Carbonated Drinks Industry Case Study Example | Topics and Well Written Essays - 2000 words

Carbonated Drinks Industry - Case Study Example It is in this aspect that Coke is differentiated. Unlike other products intended for a specific market niche, Coke targets a wide market range - from the mass market to the high end segment. This is in line with the vision of former company president Robert W. Woodruff, that everyone on Earth consumed Coke. To limit the scope, this paper assesses Coke in the context of the carbonated drinks segment in the UK. It evaluates the supply conditions given the prevailing market structure and competition among softdrink suppliers. Furthermore, this paper discusses the barriers to entry and political or social factors impacting the industry. It also considers the factors that drive demand, prospects in the carbonated drinks segment given changing demand trends and potential entry of new players. The 5-billion UK carbonated drinks market has more than adequate supply of carbonated drinks (The UK Softdrinks Market 2004). Notable colas include Coke; Pepsi Cola, Coke's major rival; Zamzam Cola, which is named after Mecca's holy spring; Virgin Cola, which is marketed under Sir Richard Branson's company; and Mecca Cola, which is promoted as Muslim people's alternative to US-made softdrinks. (McCaffrey 2005) In terms of market structure, the UK carbonated drinks sector may be character... Although there are numerous players in the industry, the cola drinks offered are differentiated depending on the preference of the market niche targeted (Gans, King, Stonecash & Mankiw pp.76-8). For instance, Mecca Cola is differentiated as it is advertised as the cola for Muslims. Bearing the catchphrase "No more drinking stupid, drink with commitment," (McCaffrey 2005) supplier creates a different brand that appeals to Muslim communities and their sentiments on Western culture. On the contrary, the UK carbonated drinks market may be classified as oligopolistic since it is dominated by few major suppliers. Quantitatively, oligopoly is derived by using the four-firm concentration ratio, measuring the percentage market share of the four largest firms in an industry (Samuelson & Nordhaus 2001 pp. 89-93). A ratio of beyond 40% generally renders the market as oligopolistic (Tirole 1988). According to Canadean, Coca-Cola Company alone has captured 45.3% of the market share of the UK carbonated softdrinks category in 2004. This indicates that the total market share of the two giant suppliers have gone above the threshold, thus, the industry may be deemed oligopolistic. Competition Unlike other oligopolistic industries wherein collusion of firms to raise prices is observed (Samuelson & Nordhaus 2001 pp. 89-93), Coca-Cola and Pepsi continue to battle each other in the marketing arena. Albeit their rivalry has spanned for almost a century, non-price competition has prevailed. These firms utilise extensive media mileage to compete with each other and foster brand loyalty. This is evidenced by the substantial allocation of firms for advertising cost. Instead of pricing, though the retail prices of Coke and Pepsi Cola do not substantially vary, they are observed to

Singapore's Macroeconomy Essay Example | Topics and Well Written Essays - 3000 words

Singapore's Macroeconomy - Essay Example Singapore as a country is devoid of natural resources. In its foreign policy, Singapore has incorporated polices to strengthen its relation with the members of Association of South East Asian Nations (ASEAN). Singapore also maintains a strong association with the United Nations Forum for East Asia-Latin America Cooperation (FEALAC) to improve trade relations with Latin America and East Asia. So, from the very beginning, it had focused on the development of capital intensive methodologies for further growth (Australian Government, n.d.). The Nominal GDP of Singapore in the year 2012 was recorded as 276.52 billion dollars (International Monetary Fund, n.d.). This has even surpassed the prediction by IMF, which had forecasted the GDP to be around 270 billion dollars. Analysis of the country’s business cycle The GDP of the country is tabulated in the following table. Table 1: Real GDP of Singapore Year GDP current prices in US Dollars Growth Rate 2000 94.31 9.04 2001 87.70 -1.154 2002 90.64 4.202 2003 95.96 4.58 2004 112.70 9.159 2005 125.43 7.37 2006 145.75 8.764 2007 177.58 8.857 2008 189.96 1.701 2009 185.64 -0.98 2010 227.38 14.76 2011 259.85 4.889 Source: (Econ Stats, n.d.) The above table shows the GDP of Singapore at current prices in US Dollars. This paper has considered the GDP growth over the last ten years. The formula that has been used for the calculation of growth is: Rate of Growth of GDP in current year = (GDP value in current year – GDP value in base year)/ GDP value in year base year It can be clearly seen from the table that Singapore’s GDP has been following an upward trend throughout, except a little slump in 2009. The slump can be explained because of the adverse external environment in the World economy. Since then, the economy of Singapore has made a steady progress as can be seen from the rising trend in the GDP. Figure 1: Graphical presentation of GDP Source: (Authors creation) The graph above gives a visual representa tion of the GDP values. It can be seen from the figure that the economy of Singapore had faced a slump in the GDP growth in 2001. This is primarily because of the fact that the country went into recession in the middle of 2001. The chief reason behind this was the slower growth of the US economy, particularly in the electronic sector, which had slowed down the exports from Singapore to not only the US, but also the rest the European countries (Arnold, 2001). Since then, the economy of Singapore had shown a consistent performance. The main reason behind this exceptional growth was not the increase in total factor productivity, which had mainly driven the growth for other Asian countries. The root of growth and a stellar performance for the Singapore economy was the high level of capital accumulation. The growth can be mainly attributed to the mobilization of resources. The development strategies adopted by the government were strategic and vibrant which had mainly propelled the econo my to its growth. In a research conducted by Professor Vu he, it was found that the contribution of the capital-input in the growth process has been around 47%, while labor contributed to around 36% of