rise in Coca-Cola’s present day
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To handle the enormous scope of its business, the Coca-Cola Company has divided into six operating units: Middle and Far East Groups, Europe, The Latin America Group, The North America, The Africa Group and The Minute Maid Company. The head Quarter is in the United States. Methods of Research I will use The method of research which I will use is the secondary research, i.e. I have asked The Coca-Cola Company to send me their history and annual reports. I will also call The Coca-Cola Company office to ask some details, I will also use ask them some relevant questions (questionnaire method), interview the people on the high street and will do some research over the Internet. From those sources I am going to finish my all other tasks.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
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...e and Pepsi’s already established image as producers of premium product is key to discouraging other companies from entering the soft drink industry. However, as the market in the U.S has leveled off, they should continue to invest globally in marketing and advertising for further profit growth, which will in turn positively influence their well established brands to further increase soft drink sales and profits.