International Management and Leadership
You are given 2 example student responses to the topic below. Each student response is to have an independent response;
Read the topic the students responses are based on.
Reply to each individual student per the directions that follow the topic.
Pepsi Co and Coke American beverage giants, must adhere to the U.S Foreign Corruption Act wherever their businesses may take them.
Both companies expanded their U.S businesses to India with differing initial results. Coke came home (initially) and Pepsi Co prospered.
Students were asked to research and explain the socio-cultural barriers faced by Pepsi Co and Coke American beverage giants.
The response you are to give to each of the 2 students will include a minimum of three paragraphs that cover the following:
· What in your view were the reasons the student gave which negatively impacted Coke and positively touched Pepsi Co?
· Choose a third international company in a different country and discuss as a comparative to the student's work on socio-cultural barriers faced by Pepsi Co and Coke American beverage giants.
· Do you feel that cultural training is an essential pre-requisite for expatriates in any host country?
· Why/Why not?
Remember to use APA referencing and citations in the body of your posting.
STUDENT RESPONSE 1
Explain the socio-cultural barriers faced by Coke and Pepsi Co. What in your view were the reasons which negatively impacted Coke and positively touched Pepsi Co?
Coke first entered India in 1950 and grew until 1977 when the company along with other multinational companies closed due to the government seizing corporate assets. Coke returned back to India in 1993 after the laws were loosened but the company struggled with their marketing strategies.
The reasons I feel Coke was negatively impacted by socio-cultural barriers were:
· India's government seizing corporate assets
· Coke not taking the time to fully understand India's culture
· Coke not embracing small family operated stores / and local markets
India is one of PepsiCo's largest global markets. PepsiCo is planning on investing 5.5 billion dollars in India by 2020. The reason PepsiCo was positively impacted by socio-cultural barriers were:
· PepsiCo Indian first CEO Ramesh Vangel was very persistent, innovative and took risk
· PepsiCo entered India's market thru food processing turning its focus on another opportunity for the company to gain more capital
· PepsiCo had a better understanding of India's culture than Coke
· PepsiCo has taken the time to understand the locals taste
References
· Coca-Cola In India: Understanding Culture To Do Business.(2013). Value Work.
· Das Gupta.S (2014). How India Became Pepsi's Right Choice. Business Standard.
· PepsiCo India: A High- Priority Market for PepsiCo. (2013). PepsiCo Live.
STUDENT REPONSE 2
There were many socio-cultural barriers faced by Coke Cola & Pepsi. The Indian government banned Coke Cola & Pepsi Co products. Coke Cola stocks dropped by $5 dollars in the New York Stock Exchange within a few days after reports & allegations were released by the Center for Science & Environmental (CSE) & Non- Governmental Organizations (NGOs) of India. Social groups who have high trust & integrity from the Indian population.
The reports that was released shows, pesticide residue in 20-30 of Coke Cola & Pepsi Co products which causes cancer and birth defects in people. Coke cola is the world most valuable brand whose value is greatly influenced by the image of the company and its products. Which result in the company primary problem rebuilding their image to Indian population & regaining Indian consumers.
My view on the negative effects to Coke Cola, were instead of a fast impulsive respond to the accusations. Coke Cola should have not attacked the CSE & NOG's immediately, it would have been much more beneficial to work with them.
Which will prove to the Indian people diligence & unity amongst the two. Seek a non bias third party investigation that shows who was wrong or right regarding the pesticide residue findings.
This positively touched Pepsi Co because they launched their own investigation while Coke Cola publicly attacked the CSE & NOGs. Pepsi Co approach was more tactful and transparent.