ADAPTATION IN GENERAL BUSINESS Adaptation is the “adjustment to environmental conditions.”Adaptation entails a process of knowledge acquisition and experience that enables the firms to evaluate the risks and opportunities. Adaptation occurs at two levels: MACRO - that represents the adaptation of the firm to its external environment MICRO - that represents the internal adaptation of the firm’s processes, tasks, routines, structures INTERNATIONAL ENVIRONMENTAL ADAPATION BY MULTINATIONAL BUSINESS Multinational companies (companies that compete in more than one country), in their aim to develop their business practices, increase profitability and overcome any problems related with the saturation of existing markets, expand their operations to overseas markets. The MNCs are exposed to a multitude of international environment from which they depend for essential resources, clients, financial resources, and broad wealth of inputs. Moreover, MNCs operating in foreign environments face a liability of foreignnes, that accrues from the lack of knowledge and insufficient adaptation to the environment. As such, the MNCs face a set of constraints that differ from those of purely domestic firms. Firms ‘successis depend on the environment surrounding it and how well the firm deal with that environment or change that environment. When firms enter in international business it face different environmental aspects of different countries like r ules defined by the political , social, legal and economic institution etc. In order to become successful MNCs must comply with the rules, norms and behaviours set forth by the institution of that place where it operate. Environmental changes and specifically how firms respond to these changes, causes variation. Firms are selected in or out, depending (at least partly) on their pool of capabilities and resources that permits them to perform given the environment. Only those best fitted should survive, being retained –it is likely that the best performers develop a set of new resources and capabilities that renders them an idiosyncratic competitive position To adapt to the International Business Environment , the multinational corporations need to engage in: Systematic collection of information on all environmental dimensions and the economic agents in the local markets. Processing this information to enhance environment knowledge. Identification of the more vulnerable internal areas and external opportunities towards a better environmental fit. Implementation of the “best practices” more adjusted to the identified environment .
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Adaptation is the “adjustment to environmental conditions.”Adaptation entails a process of
knowledge acquisition and experience that enables the firms to evaluate the risks and
opportunities. Adaptation occurs at two levels:
MACRO - that represents the adaptation of the firm to its external environment
MICRO - that represents the internal adaptation of the firm’s processes, tasks, routines,
structures
INTERNATIONAL ENVIRONMENTAL ADAPATION BY MULTINATIONAL BUSINESS
Multinational companies (companies that compete in more than one country), in their aim to
develop their business practices, increase profitability and overcome any problems related with
the saturation of existing markets, expand their operations to overseas markets. The MNCs are
exposed to a multitude of international environment from which they depend for essentialresources, clients, financial resources, and broad wealth of inputs. Moreover, MNCs operating
in foreign environments face a liability of foreignnes, that accrues from the lack of knowledge
and insufficient adaptation to the environment. As such, the MNCs face a set of constraints that
differ from those of purely domestic firms.
Firms ‘success is depend on the environment surrounding it and how well the firm deal with
that environment or change that environment. When firms enter in international business it
face different environmental aspects of different countries like rules defined by the political ,
social, legal and economic institution etc. In order to become successful MNCs must comply
with the rules, norms and behaviours set forth by the institution of that place where it operate.
Environmental changes and specifically how firms respond to these changes, causes variation.
Firms are selected in or out, depending (at least partly) on their pool of capabilities and
resources that permits them to perform given the environment. Only those best fitted should
survive, being retained – it is likely that the best performers develop a set of new resources and
capabilities that renders them an idiosyncratic competitive position To adapt to the
International Business Environment , the multinational corporations need to engage in:
Systematic collection of information on all environmental dimensions and
the economic agents in the local markets. Processing this information to enhance environment knowledge.
Identification of the more vulnerable internal areas and external opportunities
towards a better environmental fit.
Implementation of the “best practices” more adjusted to the identified environment.
Each International Business Environment dimension is likely to have a somewhat diverse impact
on the MNC’s adaptive strategies . Each dimension imposes a different set of opportunities,
threats, challenges, and constraints. For example, if cultural diversity is considered a threat
when operating in a foreign IBE, the MNC is likely to prefer having a high content of local
citizens in their organization chart, occupying executive roles. But, if the political risk proves tobe dominant, a set of alliances and interlocking directorates with public officials may hedge
against potential hazards. Similarly, if the income profiles of the countries are significantly
diverse the adequate strategy may be to adapt the product to fit into the local habits and
incomes or positioning the product in a specific market segment. The exchange rate threat may
be best overcome through the internal practice of transfer prices and local (or external)
supplies. Thus the IBE dimensions are not static; they co-evolve to embed the simultaneous
evolution of firms and exogenous environments (local and international).
PepsiCo serves 200 countries and is a world leader in providing food and beverage products. Its
brands consist of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo
International and Quaker Foods North America. Some of PepsiCo's brands are over 100 years
old, however the company was only founded in 1965 when Pepsi-Cola merged with Frito-Lay.
PepsiCo then attained Tropicana and Gatorade when they merged with the Quaker OatsCompany. The combined retail sales average about $92 billion. The company is focused on
being the premier producer in supplying the world with convienient foods. They offer a wide
variety a food options as well, including healthy options.
PepsiCo stands out as a company because of its sustainable advantage. It includes widely
known brands, innovative products, and powerful market skills. The company also tries to
benefit the community. To make themselves a sustainable company, they have put a focus on
the environment and benefiting society with their business. Recently, PepsiCo released
information of their plan to drive sustainable water practices and improve rural water in Africa,
China,India and Brazil.
Public Relations people have great opportunities to improve the company's reputation because
of the size and financial stability of the company. PepsiCo is extremely well known in the world
as a leading source of food and beverage products with immense revenue. The challenge for
the Public Relations people is that if something negative were to effect PepsiCo it would put a
damper on all of the products that the company makes. Therefore, the PR people would have a
lot of crisis management in their hands.
PepsiCo, Inc. is an American Fortune 500 company headquartered in Purchase, New York.
Founded in Chicago. It offers over 80 products worldwide, including local variations in the
different countries of operation. PepsiCo owns five different food and beverage brands: Frito-
Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade. A complete profile of PepsiCo’s products is
presented in Figure2.Given the wide range of products under PepsiCo’s food and beverage
brands, this paper narrows its evaluation to environmental management of PepsiCo’s beverage
products in India.
PepsiCo entered India in 1989 by a joint venture (JV) with the Punjab-government-owned
Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. In 1994, Pepsi ultimatelybought out its partners, becoming a fully owned subsidiary and ending the joint venture (Kaye,
2004). The company’s beverage portfolio in India consists of carbonated and non-carbonated
drinks and packaged mineral water. The iconic beverages such as Pepsi, Mountain Dew, 7 Up,
and Mirinda fall under the soft drinks (carbonated) segment. PepsiCo’s non-carbonated
segment broadly consists of sports drinks (Gatorade), fruit juices (Tropicana), and hydrating
When PEPSI CO enterd india it had to follow many rules and regulation of government
of India llike they changed their name from pepsi cola to lehar pepsi because it is a
foreign brand and they have to change the name of their different brand.
In 1988, the New York office of the President of the multi-billion cola company PepsiCoreceived a letter from India.The company had been trying for some time to enter the
Indian market - without much success.The letter was written by George Fernandes
(Fernandes), The General Secretary of one of the country's leading political parties,
Janata Dal.
“I learned that you are coming here. I am the one that threw Coca-Cola out, and we
are soon going to come back into the government. If you come into the country, you
have to remember that the same fate awaits you as Coca-Cola."
George Fernandes
The General Secretary–
Janta Dal (- A New Internationalist Magazine Article,commenting on Pepsi's struggle to enter India, in August 1988)
Pepsi make its proposal attractive to the Indian government through their Objectives –
Focus on food & agro-processing
Only 25% investment for Soft drink
Bring advanced food processing technology
Boost image of Made in India to Foreign Market
In August 2003, an environmental group in India claimed that both Coke and Pepsi had highlevels of pesticide residue in their products. New Delhi’s Center for Science and the
Environment tested samples of both products and reported, “each sample has enough
poison to cause… cancer, damage to the nervous and reproductive systems… and disruption
of the immune system. the Indians started to stage protests against the companies that
resulted in partial bans across the nation. Local politicians began to immediately attack
their brands, making the people doubt the brands even more. Eventually, both companies’
products were banned from being sold in government offices, schools and hospitals.
Pepsi attempted to ease the people’s minds by staying quiet until all their research had
been properly administered and interpreted. After sometime to deal with this situation
Pepsi began a public relations offensive that claimed, “Pepsi is one of the safest beverages
you can drink today.” and said that there were pesticides in Pepsi but it was the same
amount that could be found in any other product produced in India. In research it is
found that the sample was 24 times above the general standard finalized by the bureau of
It joined with Godrej an Indian company .Pepsi ‘s willingness to do exactly as india wanted
has proving to be very beneficial for the company Pepsi is now also involved in
countertrade in india , which has helped them to develop their business in india .
CULTURAL ADAPTATION –
At the time of navratri pepsi has sponsored big , popular dance competition called garba
dances to boost their sales. They team up with zee alpha,a popular T.V channel
amongst the gujarati, to broadcast the navratri festival.
C ricket is very popular in india pepsi take advantage of it. It has run very successful
campaigns with cricket, especially the one day series.
Pepsi take advantage of Indian cultural festivals to promote their product.
SOCIAL ADAPTATION-
In India a region that faces severe water shortages , an agriculture process called DIRECT
SEEEDLING of rice introduced by pepsico helps growers avoid three water intensive
steps- puddling, transplanting, standing water. After successful trials with direct seeding
in pepsi co’s R&D fields, the company has developed a direct seeding machine for its
farmers. In 2010 pepsico expanded direct seeding and applied it to approximately 10000
acres, saving more than 7 billion litres of water . there is also a 70% reduction of greenhouse emission.
In consultation with local govt. pepsico introduced lass water intensive citrus plantation
for farmers as an alternative to pady and set up two fruit processing plants in the
region.
CAP Foundation- Partner in training and provide alternate livelihood options for
Tsunami affected communities in Andhra Pradesh and Tamil Nadu.
Project Healing Touch Partner in Mission Vijay – Programme to provide ex-servicemen
with sustainable livelihoods
PepsiCo India – Akshay Patra Partnership PepsiCo India has partnered with AkshayaPatra, an NGO that supports the "Mid-day meal" program launched by Government of
India feeding over 1.4 million underprivileged students every day of the school year, in
20 locations, across 9 states in India
It extended it contracts farming initiatives to groundnuts in the year 2000
In the 1890s, William Hesketh Lever, founder of Lever Bros and later Lord Leverhulme, wrote
down his ideas for Sunlight Soap – his revolutionary new product that helped popularize
cleanliness and hygiene in Victorian England. “It was toward make cleanliness commonplace; to
lessen work for women; to foster health and contribute to personal attractiveness, that life may
be more enjoyable and rewarding for the people who use our products (Unilever CompanyWebsite, 2008)”.
Founded in 1930 and based in United Kingdom, Unilever is one of the world’s leading suppliers
of fast moving consumer goods across Foods and Home and Personal Care categories.
Unilever’s portfolio includes some of the world’s best known and most loved brands. The group
operates worldwide and employs 174,000 people in 316 companies by the time of writing
(Unilever Financial Report,).
Since it was founded, Unilever established new business in several countries, such as United
Kingdom, Germany, Spain, USA, Argentina, Turkey, Netherlands, Canada, China, South Africa,Italy, Sweden, Brazil, Russia, and Czech Republic and operated its own production factory in 158
strategic locations in those countries. For competing in foreign market, Unilever owned 316
subsidiaries worldwide and until 2008, Unilever has launched about 900 different brands.
Several key facts of Unilever Group can be shown in the Table1 below.
The Unilever Group manufactures a wide range of consumer products including packaged food,
weight management products, personal and household care. It splits its business activities intotwo divisions, Foods and Home & Personal Care: the cosmetics and toiletries business comes
under the Personal Care subdivision, its largest in terms of revenue generation.
The diversity of Unilever’s cosmetics and toiletries portfolio, which encompasses some of the
world’s leading brands such as Rexona, Dove and Axe/Lynx/Ego, contributes to its success in the
global market. The company also owns a number of successful regional brands such as
largest cosmetics company. Nestlé history begins back in 1866, when the first European
condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk
Company. In Vevey, Switzerland, Nestlé founder by Henri Nestlé, a German pharmacist,
launched his Farine lactee, a combination of cow’s milk, wheat flour and sugar, saving the life of
a neighbour’s child. Nutrition has been the cornerstone of the company ever since. In 1905, TheAnglo-Swiss Condensed Milk Company, founded by Americans Charles and George Page,
merged with Nestlé after a couple of decades as fierce competitors to form the Nestlé and
Anglo-Swiss Milk Company. The company grew significantly during the First World War and
again following the Second World War, expanding its offerings beyond its early condensed milk
and infant formula products. In 2011, Nestlé was listed No.1 in the Fortune Global 500 as the
world’s most profitable corporation. The Nestlé Corporate Business Principles are at the basis
of the company’s culture, developed over 140 years, which reflects the ideas of fairness,
honesty and long-term thinking. Nestlé believes that not only possible to create long-term
value for their shareholders if their behaviour strategies and operations also create value for
the communities where they operate, for their business partners and of course, for their
consumers.
Nestlé vision is to meet the various needs of the consumer everyday by marketing and
selling foods of a consistently high quality. Their objectives are to deliver the very best quality in
everything they do, from primary produce, choices of suppliers and transport, to recipes and
packaging materials.
Their mission is they strive to bring consumers foods that are safe, of high quality and
provide optimal nutrient to meet physiological needs. Nestlé helps provide selections for allindividual taste and lifestyle preferences.
Nestlé purpose is to offer safe, tasty, convenient and nutritious foods to improve health
and well-being of consumers of all ages all over the world. To meet the needs and desires of
today’s and tomorrow’s consumers, Nestlé is strongly committed to Research and Development
(R&D) to improve products and develop new foods with specific health benefits (Nestlé.com,
2012).
NESTLE INDIA
Nestlé's relationship with India dates back to 1912, when it began trading as The Nestlé Anglo-
Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the
Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the
country. It has a broad based presence in the foods sector with leading market shares in instant
coffee, infant foods, milk products and noodles. It has also strengthened its presence in
chocolates, confectioneries and other semi processed food products during the last few years.
The company has launched Dairy Products like UHT Milk, Butter and Curd and also venturedinto the mineral water segment in 2001. Nestle’s leading br ands include Cerelac, Nestum,
Nescafe, Maggie, Kitkat, Munch and Pure Life.
ENVIRONMENTAL ADAPTATION BY NESTLE IN INDIA
POLITICAL ADAPTATION-
After India's independence in 1947, the economic policies of the Indian Government
emphasised the need for local production. Nestlé responded to India's aspirations byforming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted Nestlé to develop the milk economy.
For almost two decades there was no new additions of manufacturing facilities due to
restrictive policy environment after establishment of moga factory and another factory
in Tamil nadu.
Nestle India’s operations were restricted to importing and trading of condensed milk
and infant food.
In 1978, the company issued shares to the Indian public to rreduce its foreign holdings
to 40%.
According nestle ‘s business principle- nestle continues its commitment to follow and
respect all applicable local laws in each of its subsidiary.
CULTURE ADAPTATION-
In Indian value system, “health is wealth” and it is a synonym of wellness in ithe food. It
means of eating food from whole grains, which provides nutritional benefits such as
vitamins, mineral and fibres. NESTLE india got positive feedback from consumers by
They worked on same platform .they acknowledged Indian definition of health and to
match itself with that in their new variant nestle offered whole wheat and vegetable
that give nutrition equivalent to three rotis
Across most of the world, nestle ‘s magi is known best as a soups and sauces brand. Inindia it has become the generic word for instant noodles. The product sold in india,
though beans little resemblance to the ramen of east india. It was introduced in 1982
with a masala flavoring and over the next 25 years, nestle continued to launch variants
that would appeal to local and regional tastes. Of course, they were’t all equally
successful, and the masala variant continues to be maggi’s best seller
SOCIAL ADAPTATION-
Nestle dairy development heritage in India began humbly in Moga on 15 November1961, collecting only 511 kgs of milk on first day. Today Moga factory collects over 1.3
million kgs of milk per day during the flush season, with over 110,000 farmers in India
selling milk to Nestlé.
Nestle milk collection area has expanded over the years and today covers 30,000
square kilometers. They have also constructed 2,815 milk collection centres in villages
across the country to facilitate its considerable daily milk collection.
Nestlé’s approach to rural development aims at ensuring thriving farmers and thrivingcommunities while respecting natural capital. We work at both a farm and community
level to improve yields, safeguard incomes, contribute investment and make a
difference to people’s quality of life.
The dairy industry is an important factor in rural economies. its work with Indian dairy
farmers continues to grow through sustainable relationships of shared value.
T hrough the NESCAFÉ Plan, we bring together Nestlé’s pledge to sustainable coffee
farming, production and consumption under one leaf.
In those cases where the required agricultureal raw materials are not exist, but the
natural production condition exist,it encourage local production and provide assistance
for cultivation and dairy farm management.
Nestle India is allying with National Diabetes, Obesity and Cholesterol (NDOC)
Foundation to study the specifics and patterns of diabetes prevalence in the country. Dr
Mcdonald is the world famous fast food restaurant.The idea of mcdonald’s was introduced by
two brothers Mac (Maurice) and Dick (Richard) Mcdonald in California.their father Patrick
Mcdonald in 1937 was having a hot dog cottage called as Airdrome restaurant near the
airport.In 1940 the restaurant was renamed as Mcdonald’s Famous Barbeque.In 1940 bothbrothers came to a conclusion that most of their profit comes from selling hamburger so they
made their menu very simple by selling only Hamberger,cheeseburger,soft drinks French fries
and apple pie.in 1954 a turning point came in mcdonald’s brother history.Ray kroc a seller of
Multimixer milkshake visited mcdonald and he liked the idea of mcdonald. Mcdonalds
corporation was build in those times and as a result kroc started expanding their business by
opening franchises for mcdonalds.1960 mcdonald’s advertising campaign “look for the golden
arches” gave mcdonald’s sale a big boost.1965 mcdonald corporation went public.in 1968
mcdonal open its 1000th restaurant.1974 mcdonalds started their business in UK and
Newzealand.in 1980 mcdonalds was facing very big competition from its rival Burger King and
Wendy but mcdonald with its innovation was experiencing boost in its sales.in early and mid
ninties mcdonalds was having decline in their sales and as a result they start improving their
business.taste was improved and some new menu items were introduced.Mcdonald introduced
first Kosher Mcdonald in Jurusalam and Halal mcdonalds in india(1995 and 1996
respectively).mcdonald start creating healthy image and invested heavily on refurbishment in
2000’s.today mcdonald’s has more than 33000 outlets and is operating in 125 countries.it is the
world leading brand in fast food.
Mcdonald started their business in india in 1996.they start their business in india’s
capital New delhi.they choose a busy residential area Vasant Vihar.Mcdonald India is 50-50partnership between Mcdonald USA corporation and Two Indians (Amit Jatia Hardcastle
Restaurant ltd Mumbai and Vikram Bakshi Cannaught plaza restaurant Delhi).Mcdonald as of
To increase awareness for an active and healthy lifestyle . they has sponsored several
sports related activities like Olympic day run.
It involves in many community related programs like mc donalds spotlight which is an
annual interschool performing arts competition
They has been participating in world children day on nov. 20. Since india has alreadyben celebrated children’s day on nov 14. So they link these two days in india and create
world children week. It celebrates from 14 to 20 nov in restaurant of india.
Mc donalds in Mumbai is known as the blue dot initiative that support education
programs for the girl child.
They working towards improving the status of girl child in india.
They also take part in pulse polio program.
CULTURAL ADAPTATION
A significant number of Indians are vegetarian by choice or for religious reasons,
McDonald's took note of that as far back as 1990, when it began establishing local
supplier partners, six years before it opened its first restaurant in India. Working on its
first no-beef, no-pork menu,
The company ensured that suppliers respected the beliefs of its future customers.
Vegetarian products are prepared with dedicated equipment and utensils and, in some
cases, by a separate workforce. All food is cooked in vegetable oil, and the mayonnaise
and other sauces do not contain egg (considered a non-vegetarian food).
"We understand Indian culture because we were born in it," says Vikram Bakshi,
managing director and joint venture partner, McDonald's India (North and East).
"Physical separation of vegetarian and non-vegetarian products is maintained right from
the farm to the customer."
In the last 50 years, the chain has opened more than 30,000 restaurants in 120 countries
(155 in India), adapting its menu and operations to complement existing eating-out
options. India’s majority hindus rever cows as sacred and 150 million of Indian muslims
do not eat pork, beef. Therefore the iconic all-beef Big Mac has been replaced by the
mutton and chicken Maharaja Mac in India.
McDonald's, stuck to eggless mayonnaise and sauces. Even its trademark chicken dishes
were given a local flavor with the use of Indian spices and cooking techniques.
75% menu available in mc donalds in india is indianized like aloo tikkie burger,mc spicy