Coca Cola in India

pagan Impact on Business A Case Study on Coca Colas heathenish Issues in India admin August 20, 2012 Blog No comments Socio Cultural barriers faced by coca cola in India Coca cola, the worlds largest tradeing soft racket mixer club had established its strong presence in the world since 1886. Coca-Cola is the first international soft drink dishonor to divide in the Indian tradeplace in the early 1970s. Till 1977 Coca-Cola was the leading marking in India later, due to FERA (Foreign Exchange Regulation Act), they left(p) India and didnt light till 1993.Coca-Cola had to face many issues regarding its feel, resourcefulness victimization and market exploitation a retentive with price-quality trade-offs. People either over India atomic number 18 challenging Coca-Cola for its annoyance of water resource. Coca-Cola had affected both quality and quantity of ground water. out-of-pocket to its waste extracts, Coca-Cola was criticized for polluting the nearby fresh water and ground water and acres because of this issue, farmers argon suffering from water scarcity. Despite all these social and heathen issues, customers be using Coca-Cola due to its strong brand news report all over the world.This is because Indians are now using to a greater extent than soft drinks and the youngsters are much in this category. However, with many studies and policy changes, Coca-Cola will be equal to(p) to establish its brand reputation and increase its market deal out in the near future. This report is prepared from an organizational point of view. The point dumbfound is to prepare a report from a consultant point of view, as Coca-Cola has hired us to do a market theatre of operations and outline on the ethnical factors the friendship is envisaged to face in the Indian Market.Read raise to gain better commiserateing about the impact of culture on logical argument processes and activities, and in any case on the business performance. 2. TERMS OF REFE RENCE? Our society is the leading consultant in India which focuses on Indian market studies. We bestow market surveys on companies and their products. We do market survey based on the present and future market situations. We abet our leaf node to have a meet stand in Indian market against their competitors, and help them with strategies to gain the market, market segmentation, product segmentation and sales techniques.It is possible by analyzing the chivalric and present narrows of the companion, and by learning their past actions in the society and the economy.? Our lymph gland is of United States origin which is a leading soft drink connection in entire world. Coca-Cola has got a strong brand cypher with out the world. Our client is the first company which introduced soft drinks in the world. familiar has already accepted its taste and quality all over the world.? Our client would like to realize about the present condition of Indian market so tat they cease start their business according to that.They likewise want to know about the culture of the Indian hatful to know about their go through nature. The client demand to know whether they locoweed live in Indian market and what are the drawbacks that they may envisage during their operations in India and that they should consider before starting up the business in India. 3. CURRENT SCENARIO? There has been a great competition between refreshment drinks in Indian market. Coca-Cola is the worlds largest and first soft drink manufacturer. As percentage of the Globalization program, India has made it open for multinational companies to enter the Indian market.Globalization has made the whole world into one market by reducing the trade barriers and minimizing the risk. It is noticeable that many multinational companies had failed in Indian market. This failure is mainly due to improper association about the unsophisticated and the national culture. It is very all cardinal(p) to know about the people and their consuming manner. Culture plays an central role in consuming behavior. Coca-Cola is mainly associated to the issues relate to the brand, reputation and Corporate Social Responsibility (CSR).?Present situation of the state is favorable for multinational companies to start their business in India. As we had already seen that Coca-Cola is the largest selling soft drink in the world, they do have behave opportunities in the Indian market. Even though it is facing some social problem in India, Coca-Cola has got life-time-threatening market in India. The main range customers are youth who has already accepted the taste of the drink.? Coca-Cola should reach much splendour for the culture of the people because culture is a major cistron which decides the consumer behavior and purchasing patterns.India is a country where people are keener towards the culture. Considering Geert Hofsteds heathenish dimensions here in this case, it is clear that, uncertai nty avoidance India is slight and people are not so flexible to adopt the explosive changes. In India uncertainty avoidance is indexed at 50, which shows that people are afflictive and emotional towards exploitation and invasions from other people or culture so that before entering to the Indian market, it would be a good strategy to avoid much(prenominal) issues by planning the re-entry as a tint by step process. concord to Geert Hofstede (2001), culture is the collective programming of human judgment that distinguishes the members of one human group from those of another. Culture in this sense is a dust of collectively held evaluates. It is quite unders alsod from the bellow given chart that the US and Indian culture had got vast difference. So it is not easy to cop up with the Indian market. and then, it is important to have a fine psychoanalysis on Indian market so that they great deal novitiate a fail proof and systematic market entry.Source Geert Hofstedes Cult ural Dimensions? 4. ANALYSIS OF THE SITUATION? The present situation can be canvass by cram analysis which clearly shows the strengths, weaknesses, opportunities and threats which the client is envisaged to meet. India is a country where the cultural diversity and linguistic differences process it difficult to identify how the company is going to be traded while they enter the Indian market. Indians are those who give more value to trust , value, quality and so on.Therefore, it is very important that they should give importance for impairment, Quality and Quantity which means, Indian consumers have more purchasing power for products like high level of quality with less(prenominal) price in that respectfore, it is clearly states that the company should not entertain any price quality trade-offs in Indian market.? The below section explains the SWOT analysis of the company. The analysis shows where the company is more powerful in the market compared to its competitors and where it is calendar week and how to improvise them to get more market share in present market.? 4. 1. STRENGTH? Reputed brand? Global brand recognition? Bottling system? technical advancement? Efficient management system? Good marketing knowledge 4. 2. WEEKNESS? Lack of knowledge about Indian culture in breaker point? Uncertainty avoidance? Lack of marketing expertise in the Indian conditions? Hazardous by products and health issues? Facing issues with water exploitation and resource exploitation all over the world 4. 3. OPPORTUNITIES? Huge market? development in technology? Growing Indian market? Good brand name? International trade barriers has been reduced? Youngsters tendency to adapt to the Hesperian culture 4. . THREATS? Threat of substitutes? Health consciousness of Indian consumers? Cultural habits? Price war? Unstable political condition? Uncertainty avoidance? oddment in management styles? Indian tendency to avoid foreign products The to a higher p lace mentioned are the strengths, weaknesses, Opportunities and threats of Coca-Colas operations in India. It is very clear from this SWOT analysis that there is good opportunity for Coca-Cola in Indian market because most Indians have accepted the taste, so that it is very easy to get across the market and to earn more market share in the Indian market.However, this needs to have clear cut ideas about promotion techniques and domain relation activities since the competitors have strong grounds in India market and needs to over get laid the pres sure raised by socio-cultural barriers.? 5. SOLUTIONS AND RECOMMENDATIONS? Coca-Cola need to concentrate in many aspects so that they can grab more market share and earn respect from the community members. The companys brand reputation and brand recognition is not enough for them to grow in the Indian soil. Indians take business so seriously and their approach is entirely assorted when it comes to purchasing patterns and habits.Therefore, Coca-Cola has to adopt alternate branding and promotion strategies to develop its strike out base in India.? 5. 1. PUBLIC RELATIONS? The main and foremost answer is that to communicate openly with the delineate constituents including the unexclusive, media, employees, trade channels, state and national political relation and suppliers. They should do an open and honest communication to resolve the problems so that issues can be identified and resolved. An honest and open approach is endlessly apprehended in the Indian society. Communication is the best method through which consumers can have proper and clear picture about the company and its product.Efficient public relation is very much equivalent to a smart and expeditious promotion, which eventually make the consumers to buy our products. Communication has its roots in a persons behavioral aspects. Behavior is directly linked with culture. As Smith et al. , (2002), states, a persons behavior, cultural determine and rec ord can directly affect a business and the managerial behavior. Therefore it is important to communicate with the customers in accordance with their cultural status and values. Without proper public elations and communication there are chances that public may not get good knowledge about products and they may be left unnoticed.? 5. 2. ENHANCE RELATIONSHIP WITH GOVERNMENT? In India, it is widely known that the governing systems and procedure lack transparency in its operations. Therefore it is very important to have very close relation with the government. This can be through by actively participating in Government driven benignity operations and government initiated infrastructure development. Indian people and government al routes appreciate any true effort towards the development of the country.This also helps in building reputation among the people. India is a country, where reputation and relationships are valued to the core. They call up in qualitative elements than quantita tive elements. (Lothar Katz, 2008). Therefore it is important to salve good relationship with the government. Ethical issues like water resource exploitation etc. are believed to be hyped by the media and not the general public. However, it is important for the company to generate and implement a corporate social responsibility system in India, and operate within the guidelines of that system, which will prevent any such(prenominal) unwanted situations.? . 3. LAUNCH MARKETING CAMPAIGNS? Marketing campaigns are the best way to push a product into Indian market. This will acquire knowingness among the general public which makes the sales easy. Indians would like to have more flesh out on everything they choose let it be soap, or even a television, they would like to know more about the product. If the product is of optimum value in terms of price and quality, they would by all odds go for it.? 5. 4. LISTEN TO THE CUSTOMERS? Consumer behavior is an important part in any business. In order to amaze the differences and their demands, it is very imp0ortant to listen to the consumers.This can be done by initiating a survey or a feedback system. Listening means, the identification of areas and aspects where the company is lagging. If the company can make the customers feel that they are valued and considered, then they would come back to those particular products. Therefore, it is very important to listen to their comments, make needful adjustments on service and products and creating a strong customer base. 5. 5. MANAGING STYLE? way style and its efficiency decide the quality of management in a particular country.Multinational companies are believed to have many managing styles and organizational culture. However, t is important to have a management style tailored to the hosting countrys cultural and social value. Having an alien management style may create issues with the domestic employees in the long run. Also, developing a country special management styl e will help in delivering quality and on demand services to consumers and general public which will eventually help the company in the future. This will also make the employees feel that they are considered and their opinions are welcomed.? 5. 6.PULL BACK PRICE- QUALITY TRADE OFF PLANS? Indians are those who give more importance for quality and trust. It is practiced in India for many long years. Indians rely more upon quality of the product with lower prices. So India is not a place to follow up with Price Quality switch polish off. Even if the prices are higher, Indians may consider this product due to its quality. Indian society and the culture are very much vulnerable to quality tradeoffs.? The above mentioned are the important solutions and suggestions that company should concentrate more in Indian market in order to sustaining in this competitive market.It is too important for a company to have a long life in market so to attain this they should study the market at first i n detail and the culture and purchasing power of the public. 6. SUGGESTIONS? According to Robert Tannenbaum and Warren H Schmidt management styles are characteristic ways of do decision and relation to subordinates. Different management styles can be utilise based on the nature and culture of business, the nature of task, the nature of make water force and skills of the leader. This definition is given to understand management style in general.Every country has got its own style of management. It is necessary that they should have a sort view about the management style of particular country. As seen in definition, management varies from business and their task so it is very important to understand the task and the business at the most and then decide the let method of management. As Elenkov and Manev (2005) suggests, it is the responsibility of top managers to coordinate with the subordinate and infix in management styles and thereby improving the efficiency of the system.?Ind ia is the country where people give more importance to culture. Based on Geert Hofstedes cultural dimension in India uncertainty avoidance and long term taste is more. Uncertainty avoidance means Indians are too slow in accepting the sudden changes and they follow up with impostal styles so it is more important for the company to do a proper analysis on the consumer behavior and product requirement. Another important factor which should be taken into consideration is Long- Term Orientation. India is the place where this is followed more because Indians are more towards tradition and their customs.It is not easy to make them accept the sudden changes. So there should properly take consideration of long term orientation also (Geert Hofstede, 2001).? They should also give more importance for Price Quality Trade- Off issues. Indians are those give more value for trust, value and quality. They are keener towards more quality with fewer prices. They give more value for quality quit e price. So it is more important for the company to give more importance for the quality and their pricing strategy which need to be favorable for their business too.?In business it is not enough to keep present condition safe to have a long life and they need to study the market properly in every moment because the nature of market changes as new competitors come in. So to overcome these fluctuating conditions, they should continuously keep an open eye on how the market goes in neighboring moment. For this the company needs to establish a market analysis team up who can conduct on demand analysis of the market or outsource the task to us.? These are all the solutions and recommendations for the company which should be followed.It is not easy for a company to run business smoothly without considering the issues, oddly if the company is of foreign origin. Therefore they need to understand the market and key trends in order to sustain in the market.? 7. FORECASTS AND PREDICTIONS? The company can definitely establish their presence in Indian market once again, because it has already got a strong good brand image for long years. As Indians are those who give more importance for trust and quality, this brand image from past will help for its sustainability in Indian market. As Indias population is high, they can get a good customer base.Apart from this, in Indian customers include large number of youngsters who is adopting the modern cultural values and supporting westernization. Thus, it is easy for the company to make them as target customers. collectible to globalization, many multinational companies had entered Indian market and Indians had accepted many of those companies which clearly say Coca-Cola still have large potential and scope in the Indian market. As India is in the stage of modernization and economic reform, the aspiration of soft drinks has been increased so it is a good opportunity for Coca-Cola to make a proper stand in Indian market.After considering the above mentioned solutions and recommendations it is sure that the company can make a proper stand in Indian market and re-establish their operations for ever. 8. CONCLUSION? Conclusion is the important part of a case study. After doing a detailed study on socio-cultural barriers of Coca-Cola in India, the most noticeable factor is the company is not following and considering the social and cultural trend and factors. The main drawback which Coca-Cola is facing is it is going against surroundings or exploiting environment.The company is using fresh water in such a large quantity where there is a crisis for fresh intoxication water apart from that, due to its waste discharge they have been go wrong the water and soil. Therefore farmers are facing numerous problems with their crops. Because of these reasons Coca-Cola is facing problems in India. These problems are indirectly affecting the life of the people staying near by to the manufacturing plant. Apart from this culture is the most important factor which company should keep in mind for further development.?From the above given recommendation, suggestions and analysis, it is clear that the cultural and economic conditions in India is stable and favorable for the company, but the environmental problems are making g issues among the public and government. Therefore, as suggested, the company should employ an efficacious corporate social responsibility team to monitor their operations in the Indian sub-continent and make policies to overcome any such instances. With the help of these suggestions, Coca-Cola can make a brilliant come back to the market. . REFERENCES? 1. Robert Tannenbaum and Warren H. Schmidt, The continuum of leading Behavior. online Available at http//www. stewart-associates. co. uk/leadership-models. aspx Accessed on eleventh January 2011? 2. PETER B. SMITH, MARK F. PETERSON and SHALOM H. SCHWARTZ, 2002. heathenish VALUES, SOURCES OF GUIDANCE, AND THEIR RELEVANCE TO MANAGER IAL BEHAVIOR A 47-Nation Study. JOURNAL OF CROSS-CULTURAL PSYCHOLOGY, Vol. 33 No. 2, pp. 188-208? 3. Lothar Katz, 2008. Negotiating International Business India. online Available at http//www. lobalnegotiationresources. com/cou/India. pdf Accessed on 11th January 2011? 4. Detelin S. Elenkov and Ivan M. Manev, 2005. Top Management Leadership and Influence on Innovation The subroutine of Sociocultural Context. Journal of Management, Vol. 31 No. 3, pp. 381-402? 5. Hofstede, G. , 2001. Cultures consequences canvass values, behaviors, institutions, and organizations across nations. Thousand Oaks, CA Sage.? 6. Geert Hofstede, Cultural Dimensions of India, online Available at http//www. geert-hofstede. com/hofstede_india. hypertext markup language Accessed on 11th January 2011? 7. Casestudy. co. in, New Coke A Classic tag Failure, online Available at http//casestudy. co. in/wp-content/uploads/2009/11/Classic_Failure_Coke. pdf Accessed on 10th January 2011? 8. SWAMINATHAN S ANKLESARIA AIYAR, 2001. What makes MNCs quit India. The Times of India, Published on 4th November 2001, online Available at http//timesofindia. indiatimes. com/business/india-business/What-makes-MNCs-quit-India/articleshow/1602986123. cms Accessed on 11th January 2011