2. Technology, R & D, and Efficiency. You are a business manager for Coca Cola a

Question

2.   Technology, R & D, and Efficiency.

You are a business manager for Coca Cola and some new competitive soft drinks are being introduced with great customer acceptance.

a. Explain to your boss the fast second strategy.

b. Why and how Coke would use the fast second strategy to increase its economic profit i.   Discuss the why

ii. Discuss the how

iii. List and discuss 2 examples.

c. Explain to your boss how Coke can use the protection provided by patents, copyrights, and trademarks to increase their economic profits.

i.   Discuss what each of the 3 protections apply to, and

ii. Discuss how each will help a firm achieve economic profits.

d. Explain to your boss how Coke can use their Brand to increase their economic profits.

i.   Discuss the following and each can be used to increase a firms economic profit:

1. Brand-name recognition

2. Brand equity

3. Brand promise

4. Brand personality

e. Explain to your boss how technological advance increases productive efficiency and allocative efficiency.

i.   Discuss the impact of technological advancements on productive and allocative efficiency.

Explanation / Answer

Siecond strategy is very important to meet the current competition at hand. The effective second strategy

a. The effective second strategy is that reducing the price and also giving it in a fresh new packing with a reduced quantity. The is one of the second strategies to counter the competition. It is a known fact that when you reduce the quantity with a new packing it is mandatory to reduce the price of the product in the same ratio that it is being reduced. Hence you can make some profit out of it.

b. i) ii) With the reduced quantity and the new packing, is not mandatory to reduce the price in the same ratio as that of the quantity. Hence the consumer what want to consume less amount of the energy drink will go for the small packaging. This will definitely boost the sales. Instead of people fully avoiding the product, people who want to consume less, will go for the lesser quantity packing.

iii) A consumer who just want to have the taste of the energy drink or the refresher will go for the small packing. This is an example of the strategy working. One more point is that, volume of sales will also increase, attracting some bulk orders.

c. Certain patents and copyrights obtained by coke, will also safeguard you from the competition. The competitor cannot use the same formula for their product also, to match the taste that you are providing. Patents, copyrights and trademarks definitely saves your economic profits from being eroded.

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