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: There is a new fizz at Pepsi in India. Four years after Rajeev Bakshi took over the baton of leadership from PM Suman Sinha and four years after India-born Indra Krishnamurthy Nooyi became the president and CFO of PepsiCo (worldwide), the India operations of the $ 27 billion transnational corporation has been in the throes of a riveting transformation. Propelled by changing and continuous dynamics of the market as well the huge potential that the Indian market will throw up, the reinvention of Pepsi in India has five critical components: coping with extreme challenges, restructuring the organisation to handle these, creating the right team, increasing the share of awareness of India in the Pepsi system worldwide and managing the needs of stepping up the importance of the snack foods business.
Managing extreme challenges
Traditionally, ever since its inception Pepsi in India has faced major challenges. But in the last four years, the intensity of the challenge has taken many new dimensions: the competitive environment, managing government and judicial activism and also the resultant consumer reaction to some of these. But the problem was that in each of these, the company had to adopt very different tactics and techniques. But in managing these, there was a twin internal challenge: while battling the external forces, the company also had to insulate the organisation and keep the manufacturing and marketing thrust going.
Market changes
In the past, when both Coca Cola India and Pepsi entered the Indian soft drink market, it was was polarised between two categories: the lime-lemon and the colas, where between these two, there was a concentration of about 70-80 per cent of the entire sales. Resultantly, a company like Pepsi focused initially largely on brand Pepsi. That also created a uni-dimensional organisational structure. It also meant that companies wanted to tap into the larger market base at the bottom of the pyramid. In recent times, Rajeev Bakshi, chairman, Pepsi India however takes a stance quite contrary to current popular strategies that companies are adopting. Says Mr Bakshi, “Today, the question is: are you tapping into the right opportunity? I met up with CK Prahalad (who advocates tapping the bottom of the pyramid) about ten days back. He is buying the perspective now. The five rupee strategy is out of the window. What it did essentially was to add new consumers and the rate of accretion of new consumers...
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