Coca Cola Oligopoly Analysis
Oligopoly Coca-Cola & Exxon:
Oligopoly: the market where only a few companies or firms making offering a product or service.
The soft drink company Coca-Cola can be seen as an oligopoly. There are two companies which control the vast majority of the market share of the soft drink industry which is Coca-Cola and Pepsi. There are some other smaller companies like Dr. Pepper with smaller market share. Coca-Cola and Pepsi produce nearly identical products. Coca-Cola and Pepsi dominate the industry by 72% of the market. And Coke 's market share is 42% and Pepsi 's market share is 30%. (Russell, 2012.). The gasoline industry is an oligopoly and it is dominated by a few giant companies like ExxonMobil, Chevron, and Texaco. There are many small
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Suppose the price of Coke rise up the demand for Pepsi will increase and the quantity demanded of Pepsi will increases. Because Coke and Pepsi are Substitutes of each other, there is a positive relationship between the price of Coke and the quantity demanded of Pepsi exists. For ExxonMobil oil Company, there are different factors that depend on the price elasticity of demand for ExxonMobil and shell. The main factor is a number of cars and other transportation options like public transport. The price elasticity of demand for oil companies is inelastic. The rise in the price for ExxonMobil means a smaller change in the quantity demanded the ExxonMobil. ExxonMobil and Shell are substituted for each other products so the increase in the price of ExxonMobil would result in the increase in the demand of …show more content…
The biggest cost reduction in any company is to use up-to-date technology with trained employees which are using the technology. Both Coca-Cola and ExxonMobil should introduce employee training program by which all the employee have the knowledge of the equipment they are using. There are a new system smart inventory control systems that help the companies to reduce the inventory levels, improve profitability and speed up the production process. These systems "helps to keep abreast of technological developments and ensure that your business is taking advantage of the latest innovations to improve productivity." (BDC, 2015). Both companies have to train their employees in the field where the employees are expert in and also empowering employees will also reduce the production cost. "Giving the front-line employees the tools they need to do their jobs more effectively can be good for productivity." (Bonnie Conrad, Demand Media,
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