Swot analysis

In order to understand what situation Coca Cola and Pepsi had to deal with in India, it is
necessary to understand the politics in India. The politics in India play an important roles to
influence the growth of foreign carbonated beverages. According to the case, it seems like that
Indias government opened doors to foreign investors but India is seem as an unfriendly country
for foreign investors because there is unfavorable policy, Principle of Indigenous Availability
banning if an item could be obtained locally, imports of a similar product were forbidden. In
1991, Indias government pass new industrial policy which eliminate barriers such as
bureaucracy and regulation to foreign direct investment.
Coca-Cola and Pepsi both entered the India market in different ways. There were
advantages and disadvantages when they enter the market.
Pepsi (early entry)
Advantages:

As the earlier arrival, it gained a foothold in the market while it was still developing.
Gained 26% market share by 1993.

Disadvantages:

Pepsi were forced to change its name to Lehar Pepsi

The government limited its soft drink sales to less than 25% of total sales.
Pepsi were struggled to fight with local competition

Coca-Cola (later entry)

Advantages:

Set up 2 new ventures with Parle to bottle and market product.

Coca-Cola bought Parles leaning brands: Thums up, Gold sport and so on.

Disadvantages:

Denied entry until 1993 because Pepsi was already there.

Coca-Cola was hard to gain market share.
It was not allowed to buy back 49% of equity.

In the enormous market of India, there are already many brands and manufacturers in the market.
Pepsis and Coca-Cola both have given the customers a deep impression of carbonated beverages
manufacturers. However, the market is changing so quickly. And in the fickle environment of
India, most companies should do their specialization and perform their own core
competitiveness.
Identify Problems
When Coca-Cola and Pepsi enter the India market, both companies set their products
tastes close to other brands that already available in India. And they were getting in to new
products as bottled water, which also there were many brand out there already. In India, there are
only two high season for consumption of soft drinks, which are the summer session lasts about
seventy-five days in mid-April to June and the second major event for Cola and Pepsi, the annual
Navratri celebrations. Cola and Pepsi used different promotional strategies to raise the sale
during these events in large cities all around India. Pepsi gave away premium rice and candy
with Pepsi. Coca-Cola offered free passes for those campaigns. However, Pepsis began with
aggressive pricing policy. Coca-Cola tried to encourage consumption by cutting price by 15 to
25%. The pricing and product policy are problems for both companies.

Another issue is just when things were look better, an environmental organization
claimed that soft drink produced in India by Coca-Cola and Pepsi contained significant level of
pesticide residue. As the results, their products were safe to drink under local health standards.
However, in 2003 and 2006, the study showed that pesticide residue of their products were 24
times higher than the European Union standards according to the case.
After the cooled down from the pesticide incident, there is another big environment
problem which was Coca-Cola turned 1.5 million liter of water into wastewater globally because
according to the case, Coca-Cola used precious groundwater, lacing its drink with pesticides
and supplying farmers with toxic waste used for fertilizing their crops.
Identify / Evaluate Alternative Courses of Actions

To develop a unique product for their companies. Because of Pepsi and Coca-Cola share
the most similar taste of each other. Develop a unique product will allow them to compete

in the market.
To save water as much as possible, and to invest in recycling use of water. This can also
change the image of a company. However, investing in recycling use of water will cost

firms large amount of money.

To show social responsibility for Coca-Cola. For example, set up a fund to help those

people who need it, to help promote the ecology of education.

Having a sustainability focus through total quality management - Total Quality
Management is a structured system for satisfying internal and external consumers and
suppliers by integrating the industry environment, continuous improvement and so forth.
This plan will allow Coca-Cola produce soft drinks under the quality control.

Recommended Course of Action or Strategy

Both Coca-Cola and Pepsi successfully enter the India market. Pepsi entered early and
did better on marketing and advertising strategies. Pepsi was more widely accepted and it has
more market share. However, Coca-Cola had many conflicts with government. Coca was trailing
Pepsi in market share. I think that Pepsi will be better in the long run. Therefore, Coca-Cola need
to solve all the issues that it is facing. In order to ensure that Coca-Cola will still grow in the
future and still provide the demands and needs for soft drink and beverages, the firm must be
able to consider an approach that will improve the potentialities of the firm in India market. The
firm should implement strategic management efficiently.
I know that Coca-Cola India is truly the largest and one of the most recognized industries
in providing soft drink and beverage product. However, it is undeniable that a large company is
always entitled of having problems and issues. Thus, each firm should always have an alternative
plan or proposal to solve all issues. In order for Coca-Cola India sustain its competitive position
in the marketing place and to reach back number one selling firm in soft drink and beverage
industry. Coca-Cola should learn from its mistakes and be open-minded about having new
management approaches such as product management and quality control in the industry.
Investment in quality products is a requirement to success for industry. Also water control is also
important for the industries. Also invest money on recycling water. This can change the image of
the industry. Also in this fickle environment of India, Coca-Cola should do its specialization,
perform its own core value and competitiveness.