It has been illustrated in the case how India’s business environment was directly affected by political, legal, cultural and economic forces. At the time Pepsi was trying to gain an entry into India (1980’s) the culture of the country was predominantly conservative. Indian culture has always been a proponent of using home made products, and choose them over other foreign products. The spinning wheel on the flag of India depicts this very philosophy. Therefore, at that time this concept was embedded into the subconscious of a regular Indian consumer. This can also be seen by the very name of product used to Pepsi at the time ‘Lehar Pepsi’.
Political environment also propagated the same philosophy and therefore the party in power was a conservative political party. Apart from that, pro-socialist political parties were in power at that time and demanded strict regulation of the economy. They enacted strict control measures over foreign organizations so that capitalistic multinational companies should not establish a hold in India. The legal framework of the company was generated from its political stance and stringent laws were in place to ensure protection for local companies. This can be substantiated by “ Pepsi co held 36.89% ownership in the venture, Punjab Agro Industrial Corporation held a 36.11% ownership interest and Voltas India Ltd. 24% ownership interest”. As a result of political, legal and cultural influences the economy was a protected economy and did not allow a free hand to global corporations.
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