New Delhi: PepsiCo’s Indian arm is going back to school.
In an attempt to expand the beverages market in India, PepsiCo India Holdings Pvt. Ltd has turned to business schools here in search of ideas and strategies.
On Tuesday, the company will launch a contest inviting business strategies from 10 top business schools in the country. The focus? Creating more demand for beverages in the country. “This is the first time we are co-opting students in India on business strategy,” says Pavan Bhatia, executive director, human resources, PepsiCo India.
Pepsi is privately held in India and information on its revenues and sales are not publicly available.
However, per capital consumption of soda drinks (or carbonated beverages) of the kind Pepsi makes are only eight servings per person in India, compared with, say, 100 servings in China and 500 servings in the US. Each serving is made up of eight ounces.
“Despite a booming economy, young consumers and growing levels of disposable income, the per capita consumption of branded beverages remains very low in India, compared to both emerging markets and the developed world,” Bhatia says, adding, “through this contest, we hope to gather innovative ideas on how to push our penetration in the market.”
The company says that it will, through these contests, also try and identify the barriers restricting beverage consumption in India and the categories PepsiCo should focus on. “Our products fall under the impulse purchase category, and we need to find out how we can prompt more and more consumers to buy our products,” Bhatia says.
The contest is open to all full-time students at the Indian Institutes of Management (IIMs) at Ahmedabad, Bangalore, Kolkata, Lucknow and Indore; the Faculty of Management Studies, Delhi; XLRI, Jamshedpur; and Jamnalal Bajaj Institute of Management Studies, Management Development Institute and Symbiosis Institute of Business Management. Each team of three students will be asked to prepare a business strategy after reading case studies and data on international and Indian beverage market provided by PepsiCo.
A jury comprising Pepsico India CEO Sanjeev Chadha and chief financial officer Vinod Rao, Saurabh Srivastava, founder, Indian Angel Network & founder member, The Indus Entrepreneurs (TiE), and J.K. Mitra, dean, Faculty of Management Studies, will select the best three case studies. The winning team will be flown to New York to present their case study to Indra Nooyi, chief executive officer, PepsiCo Inc.
Nooyi herself is an alumnus of IIM, Calcutta.
“If the business strategy is found feasible, it might get implemented at PepsiCo,” says Bhatia.
The top two teams will also will get cash prizes of Rs1 lakh and Rs50,000, respectively.
Audit firm KPMG’s director Mazyar Kotwal says such contests allow companies to bring in a fresh perspective in an inexpensive way. “It’s a sensible strategy for PepsiCo to look at ways to drive growth, especially when cola players cannot expect significant growth in the carbonated drinks category given growing health concerns,” Kotwal adds.
Such contests give students the opportunity to use their theoretical knowledge in real business situations. “It works both ways,” says Arjun Shetty, a second year student at IIM, Ahmedabad.
“It provides students with a platform to apply their knowledge in a live situation and such interfaces give companies good branding opportunity and get new innovative ideas,” he adds.
Apart from recognizing and rewarding case studies, Pepsico plans to hire, too, from this pool.
Bhatia says all the 18 shortlisted students (six finalist teams) will be called for interviews directly without any other screening. “It is an interesting way of getting smart people on board,” says Kotwal.