Coca Cola in India

Group Members

馬立歐 陳奕光 伊詩卉 MA1N0225 M9970112 MA1N0246

Problem…The Coca-Cola Company, its subsidiaries and products have been subject to sustained criticism by both consumer groups and watchdogs, particularly since the early 2000s.

Allegations against the company are varied and criticism has been based around;

Perception of the company as behaving unethically has led to the formation of pressure groups such as "Killer Coke", boycotts of Coca-Cola and related products and lawsuits

• Possible health effects of Coca-Cola products• Questionable labor practices (including allegations of involvement with

paramilitary organizations in suppression of trade unions)• The company's poor environmental record• Perception of the companies' engagement in monopolistic business practices• Questionable marketing strategies and violations of intellectual property rights.

What should Coca Cola do to appease and ensure its survival in the market?

• First it has to convince Indian’s government, the world and re-gain the market by:

• A variety of corporate social responsibility initiatives, for example with campaigns such as “Every Drop Counts”.

• Campaigns to save water, against pollution, recycling and of course, healthier products.

Also, try to solve problems such as:Health effects

• Acidity• High fructose (sugar

and carbs)• India secret formula

ban

• Most nutritionists advise that Coca-Cola and other soft drinks can be harmful if consumed excessively. (a lot of sugar and carbs)

• Regular soft drink users have a lower intake of calcium, magnesium, ascorbic acid, riboflavin, and vitamin A.

• The drink has also aroused criticism for its use of caffeine, which can cause physical dependence.

• A link has been shown between long-term regular cola intake and osteoporosis in older women (but not men).

Environmental issues

Pesticide useWater usePlants pollution

• In India, there exists widespread concern over how Coca-Cola is produced.

• In particular, it is feared that the water used to produce Coke may contain unhealthy levels of pesticides and other harmful chemicals.

• It has also been alleged that due to the amount of water required to produce Coca-Cola, aquifers are drying up and forcing farmers to relocate

• There were several protests opposing the proposed Coca-Cola bottling plant in fear of water depletion and contamination.

Economic business practicesMonopolisticMarketing"Channel stuffing" settlementBribery accusations

• Buying biggest companies in each country

• Coca-Cola has been accused of bribing the American Academy of Pediatric Dentistry (AAPD)

• Commercials with healthy image

In this way, Coca Cola wont have so many obstacles to fight with every

country’s government.

Therefore, an easier way to survive in the market.

http://www.youtube.com/watch?v=fajiWmAuvSY

Question 2:What effect will this case have on Coca-Cola‘s operations in India ?

Coke in India • When Coke first entered the Indian market:– The Company had enormous sales and gained significant

market share – Coke has become a popular soda in the Indian market

• BUT in 1977, Coke forced to exit India • However, in 1994, Coke reentered the market • In addition the company purchased some local cola and soft

drink brands (e.g. Thumbs Up)• Set up a plant in Plachimada but had to shut it down again

after 4 years … WHY?

What happend?

• 2002 anti-Coke campaign started „Coca Cola, Quit Plachimada, Quit India“

• People living next to the plant experienced water scarcity • Furthermore the water was not drinkable anymore • As a result everybody thought it is Coca Cola‘s fault and the

protestor group grew over time and was supported from people all over the world

• Not only Coca cola was ordered to stop using the ground water

HOWEVER, it was not only Coca Cola‘s fault

Beverages contained pesticide Tests proved that a lot of beverages

contained high levels of pesticide that were potentially harmful to human

beings

• As a result , Coca-Cola lost millions in the Indian market

• But in order to gain back market share, the company tried to get back the trust of the population by investing in CSR initiatives

What effect will this case have on Coca-Cola‘s operations in India?

• Coca Cola needs to rethink where to build up a plant

• If a counrty has already water scarcity the company should rather leave the water to the people (coca cola needs 3liters of water to product 1 liter of coca cola)

• In order to successful in Indial, Coca cola should now invest in this country to help them to get out of their position since the reputation of Coca cola is not very good in India

• Coca Cola has to rethink where to built up a plant that it doesn't effect the environment and the people around the location (pollution and water scarcity)

• Establish a good CSR system to rebuild the brand image and regain the trust of the people.

• Try to form an alliances with other companies (ex: Pepsi) to fight prejudice against soda drinks.

• Or form an alliance with other comapnies in order to fight against water pollution and water scarcity

Question 3:What lesson does this case have for other

multinationals that want to enter the Indian market ?

Parexgroup- French Company

• Global leader maunfacturing of innovative and high quality dry mix mortars

• 60 manufacturing facilities in 21 countries• 3150 employees worldwide• Product brands: Davco and Lanko

ParexGroup enters Indian market

• Operate in January 2013• Local parter Apurva India Ltd.• Establish the company's project sales and

marketing office in Mumbai• By the end of 2013, ParexaGroup will be

operating 1st manufacturing plant in the India• Offer a wider range of products and services

to customers

• Initially focus on 2 market segments: waterproofing systems under Davco brand and concrete maintenance and potential solutions under Lanko brand.

• Committed to ensure activities preseny a high level of protection for health and safety of its employees, customers, the publics, the environment and meet statuory

and regulatory requirements• 3 offices in Inian- Mumbai Chennai, and Delhi

KONKA- Chinese Company

• Established in 1980• Chinese leading CE and mobile Company• Main prodsucts: color TV sets, mobile phon,

washing mechine,etc.• 5 manufacturing plant in China, production

bases in India, Mexcio, and Turkey

KONKA sets to entre Indian market

• Enter Indian smart phones market with investment of USD 30 million

• A strategic partnership with MAK Mobility Private Limited in Indian

• An entry strategy focus on the high end camera smartphone market

• KONKA launching a product line for Indian

market: 1. Expose for avid

photographers2. Tuxedo for business

excutives3. Tango for music lovers4. Viva for fashion divas

Enjoy the video: Coca-Cola in India

• http://www.youtube.com/watch?v=fajiWmAuvSY