Oligopolistic Market Analysis: Coca-Cola's Challenges and Strategies

This report provides a detailed analysis of Coca-Cola's operations within an oligopolistic market structure. It begins with an introduction to the concept of oligopoly and then provides an overview of Coca-Cola, including its history, products, and services. The report identifies key competitors such as Pepsi and Red Bull, and examines the relationship between Coca-Cola and Porter's Five Forces model, assessing the threats and opportunities the company faces in the market. The analysis covers factors like the threat of new entrants, substitute products, the bargaining power of buyers and suppliers, and competitive rivalry. The report concludes with a summary of the challenges and strategic implications for Coca-Cola in maintaining its market position and profitability. The report leverages economic principles to understand market dynamics and competitive strategies. This report is a student's response to an assignment brief which includes an overview of the oligopolistic market, company overview, product and services, competitor analysis, and the application of Porter's Five Forces model.

Business Economics
Coca-Cola
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Contents
Introduction................................................................................................................................2
Overview of company................................................................................................................3
Products and services.............................................................................................................3
Coca-Cola competitors...........................................................................................................3
Relation of Porter’s five forces model and company selected...................................................4
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Introduction
In the present era, there are numerous companies who are performing their business
operations in the different market structure. The term market structure has the traditionally
appeared in two segmented kinds of debates majorly in economics that of Adam Smith on the
other hand with that of Karl Marx (Head & Spencer, 2017). It has been found that there are
four basic sorts of marketplace structure that comprise perfect competition, oligopoly,
monopoly and imperfect competition. The report presents the challenges as well as
opportunities faced by the company that are operating in market. The business that has been
selected for oligopoly market is Coca-cola as they are dealing across the world and Maldives.
The market of Oligopolistic involves diverse companies from different industries which can
lead to the different forms of collusion that reduce the competition and enhance the higher
prices for the consumers.

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Overview of company
Coca-cola is one of the utmost popular as well as largest selling soft drink in the past as well
as best-known brand across world. In year 1886, the company is first served as Jacobs’
Pharmacy. The company bottle begins with the first bottling agreement which is contracted
with the year 1899 and Hutchinson style bottles that are majorly used for manufactured goods
(Coca-Cola, 2019). The most recognized with leading selling soft drink is Coca-Cola.
Products and services
Coca-Cola is the most recognized as well as leading-selling soft drink brand in world. Coca-
Cola soft drink which is provided by the company is available to the customers in the
quantity of 330ml, 355ml, 500ml and 2l. The company also offers the products like Coca-
Cola pot roast, birthday cake, and candied sweet potatoes. In addition to this, the diet coke,
Fanta, sprite, and others are major products offered by them in market (Daughety &
Reinganum, 2018).
The company introduced the Coke2Home app in the market of Indian Ocean that is at toll
that facilitates customers with the motive to order their choice of beverage. Some of the
scores of the people have started embracing the digital that wave in male as well as ordering
the product through online which possible with the help of the Coke2Home app that is
launched by company in Maldives in the year 2017 (Coca-Cola, 2019). The app helps the
customers to pay online as well as to track the delivery of the products on the real-time basis
in turn that help them to cut down on their anxiety of waiting for their order as well as
schedule their day accordingly. This app is first app of its kind in the beverages industry that
is present in Maldives. Thus, this is considered as one of the effective service that is offered
by the company to their customers in market.

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Coca-Cola competitors
In the dynamic environment, the company is performing the business operations in market
where they have to deal with the tough competition. The major participants of firm include
Pepsi and Red Bull.
Pepsi Company is considered as one of major competitors of Coca-Cola Company is Pepsi
which is performing the operations and giving the tough fight to Coca-Cola Company
majorly in soft drink market. The reasons payable to brand fight tooth and nail are that they
both are very string in their supply of the product in the market to make it easily available to
their customers. In addition to thus, Pepsi have the excellent marketing as well as the sales
policies (Bhasin, 2019). It has been witnessed that two brands that compete across many
groups that consist of sod beverages, energy drinks with health along with the bottled water
with the juices which are demanded by the customers in the market. Infact Pepsi is
considered as one of the toughest competitors of the Coca-Cola with their competition has
originated to be called as cola wars.
Another competitor of company that is presented in the drinks is red bull which is unable to
gain the huge market share. Red Bull Company is considered as one of the strongest growing
company in terms of the energy drink/sports drink with among the toughest straight
competitors of Coca-Cola (Pratap, 2018). The popularity of the red bull and its products is
improving due to the extensive acceptance in culture of pub where the Red bull can be varied
in different drinks. The drinks which are offered by the company include the taste which is
stronger as well as loved by the drinkers of Red bull.
Relation of Porter’s five forces model and company selected
Porter’s five forces framework is one of tools that are used for evaluating competitiveness
faced by company in the business. In the competitive industry there is relationship between

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the Coca-Cola Company as well as porter’s five forces model. The model can be practical by
company manages in order to understand the how the five different competitive forces that
can influence the profitability with the motive to form a strategy that can contribute in
improving the strategy (Paliwoda & Thomas, 2013). The tool has strong relationship with the
company due to which the company uses it for managing the competitive advantage as well
as the long-term profitability in the industry of soft drinks. The below given are the five
factors that has a relationship with the Coca-Cola company.
Threat of new entrants: - The possible of an industry identify the new organisations that are
entering in the market. It becomes essential for companies to determine the new entrants that
are present in the market (Ansoff, Kipley, Lewis, Helm-Stevens & Ansoff, 2018). Coca-Cola
Company also evaluates the new entrants which show relations. However, market structure of
company proves that there is low threat for the new entrants of the company in beverage
industry. Along with this, the cost of production for the new companies remains high which
affects the pricing strategy as well as demand and supply of products.
Threats of substitute: - The threat of substitute is one of the forces of porters in which
companies in the industry determine the other options for the products as a substitute
(Rothaermel, 2013). Coca-Cola Company has the relation with this element also because
accordingly the company will determine the substitutes and then making the changes in
strategies. The company finds that there are wide ranges of beverages with different flavours
in the market that can substitute Coca-Cola. The company has wide substitute which affects
the demand of Coca-Cola products and these substitute are water, fresh juice and many
others.
Bargaining power of buyers: - In the industry, it is vital for business to determine customers
and their cost of switching from one company to another (Hill, Jones & Schilling, 2014).

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Coca-Cola Company analyse the bargaining power of consumer which is moderate as easy
availability of the Coca-Cola makes the customers to purchase the products. The distribution
strategy of the company is strong which is clear with the easy availability of products in
stores, outlets and other places. Along with this, customer can switch to other brands (like
Pespsi or red bull) if in case they find the changes in the prices as well as the availability to
the products.
Bargaining power of suppliers: - The suppliers of the company are vital due to which it
becomes essential for companies in industry to consider their bargaining power (Hitt, Ireland
& Hoskisson, 2012). Coca-Cola Company has the relation with this force of bargaining
power of suppliers as they seek many things from their suppliers which include sugar,
caffeine, flavours as well as other ingredients. The company has large operations due to
which suppliers get in contract with beverage companies like Coca-Cola majorly for getting
the bulk order. Thus, this can be said that the suppliers has the low bargaining power which
helps the company to get long term distribution in effective manner which contribute in
meeting the demand of customer by supplying the products on time.
Competitive rivalry: - The competition is improving in every industry due to which it
becomes essential for the companies to determine the intensity of competitive rivalry. Thus,
this is one of the most major factors which form the strong relation with Coca-Cola
Company. The business has major competition in the market that is Pepsi who is giving the
tough competition in the market of soft drinks, bottled water as well as for juice. This rivalry
makes the company to change the policies as well as strategies.
The entire framework of the porter’s five forces shows the connection with the company that
is Coca-Cola. This is also explained in terms of the economies that involve different factors
of demand and supply.

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Conclusion
In the end of the report this can be concluded that Coca-Cola is one of major drink businesses
that perform operations in oligopoly market in which they offer the wide range of products as
well as services. The major competitor of the company that is present in the market includes
Pepsi and Red bull. In addition, the relation of porter’s five forces with business is explained
in the report.

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References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Bhasin, H. (2019). 11 Top Coca cola competitors – Competitor analysis of Coca cola.
Retrieved from: https://www.marketing91.com/coca-cola-competitors/
Coca-Cola. (2019). History. Retrieved from: http://mv.coca-cola.com/en/history/
Coca-Cola. (2019). In Maldives: Your Favourite Beverages are Just a Click Away. Retrieved
from: https://www.coca-colaindia.com/about-us/in-maldives-your-favourite-
beverages-are-just-a-click-away
Daughety, A. F., & Reinganum, J. F. (2018). Market structure, liability, and product
safety. Handbook of Game Theory and Industrial Organization, Volume II:
Applications, 2, 225.
Head, K., & Spencer, B. J. (2017). Oligopoly in international trade: Rise, fall and
resurgence. Canadian Journal of Economics/Revue canadienne d'économique, 50(5),
1414-1444.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases:
competitiveness and globalization. Cengage Learning.
Paliwoda, S., & Thomas, M. (2013). International marketing. New York: Routledge.

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Pratap, A. (2018). Competitors of Coca Cola Company. Retrieved from:
https://notesmatic.com/competitors-of-coca-cola-company/
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill
Irwin.