Everyone Knows Coca-Cola

869 Words2 Pages
bulb-icon

Recommended: Coca cola globalization strategy

The Coca-Cola Company offers its product, Coke or Coca-Cola Classic, for sale in the beverage industry. Included in the beverage industry are sub-categories such as the soda or soft drink industry. Introduced in 1886, the Coca-Cola Company sought to offer its coke product to the masses. Coke has been successful in winning its market share of the soft drink industry as evidenced by a report that states, "the drink is reportedly recognized by 94 percent of the world's population" (Hartlaub, n.d.). In an expansion of the typical market, Coke took its place in history by becoming the first soft drink to be consumed in outer space (Hartlaub, n.d.). This paper discusses the market structure in which the Coca-Cola product is offered. The different market structures are analyzed and implications of the market for the product are described.

Types of Market Structures

There are four types of market structures: Pure or Perfect Competition, Imperfect or Monopolistic Competition, Oligopoly, and Perfect Monopoly (Reynolds, 2005). Because of the range of strategies adopted by the seller, market structures may evolve from one type to another during the life of the product ("Oligopoly & Monopoly," n.d.).

On one end of the spectrum of optimal market structure is Pure or Perfect Competition. Perfect Competition is defined as:

The theoretical free-market situation in which the following conditions are met: (1) buyers and sellers are too numerous and too small to have any degree of individual control over prices, (2) all buyers and sellers seek to maximize their profit (income), (3) buyers and seller can freely enter or leave the market, (4) all buyers and sellers have access to information regarding availability, prices, and quality of g...

... middle of paper ...

...Soft Drink (CSD) industry have shifted the focus to healthier drink alternatives and are forcing companies to diversify into different products. The Coca-Cola Company has found a niche in the market with the original Coke product and any changes to the product line will be secondary to the primary focus. A recent report in Forbes Magazine states,

Just two of its brands, Coke and Diet Coke, together command almost 27% of the U.S. CSD market. All its brands together control 42% of the CSD volumes in the U.S. while PepsiCo holds 28% share in the U.S. Moreover, Coca-Cola has also strengthened its grip on emerging markets such as China and India. The company holds more than 15% and 54% of the CSD market in China and India respectively. (Trefis Team, 2013)

The Coca-Cola Company is operating as a differentiated Oligopoly and is gaining strength in foreign markets.

Show More
Related

  • Credit Unions And The Financial Market

    1095 Words  | 3 Pages

    Market structure is classified according to the degree of competition firms encounter in their industry (Baker College, 2016). There are four main market structures: pure competition, monopolistic competition, oligopoly and a pure monopoly. Pure competition is where fir...

    Read More

  • Dr. Pepper/Seven Up, Inc.

    1741 Words  | 4 Pages

    The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.

    Read More

  • The Coca-Cola Company

    1080 Words  | 3 Pages

    The Coca-Cola Company - American multinational corporation operates in a nonalcoholic segment of Beverage Industry. The history of the industry goes back to the 17th century, when the first marketed soft drink came to the Western Market.

    Read More

  • Australian Airline Oligopoly

    2191 Words  | 5 Pages

    Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.

    Read More

  • Monopoly Vs Monopoly Essay

    1263 Words  | 3 Pages

    A perfect competition and a monopoly are two very different and unique market structures. Under monopolies firms get normal profits only in the short period, but disappears in the long run. Monopolies come with strong barriers to enter and exit the market. Under a monopoly, a monopolist can charge different prices and no one can complain because everything is being ran by one big business. In a monopoly the average revenue curve slopes downward, and the demand curve is very inelastic. Both monopolies and perfect competitions want to maximize profits, although monopolistic prices are usually higher. A pure monopoly is rare like a perfectly competitive market, but there are elements of monopolies in some markets. In this paper I will go into detail about both of these markets.

    Read More

  • Comcast Price Discrimination

    1965 Words  | 4 Pages

    Firms may be categorized in a variety of different market structures. Perfectly competitive, monopolistically competitive, oligopolistic,

    Read More

  • The Coca-Cola Industry

    1753 Words  | 4 Pages

    The CSD (carbonated soft drink) industry is one that is very competitive. A few firms dominate this industry, most notably Coca Cola and Pepsi Cola. This is due to substantial barriers to entry. Cadbury-Schweppes, producer of products such as 7up and Dr. Pepper is the third leading company in this industry. Due to the dominance of Coca Cola and Pepsi, Cadbury-Schweppes faces the daunting task of having to fight for market share and survive in this fiercely competitive industry. Using economic analysis for support, Cadbury-Schweppes will need to use its strengths in the non-cola categories to compete in this CSD industry.

    Read More

  • Perfect Competition And Real Estate Agencies

    1355 Words  | 3 Pages

    A perfectly competitive market is based on a model of perfect competition. For a market to fall under this model it must have a number of firms, homogeneous products, and easy exit and entry levels into the market (McTaggart, 1992).

    Read More

  • The Existence of a Monopoly and Public Interest

    1027 Words  | 3 Pages

    In this market structure it is also assumed profits are maximised and there is consumer rationality. Traditionally monopoly is thought to be a potentially harmful market structure with unwelcome consequences for the consumer and the economy. Competition has always therefore been seen to be desirable. It could be said therefore to be against the public interest. However there are arguments not only against monopolies but also for their existence.

    Read More

  • Trends Of Coca Cola

    857 Words  | 2 Pages

    Learning from experience Coca-Cola has had some fierce competition over the years but nothing in the form of an entire health market shift like now. As well as mounting political persecution of its products like they are facing today. They must rely on past experiences to get through but likely will need to start studying the new trends to stay relevant.

    Read More

  • Market Structure

    1452 Words  | 3 Pages

    This is a very important market structure, where there are a large number of firms, all of them fairly small compared to the size of the total market and it’s easy for new firms to join or leave the industry as the barriers are low. The perfect competition is a market where all firms produce a homogeneous product, in other words, the products are identical, and there is no advantage for existing firms, as every producer competes on equal terms. In the assumption of perfect competition, there are lots of buyers and sellers, an ample market knowledge and prices are determinate by supply and demand.

    Read More

  • Compare And Contrast The Four Market Structures

    1100 Words  | 3 Pages

    The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).

    Read More

  • Phone Industry Analysis falls to Oligopoly Structure

    1777 Words  | 4 Pages

    Market structure is when an industry has a number of firms making identical products. An industry’s market structure depends on the how many firms are in that in industry and how they will compete in the market. We can focus on those specific factors that will affect how it will change competition and also price. The types of market structure include oligopolies, monopolies, perfect competition and monopolistic competition.

    Read More

  • Case Study on Coke versus Pepsi

    1064 Words  | 3 Pages

    The case study "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century" focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi products which target similar groups of customers, and how these companies have had and still have great reputation and continue to take risks due to their high capital. This analysis of the Cola Wars Continue case study will focus mainly on the profitability of the industry by carefully considering and analyzing the below questions. Why is the soft drink industry so profitable? Compare the economics of the concentrate business to the bottling business: Why is the profitability so different?

    Read More

  • Case Study: Monopolistic Competition

    886 Words  | 2 Pages

    1) There are three market types known as Perfect Competition, Monopolistic Competition, and Monopoly. In the market structure of Perfect Competition there is a large number of producers that produce standardized objects, but they have no power, low barriers to entry, and have a lot of competition. Moreover, the market structure of Monopolistic Competition also has a large number of producers and low barriers to entry, like “Perfect Competition”. Nonetheless, the product is differentiated, so therefore they have some power, and competition.

    Read More

More about Everyone Knows Coca-Cola

Open Document