The goal of any business is to maximize the profits or provide the maximum utilization of resources to allow a firm to increase the stock prices. Doing business in one’s own country or local area is a different ball game altogether. The local laws are different and the local policies and import and export law are different. The tax exemptions and brackets are different and based upon the growth in a company, expansion is a viable option. But, due to the trade laws and taxes in some countries, the current business model that the company follows changes, or has to change accordingly to incorporate the changes that occur in the structure of the functions of the company. Entering a new market has its own challenges along with benefits.
Pepsico an American company entered the indian market in 1989, But unfortunately the company faced a lot of criticism regarding the quality of their products. In 2003,The center for science and environment of India claimed that the water which pepsico was using for making beverages and their cola products contained pesticides and harmful toxins which can cause stomach cancer.Although,Pepsico denied the allegations of being unsafe.
If i was the CEO of pepsico i would do a deep research of the market to trade services. This, combined with research relating to competition and market trend the business operates in. This would require a complete restructuring process which would take a considerable amount of time and planning combined with analytics from the market, finances, laws, taxes, currency conversion and judiciary values. A company’s existing structural policies and changes that are brought about by the inclusion of the new rules which need to be created to allow the company to function in any foreign economy. Following such changes, a company can monetize their gain and maximize their financial gains .
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