I am not sure how to make my assignment for a supplier to my business (Coca-Cola

Question

I am not sure how to make my assignment for a supplier to my business (Coca-Cola). Let me know if you need any clarification.

"Presuming you have completed assignments 1, 2 and 4 (if not go do those first) do one of those assignments for a supplier to your business. Remember a couple of things.

Your business (and others like it) is now the consumer. That means questions about consumer income is now a question about your business' income. A question about consumer preferences is now a question about your business' preferences for what the supplier provides.

This is not about supply, but how a supplier to your business sees things. It is still about demand, price elasticity of demand, and market structure."

I will be using Assignment 4 Market Structure for this:

1. The Coca-Cola Company was incorporated in May,1881, around 131 years ago. The company is famous with its product named as Coca-Cola, a carbonated drink. The company has experienced monopoly for a long period of time in the 20th century. But now due to intense competition, it has lost its monopoly. It still holds a major share in the beverages industry. The Coca-Cola company has marked its presence with “Coke” across the world with its strong distribution channel.

2. There are many businesses in the country who entered this Industry due to the lucrative margins. Pepsi is the strongest competitor for Coke. Apart from Pepsi, Red Bull, Fanta, Sprite, Dr. Pepper, Mountain Dew, Lipton and many more hold fractions of market share.

3. Looking at the present scenario of the beverages industry, there is already intense rivalry in the industry. Entering this Industry will be very difficult and even if enters, it will be very difficult to survive in the Industry which consists of big players like Coca-Cola & Pepsi. There are barriers to entry like the distribution channel, the suppliers etc. which is very strong for big firms.

4. Coca-Cola mainly produces carbonated soft drinks. It ranges from Classic Coke to diet Coke, Coca-cola cherry, Coca-cola Zero and many more. It is somewhat identical to the other Industry products, but it has maintained a unique flavor which none of the other companies in the industry can imitate.

5. The was a big case between Pepsi and Coca- Cola about identical flavor, but coke won the case stating that their drinks have a unique taste.

6. In the 20th century, the business initially had a lot of control on price due to a monopoly system, but with the increased competition it does not have that much control on the price of the product.

7. The marketing for this company is always taken as an example. People know the company by the name of the products it has. It has marketed itself so well that common people address any type of soft drink as “Coke”.

8. Innovation is a key to success, so the company should come up with other types of beverages that are different from this carbonated product.

9. Based on the above, the market structure that fits the most is the oligopoly market structure, where the products are heterogeneous in nature, but can be differentiated.

Here are the original instructions for Assignment 4 Market Structure:

1. Briefly describe the business.

2. How many businesses of this type are there in the area? In the country?

3. How easy is it to start a business that would compete with this one? Are there barriers to entry or exit?

4. What type of product or service does the business produce? Is it identical to others in the industry or is it differentiated to some degree or perhaps unique?

5. How much control does the business have over its price in the marketplace?

6. Should the business engage in marketing and advertising? Why or why not?

7. Should the business develop new products or services? Why or why not?

8. Should the business develop new production (or service) technologies or processes? Why or why not?

9. Based on your answers to questions 2-8 above, what type of market structure model fits this business best? Why?

Explanation / Answer

1. The business is about manufacturing and selling of soft drinks and other carbonated drinks. The company produces soft drinks which are supplied wide across the world. Coca-Cola had a monopoly in the market earlier but now it has reduced due to the presence of competitors.

2. There is a huge competition in this area. A lot of companies are set up and closed due to failure. There are companies like Pepsi, Thums up, sprite, mountain dew, fantastic, mirinda, red bull, lipton, etc. All these businesses are in the same field of manufacturing soft drinks and carbonated drinks.

3. It is not at all easy to start a similar business as such a huge level. There's a lot of capital requirement, manpower and skill in growing in this particular field. The business needs to have an edge over others so as to survive in the market. It needs to have a great distribution channel.

There are a lot of rules and regulations for entry and exit into this business. There is a need of licenses and contracts to enter into this business. The rules of winding up are applicable on the exit ftom the business. A company needs to abide by all of them in order to survive in the market.

4 the company produces soft drinks and carbonated drinks which have a unique taste. It had also won a case against Pepsi in which it's taste was held to be different from others.

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