Coke Imperialism

1570 Words 7 Pages
On August 5, 2003, Coca Cola – the leading manufacturer, marketer and distributor of non – alcoholic beverages was faced with a grimed situation as CSE (The centre for science and the environment) issued a vilifying report against 12 major cold drink brands. The report stated that these brands sold near Delhi contained fatal pesticide residues. Apart from this, it was also alleged that the company was extracting water from ground water sources which led to water shortages, it was discharging harmful pollutants into fields and rivers which included the Ganges, and moreover it was selling toxic wastes as fertilizers which further polluted the soil and water table deeming the water unfit for consumption.
The CSE accusations was based on tests
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Conversely, the Coke products sold in the United States were ‘pesticide free’.
Coke is extremely popular in India accounting for 60 percent of the $1.6 billion soft drink market in India. However, despite this popularity, it is often viewed as a symbol of Western Culture Imperialism.
Consequently, this lead to the banning of Pepsi and Coca Cola products in Parliament by the Indian Government and several schools soon followed suit. In addition, the State government also sent several samples of the products to labs for testing. Coca Cola questioned the testing methods arguing that it was flawed. The dispute lasted for three
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The report, however, adversely affected customers trust in the company and this may enable competitors, like Dr. Pepper Snapple Group and Nestle S.A., to take advantage of the situation and increase their market share by acquiring the customers of Coke and Pepsico.
Threat of new entrants: The fall in the company’s image can also attract new competitors in entering the soft-drink market. The share of Coke and PepsiCo in the soft drink market in India is approximately 38% and 31% which together accounts for almost 70% of the entire soft drink market. The loss in customer loyalty would lead to a huge number of customers switching to other soft drink brands.
Threat of Substitutes: Apart from the soft-drink market, there are other brands like Gatorade and Rasna that have been competing with Coca-Cola in the beverage industry. Thus, Customers may swtich over to these brands or decide to switch to sports or power

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