Coca-Cola Analysis

2482 words 10 pages
This is an essay to discuss the economics phenomenon with a particular product in the beverage area. Trying to analyze the relationships among the price, demand and supply and other factors in the beverage industry, such as substitute and complement products, market competitors and input prices or costs, etc.

Coke refers to Coca-cola which is a dominant product of the Coca-Cola Company. There are six parts in this essay to display the market structure, factors affecting price, demand and supply, substitute and complement products, elasticity, market competitors and some factors of production of the Coke.

Market structures
A classification system for the key characteristics of a market, including the number
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‘A substitute is a good that can be used in place of another good’ (McTaggart et al. 2003). It is the alternative products available for customers in the same industry. Coke has a number of substitute products from the internal of CCA and external competitors. The substitute products from internal of the company include coke zero, diet coke, and lift and so on. The substitute products from competitors include Pepsi, Sunkist from PepsiCo, Pasito from Kirks. These products have very small differences on its flavour, price, and performance. They can satisfy customer’s need similarly. When people cannot buy coke in case, they can purchase other products mentioned above for substitute.

The substitute product is very important for a product. One of the Porter’s five forces analysis mentioned that the threat of substitute products or services. The substitute products are attractive alternative because the similar price and flavour, when the substitute products lower switching cost, the customers will easily shift to the substitutions. Also the similar price, quality and performance of the products will promote customer’ comparison when they are purchasing.

On the other hand, the substitute products may affect the quantity of demand of a product. Based on the law of demand, when the price of a good rises, other things remaining the same, and its relative price its opportunity cost rises. Although each good is unique, it has substitutes, other goods that can be used in its


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