Socio and Economic Barriers Faced by Pepsi Co and Coke in India

Management

Name

Institution

Management

Socio and Economic Barriers Faced by Pepsi Co and Coke in India

Venturing into a foreign market requires a thorough market research to establish political, cultural and economic environment are conducive for the proposed business. When Coke initially entered the Indian market, it had not done its research and had to leave the market as it was not prepared to meet the demands of the state at that time (Bateman & Snell, 2013). Pepsi Co entered the Indian market a few years later and was able to establish itself as it had done its market research.When Pepsi Co ventured into the Indian Market in 1986, the government of India protected local industries from foreign companies. Coke re-entered the Indian market in 1993 and even at this time the government of India had not been liberalized and had the policy of forbidding foreign products if a similar was produced by indigenous producers. Due to the protectionism policies, volume of sales by Pepsi were dictated by the government and this resulted in low sales. Coke was forced to sell part of its equity as a condition for entering and buying an Indian Company. Indian laws also forbade the promotion of international brand names if products were sold within the country (Bateman & Snell, 2013). This forced both Pepsi Co and Coke to incorporate Indian names into their product names, for example, Pepsi were renamed ‘Lehar Pepsi’ while Coke was renamed ‘Coca Cola India.’ The Indian government thus controlled the way companies did business by imposing laws and rules of doing business.Pressure groups in India had a political clout in India and affected the business of Coke and Pepsi by calling for a boycott of American and British goods when Iraq was attacked. They even claimed that drinks made by these two companies were contaminated by pesticides (Bateman & Snell, 2013).In conclusion, the political and legal environment in India was not predictable. Both Pepsi Co and Coke were not proactive.

Amazon Grocery and Aldi Grocery

Customers have the option whether to buy goods online or from retail outlets. Amazon Grocery sells its products online while Aldi sells from its retail outlets.Amazon’s target market is high-end shoppers and they ensure their products are suited to satisfy the needs of these shoppers. Families with several children are also a key target. Aldi, on the other hand targets shoppers who are looking for quality products at discounted prices. Amazon has taken advantage of the changing life styles where a particular group of shoppers do not have time to visit retail outlets and also employed the strategy of free delivery. Aldi, on the other hand, has identified the need of shoppers who require quality products at affordable prices. Besides the low costs, Aldi specializes on a limited number of fast moving products which are their own brands (Hammond & Berman, 2014). The simplicity of their operation has contributed to their growth and profitability in spite of spending minimum amounts on advertising. Amazon’s approach requires that they advertise on internet and television to enable prospective shoppers see products before placing orders.Aldi is better positioned than Amazon because it can reach a wider market. Although Amazon offers convenience, only a small percentage of shoppers are able to shop online because it is expensive. Aldi should maintain their quality and pricing strategy to sustain their edge over other competitors. Aldi should start vigorous advertising campaigns to attract new customers and attain their regular customers (Hammond & Berman, 2014). It is important for Aldi to use technology to be more competitive. These strategies will improve the company’s image of Corporate Social Responsibility because the company will be showing it cares for the community by providing quality products at affordable prices. The advertisements will be able to communicate the company’s activities and technology will enhance the communication between the business and the community.

References

Bateman, T. S., & Snell, S. (2013). Management. New York, NY: McGraw-Hill Irwin.

Hammond, R., & Berman, B. (2014). Your Success in the Retail Business: (collection). Upper Saddle River, N.J: FT Press Delivers.