Sunday, February 16, 2020

CASE STUDY ANALYSIS Essay Example | Topics and Well Written Essays - 1000 words - 1

CASE STUDY ANALYSIS - Essay Example This resulted in lower demand of the beverages. Companies’ performances in the beverage industry have also been affected by the change in consumer preference. In the recent times, there has been a growing preference for sports drinks, energy drinks and vitamin-enhanced drinks. This has resulted in a decrease in the demand for the normal carbonated soft drinks. It is expected the decline will continue to take place as the preference for the alternative beverages continue to grow. This growing preference has created opportunities for new companies to join the beverages industry because it gives them a competitive advantage over the already established firms that major produce the carbonated soft drinks. As a result, the industry has expanded and with its expansion, the performance of already existing firms has declined. The declined could first be associated with the decreasing demand of the carbonated soft drinks. Secondly, the fall in performance is due to the increasing number of firms in the market competing for the same customers. The previously already established companies are also forced to start producing the alternative drinks in order to maintain their market share. The emergence and growth of new products that were not there before in the beverage industry have also contributed to the performances of the companies. There has been an increased growth of new products in the beverages industry. These new products threaten to displace the already existing products in the market. An example of a new product that was not in the market before is the Living Essentials’ 5-hour energy drink. This is a two- once energy shot drink. Since its introduction, it has been able to displace all the other energy drinks that were in the market. Its market share by 2009 was 85% of the market share of all the drinks falling in its category. Pricing is one of the strategies employed by Coca

Sunday, February 2, 2020

Perfect competition, monopolistic competition, oligopoly and monopoly Essay - 1

Perfect competition, monopolistic competition, oligopoly and monopoly - Essay Example Thirdly, an oligopoly comprises of few firms. When these firms merge, they reduce output to allow them raise their profits as in the case of a monopoly. In doing so, they produce output that creates incentives for cheating in the case of collusive agreements, ending up competing with each other. Fourthly, a monopolistic competition entails many firms competing against each other, each producing a slightly different product. This paper will depict the traits of different types of market, their differences, similarities, and economic efficiency of outcomes under perfect competition and monopoly. The major traits of perfect competition include prevalence of many small firms, all organizations selling identical products, free entry and exit to the market, and perfect knowledge regarding the prices and technology in the market. These traits mean that it is not possible for a firm to exercise any form of control in the market. Since the large number of firms sell identical products, a broad range of perfect substitutes prevail based on the output of a given organization. As such, the demand curve for the firms in a perfectly competitive market is perfectly elastic (Dransfield, 2013). Since firms are free to enter the market, this means that resources such as capital are perfectly mobile. As such, it is not possible to impose barriers of entry into the market. With regard to the issue of perfect knowledge, it is true that organizations operate in a similar environment. As such, consumers are aware of the perfect substitutes prevalent in the market for a certain good, especially since firms produce matching products (Stackelberg, 2010). In a perfect competition market, the industry and market forces determine the prices and output. The price is set by the market forcing firms to adjust their prices based on equilibrium position of firms as shown by the figures below. In the first figure, the demand and supply curves interest at point E.