After 1991, when the Indian economy

After 1991, when the Indian economy began opening up to foreign investments,


many multinational corporations rushed in, lured by the attraction of serving a large middle class, estimated at 300 million. However even some of the well-known global brands failed with their initial strategies and were forced to reposition, taking steps including, in some cases, drastic price reductions. Some multinational corporations (e.g.,Peugeot) even had to close shop. Kellogg’s, which entered with high-priced cereals (which were several times more expensive than traditional Indian breakfasts), faced a lack of demand. KFC initially failed to realize that Indians were repulsed by chicken skin, without which the Colonel’s secret batter would not stick to the chicken. Thus, apart from a lack of understanding regarding local tastes, a combination of circumstances including over estimation of potential demand, inability to overcome bureaucratic hurdles to doing business, infrastructural inadequacies, and inappropriately rigid strategies (e.g., pricing) led to many failures and disappointments.