Oligopoly Of Coca Cola Case Study

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1. Bargaining Power of Buyers: • Oligopoly of Coca-Cola India, PepsiCo India, and Parle Bisleri Ltd. - three firms together control nearly 71% of the Indian soft drink market.1 • In total, 125 crore people in the country drink 590 crore liters of soft drinks in a year.2 The average soft drink (200 ml) costs just Rs. 10 which makes each individual purchase relatively insignificant. • Because the soft drink industry is very competitive, switching suppliers is relatively easy and the price difference is rather small. • Use and throw packaging and easy to consume products. • All the information (nutrients, etc.) that is needed is provided. • High price sensitivity and willingness to switch brands if one becomes much more expensive than the other…show more content…
Companies must get govt. approval to sell their product, have licenses to produce and distribute internationally, and insurance to cover potential lawsuits, accidents, or faulty product. • A new comer in this industry can expect retaliation from current companies. The soft drink industry is an oligopoly with existing firms having strong distribution channels, relationships with suppliers, retailers, and brand value to customers. The industry leaders have the tools necessary to force out new competitors. 4. Threat of Substitutes • Available substitutes do not have performance limitations or high prices that would justify their use over the products in the soft drink industry because substitutes are not priced at a high enough cost where it would affect their use as a mainland product. • Customers would not incur costs in switching to substitutes. The choice of switching to a substitute for a customer would in most cases be the difference of cents. • There are substitutes for carbonated beverages, like water, tea, sports drinks, etc. • Customers are not likely to go for substitutes because brand name loyalty is a very strong competitive pressure in this

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