Coke And Pepsi Case Study
In the carbonated soft drinks industry, Coke Cola and Pepsi Co are the biggest players in the market for aerated beverages. Both the companies have been competing strongly against each other for decades. The market is dominated by these two industry leaders with a total market share of 72%; Coke’s market share is 42% and Pepsi’s 30%. This is known as an oligopoly market; where there are few large firms competing with each other in the industry. Since both the company’s market share so large, the market is very close to a duopoly (other players having a very small impact on the market). Hence we assume this to be a situation of duopoly. The 2 companies sell products which are very close substitutes and are constantly fighting for greater market share. A person may buy a Coke product instead of a Pepsi one, and vice versa. The objective of both is to maximize their profit. Hence, we can say that these 2 players are involved in a non-cooperative game, the objective being to garner the most profit, and capturing market share being the most effective way to do so. Since Coke and Pepsi are perfect substitutes, the price elasticity of demand should be perfect elastic. However, there are some factors that results in a fairly elastic demand. When Coke increases its price, most of its customers that are highly sensitive to price changes will switch to Pepsi due to the similarity of the taste. Nevertheless, some of its customers that are highly loyal are willing to pay more for Coke
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Dreams Coffee Case
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Case Study Coke And Pepsi
1214 Words | 5 PagesAbout the Paper Authors: David B. Yoffie and Reene Kim Title: Cola Wars Continue: Coke and Pepsi in 2010 Journal name: Harvard Business Review Volume & Issue: 9-711-462 Year: May 2011 Introduction This case study observes the industry structure and competitive strategy of Coca-cola and Pepsi over 100 years of rivalry.
Microeconomic Project: Case Study Of Pepsico
819 Words | 4 PagesECONOMICS PROJECT Name: Saatwic Malhotra Course: BBA.LLB (H) Section: A Enrollment Number: 7058 ACKNOWLEDGEMENT I express my sincere thanks to Mrs. Tanu Sachdeva, my economics teacher who guided me throughout the project and also gave me valuable suggestions and guidance for completing the project. She helped me to understand the issues involved in the project making besides effectively presenting it. My project has been a success because of her. PEPSICO • PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Purchase, New York. PepsiCo has interests in the manufacturing, marketing, and distribution of grain-based snack foods, beverages, and other products.
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Petroleum Industry Analysis
3481 Words | 14 PagesThis means that if one of the firms increases the price of their above P in order to increase revenue the firm will experience elastic demand. This is because if one firm increases its price the other firms will keep their price the same, consumers will increase their demand for the lowest price as the products are homogenous, therefore the demand for the product with the highest price will decrease and become more elastic. However if a single firm decides to decrease its price below P then it will experience inelastic demand. This is due the other firms lowering their price in order to keep market share. If the other firms lower their costs the firm will gain demand from it initiative.
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