Coca Cola in India
Coca Cola in India
The Coca Cola Company has faced serious challenges since its entry into the Indian market. This has been because of various situations such as, in 1977, the Coca Cola Company pulled out of the Indian market because the Government demanded the secret formula of Coca Cola. (Jonathan, 2008). In addition, the biggest challenge was when it was accused of producing and selling unsafe and unhealthy drinks. The Centre for Science and Environment released a study that showed highly unsafe pesticide levels in Coca Cola products these challenges were brought about by the difference in the systems and structures between America, its headquarters and India a relatively new market distinct from America. In addition, the law system in India is different in certain circumstances from the United States of America and other familiar markets. In addition, the market structure and forces driving the market are different. The cultural differences among the Indians that included their view of work and how they value work also posed a serious challenge. The Indians had had undervalued work and preferred leisure (Jonathan, 2008). There was also the problem of the Indians suspicions of foreign investors and negative attitude towards them creating an even tougher challenge. However, the introduction of The Energy and Recourses Institute to assess the operations of Coca Cola Company was a step in the right direction
The Coca Cola Company should have taken bold and quick steps in order to appeal to the Indian people who had a completely negative attitude towards multinational companies. In order to appeal to the new market the company should have come up with structures that would incorporate the Indian community. It would have taken meaning into integrating the company’s model and marketing system by associating the members of the Indian community (Fraser, 2010). This would have been made possible by Coca Cola adjusting the system and structure to suit the Indian market. The company should have also focused on the consumers in relation to accusations leveled against it. In addition, the accusations were fuelled by non-governmental organizations, which had diverse impact and ability to convince the Indian people. The Company should have been swift in winning back the confidence of its consumers instead of only focusing on the legal framework of the challenge. The failure of the company to realize that, in India news spreads fast, was also a major drawback (Jonathan, 2008). The interpretation of the Indian people that silence meant guilt should have also been a wake up call for Coca Cola to reassure and reaffirm its position as a poisonous free product producer. The company should also have considered the non-governmental organizations and collaborated with them to highlight the issue of poisonous pesticides prior to the accusations. Through this, the company would have been familiar with the alarming situation and come up with alternative solutions to the problem. Moreover, this would have prevented the litigations and court processes.
In order for Coca Cola to acquire an increased number of the soft drink Indian market, more endeavor needs to be undertaken in its outreach and target market. The company needs to be more aggressive in its campaign to execute a healthy, harmless and environment friendly production process. This must be done in a transparent and ethical manner. The marketing strategy could also incorporate the Indian movie culture involving Bollywood, which accounts for the second largest movie industry globally. The incorporation of Bollywood, and the large following it commands, by using the various actors, makes the consumers more familiarized with the product. Coca Cola should thus ensure and create confidence in the part of consumers. It should also carry out an aggressive marketing strategy, which incorporates the Indian culture and lifestyle. The companies should also improve the living standards of the local people. This can be achieved through various projects of corporate social responsibility. This will go a long way in ensuring the problems he are relieved if not solved. In addition, the creation of employment opportunities to the indigenous people and involving them in the process of production will boost their confidence in the products. Through this, the company will be successful in making the Indians familiarize with the product and its connection with the indigenous people.
Companies like Coca Cola and Pepsi should employ various methods in order to demonstrate their will and commitment in working with people from different cultures. These methods should also show respect for the cultural and natural environment of these communities. The companies, through social, corporate responsibility programs, can achieve this. Through identifying the needs of the population in the area, the companies are able to fund various projects and meet the requirements of the people. This creates confidence in the local population and improves the image of the company. For example, Coca Cola has taken numerous initiatives in order to improve the water conditions in India and the world over. It has also pledged support for the United Nations Global Impact. It is a Co-founder of Global Water Challenge, which aims at improving water access and sanitation in needy countries. In terms of protecting the environment, is continuously improving energy and efficiency by using hydro fluorocarbon-free insulators for 98% of new refrigerated sales and marketing equipment. Especially in India, more than 30 percent of the total water used in the production process is converted and returned to the ground system. The company is also installing water-catching devices in order to boost water levels. Coca Cola is also collaborating in climate protection and protecting the “seven of the world’s most critical fresh water basins” (Jonathan, 2008). Coca Cola has also employed approximately 6000 locals. This has reduced the rates of unemployment and, as a result, empowering the community. However, more needs to be done in order to integrate the culture of the Indian community. This can be done by sponsoring of various Indian cultural events. The companies can also device new ways of incorporating the Indian culture in their activity. In addition, Pepsi is involved in corporate social responsibility activities such as digging village wells and engaging in activities to reduce wastage of water especially at it production facilities in India. The companies should also increase their involvement and cooperation in the education system especially in poor Indian communities. This can be done by building more schools, cooperating to research with institutions of higher learning and offering managerial training to students and graduates.
The Coca Cola Company has faced key set backs in India especially with major attacks from the Non Governmental Organizations, which have a significant impact on the decision making of the majority of Indians (Veronica, 2010). This is also because the multinational is a good target to create publicity and shift attention on the various issues affecting Indians. This includes the poisonous pesticide contamination. The fact that they are among the worldwide most valuable brand, their value is primarily influenced by their image and outlook of the products. Thus, they continuously endeavor to rebuild their image among the Indians (Jennifer, 2005). They are not only challenged to win the task of winning the consumers trust but also to maintain this trust. Their ability to incorporate the Indian people in their company structure and system will also boost the company’s image and consequently increase returns. The whole scale investment of the Company and the integration of India as a key source and driver of the production process is a step in the right direction.
Fraser, P. (2005). The Practice of Public Relations. Upper Saddle River, New Jersey: Pearson Prentice Hall.
Jennifer, K. (2005). Coca Cola in India Journal Case Study Competition in Computer Communications. Tuck School of Business Study
Jonathan, D. (2008). International Management. Culture, Strategy and Behavior. Indiana University: McGraw Hill Irwin.
Veronica, A., (2010). Coca Cola Case Study in India. San Francisco State University.
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