Competitive Strategies and Government Policies

Ena Aczon, Jose Carreon, Erica Hurts, Kim Sherman and Karl Van Reusen

ECO/ 365

Mr. Johnny Shull

Overview

The Impact of New Companies Entering the Market, Mergers and Globalization on Market Structure

• “Coca-Cola and Pepsi Co. dominate the industry with their strong brand names and great distribution channels”(Ziegler, 2006).• New entrants are not a strong competitive pressure for the soft

drink industry.• Several leading companies have been looking to drive revenue

growth and improve market share through increased economies of scale found through mergers and acquisitions. Example: Coca-Cola acquires 17% stake(%2.15 billion) from Monster Bev. Corp, expanding Coca-Colas energy drink sector.• Global soft drink volumes expanded over 3% in 2014, values sales

grew over 6% to reach $867.4 billion thanks to accelerated growth in China, Mexico and Brazil.

Price Elasticity of Demand, Pricing and the Sustainability of Profits

• The second part of bullet one. Please respond to each item in the title of the slide.

The Impact of Current and Expected Government Policies and Regulations.

• “Since 2005, Coca-Cola has engaged in more than 380 water-focused projects with partners including the Word Wildlife Fund, the US Agency for International Development, CARE and the United Nations Development Program. The company estimates that the initiatives that improved access to water and sanitation has already benefited more than 1.6 million people.”( 2014, Fogel, D.S. and Palmer, J.E)

Taxes and Regulations in Place to Address Issues Related to Externalities.

• “The new containers did not carry a deposit that could be redeemed if returned to retailers, consumers carelessly discarded these “throwaways” in America’s roadways, national parks, and city streets, creating a visible blight that caused many to question the prudence of this new soft drink delivery system.”( 2013, Bartow Elmore). • The recycling systems only captured a small portion of the litter

generated (only 28 percent in the case of plastic bottles in 2012), but industry continued to produce more and more one-way containers because they were never forced to pay for the waste they generated.

The effect of Global Competition With Regards to Labor Supply and Demand.

• First part of bullet three. Please respond to issues Coca Cola might face if other soft drink companies started operations and pulled from the supply of labor. This would constitute a shift to the right of the labor supply curve.

Relations With Unions Plus Rules and Regulations in the Soft Drink Industry.

• Second part of bullet three. Please provide reference to an actual regulation in the soft drink industry. Preferably one that addresses Cokes major externality, litter. See if you can find any regulation on production methods, materials used or disposal. Once found, provide a reference. Also, briefly discuss how unions might effect pricing or production.

Recommendations: The Impact of New Companies Entering the Market, Mergers and Globalization on Market Structure

• Use this slide to make recommendations to the impacts identified on slide 3

Recommendation: Price Elasticity of Demand, Pricing and the Sustainability of Profits

• Use this slide to make recommendations on how to handle the topics covered on slide 4.

The Impact of Current and Expected Government Policies and Regulations.

• Use this slide to make recommendations about the government policies discussed on slide 5.

Recommendation: Taxes and Regulations in Place to Address Issues Related to Externalities.

• Use this slide to make recommendations on the tax or regulations regarding Cokes major externality, litter. Please see slide 6.

Recommendation The effect of Global Competition With Regards to Labor Supply and Demand.

• Use this slide to make recommendations on issues arising from global labor supply and demand problems. Pleas see slide 7.

Recommendations: Recommendations: The Impact of New Companies Entering the Market, Mergers and Globalization on Market Structure

• Use this slide to make recommendations to points made on slide 8.

Recommendation: Relations With Unions Plus Rules and Regulations in the Soft Drink Industry.

• Use this slide to make recommendations on how to deal with the regulation identified on slide 8 as well as the issues identified if unions are involved.

Conclusion

References

• Global Soft Drink Market Grows 3.3% as Key Markets Bounce Back. (2015, January). EuroMonitor Research, 1(), 1. Retrieved from http://blog:euromonitor.com• (2013) Bartow Elomre Citizen Coke: An Environmental and Political

History of the Coca-Cola Company http://web.a.ebscohost.com.contentproxy.phoenix.edu/ehost/pdfviewer/pdfviewer?sid=47b993af-db50-4ef4-9487-7f23db5790ef%40sessionmgr4004&vid=1&hid=4214• (2014) "Coca-Cola keeps the water flowing: Ways to remove threat to a

unique resource", Strategic Direction, Vol. 30 Iss: 10, pp.14 – 16 http://www.emeraldinsight.com.contentproxy.phoenix.edu/doi/pdfplus/10.1108/SD-08-2014-0103