Pepsi's Entry Into India - a Lesson in Globalization Essay example
PGDM – IBRoll No. 007 |
ANSWER 1. A. NEED FOR GLOBALIZATION
Depending on the strategy that a company follows, there are three primary reasons a company like Pepsi engages in international business: 1. To Increase sales/ Sales Expansion a. Economies of Scale
A company like Pepsi usually operates on the principle of Economies of Scale. In order to achieve a larger market canvas and operate on this minimum efficient scale of operation, it is very essential that the company covers more market and potential customers by moving from a saturated market to an unsaturated one. (E.g. Pepsi shifted its focus from …show more content…
Since the company was able to strike directly on the prevailing needs of the ailing society in line with government’s expectations, it was able to enter into Indian market as a Joint venture.
ANSWER 3. 1. Post Liberalization Change 1. The removal of various restrictions meant that it no longer had to fulfil many of the commitments it had made at the time of its entry. 2. The government removed the restrictions that bounded Pepsi’s investments in the soft drinks business to 25 % of the