Case Analysis Coca Cola vs. Pepsi in India: The Battle of the Bottle Continues

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Case Analysis Coca Cola vs.
Pepsi in India: The Battle of the
Bottle Continues
Submitted To:
Prof. Karan Shastri
(Somlalit Institute of Management Studies)
Submitted By:
Hardik J. Shah
Roll No: 80

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 PESTEL analysis of soft drink industry:
i. Political: Political change from one party to another and change in
government laws. Due to change in central government from the Congress
Party to the Janata party Coca cola was asked by the new government to
reduce its equity holding to 40 % and to share the secret behind the
concentrate enabling its local manufacture. Both these conditions were not
accepted by the company and hence they withdrew from India.
Liberalization in 1990s helped the multinational soft drink players to enter
Indian market
ii. Economical: Market was sensitive to the prices offered by the local
competitors. Also the soft drink market was quite cyclical with nearly 40%
sales happening during summer. So the companies had to spend on their
advertising of products to endorse customers.Also per capita consumption
was low as soft drinks were less preferred by people.
iii. Social: Soft drinks were generally not very popular in India in 1950s and
early 1960s. Also preference for soft drinks over other beverages like tea
coffee, fruit juices, etc. was less.
iv. Technological: Manufacturing and bottling plants were highly capital
intensive and highly automated, involving sophisticated machinery and
required Up gradation and modernization which were also expensive and

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bottlers had no interest in investing in the same. So the soft drink
companies had to invest in this in order to increase their sales.
 Resources and capabilities on which Pepsi should focus are:
i. Pepsi should focus on its marketing strategy instead of investing a lot in
managerial resources in manufacturing and labor problems.
ii. Should include research and development group in order to compete in
the competitive environment.
 Core competency of Pepsi:
i. Resources and Capabilities: Aggressive marketing strategies and promotional
campaigns
ii. Had done aggressive marketing in order to create good will and to position
themselves in competitive market.
iii. Financial support and technology: they invested in bottling plants and also in
up gradation and modernization of production process.
 Business strategy of Pepsi:
Pepsi adopted Differentiation as its strategy. Had done aggressive marketing and
build presence in many cities by analyzing customer need.