Pepsi Market Structure

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1-There are some kinds of market structure like perfect competition, monopoly, and oligopoly. In oligopolistic markets, independent can be making more control the market supply, and so the price will be making by a seller. They offer a huge amount of similar products, differentiated will making a different by advertising and promotional companies, and can make effect of the other 's marketing strategies. Examples include the automotive industry, airline industry, banking, and petroleum companies. This case study taking about one of these kinds is an oligopoly which a few firms dominate. Once a market is divided between a few firms, it is a situation to be more concentrated. There are only a few firms dominate, but also many small firms may…show more content…
Pepsi and Cola-cola is an excellent example to take an example for oligopoly. Coca cola and Pepsi are work in an oligopoly market. They are trading on the similar product so they can make control over price and also will consider their action and reaction for each other, when they consider changing the products price they always change the price of the products according to the price of a competitor and hole demand curve and target share of market they willing and planning for it. They are using advertising and sales promotion for attracting and increase their market share from a potential customer.
Mainly, the two firms use low-price strategy approach at the same time to maximize the market share and profits. Particularly when the peak season on summer season arrives, both of the companies will use cut-throat price for competition strategy to increase their sales and profit. Game theory is used to improve a market share. A game theory is a pricing policy and it making a recommendation for a firm to enhance profit. There are barriers to entry on this market. Coca cola and Pepsi making and signed an agreement and cartel contract. The Coca-Cola and Pepsi will become a cartel to preclude others firms to entry this market because it will decrease their accounting and economic profit. The cartel is a few number of companies expressible together to low cost, increase price and increase economic profit. No of coca cola or Pepsi exit from the market, another firm will become a
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This is different than a monopoly, which is where only one company making control all market. There are many industries that are controlled ruled by oligopolies; like health care industry, oil industry, and the electronic industry.
The Advantages of an Oligopoly
1. High Profits
Because there are a few competitions, the companies that are trading in the market have a large amount of profits. The services and goods that are managed through oligopolies are likely highly having a big market share that has potential good profit.
2. Simple Choices
Also because there are few companies that offer these goods or service that making you are looking for makes it easy to you and compare them and choose the company that making the biggest satisfaction to you. In other markets structure may be difficult to search and looking at all of the firms to compare pricing and services offered.
3. Competitive Prices
Being able to easily contrast prices and quality forces these companies to keep their prices in reasonable and available limits, according to the importance of customer and price elasticity of demand for this product and services. This is a good benefit for the customer because prices continually go lower as other companies lower their prices.

4. Better Information and
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