Everyone Knows Coca-Cola

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The Coca-Cola Company offers its product, Coke or Coca-Cola Classic, for sale in the beverage industry. Included in the beverage industry are sub-categories such as the soda or soft drink industry. Introduced in 1886, the Coca-Cola Company sought to offer its coke product to the masses. Coke has been successful in winning its market share of the soft drink industry as evidenced by a report that states, "the drink is reportedly recognized by 94 percent of the world's population" (Hartlaub, n.d.). In an expansion of the typical market, Coke took its place in history by becoming the first soft drink to be consumed in outer space (Hartlaub, n.d.). This paper discusses the market structure in which the Coca-Cola product is offered. The different market structures are analyzed and implications of the market for the product are described.

Types of Market Structures

There are four types of market structures: Pure or Perfect Competition, Imperfect or Monopolistic Competition, Oligopoly, and Perfect Monopoly (Reynolds, 2005). Because of the range of strategies adopted by the seller, market structures may evolve from one type to another during the life of the product ("Oligopoly & Monopoly," n.d.).

On one end of the spectrum of optimal market structure is Pure or Perfect Competition. Perfect Competition is defined as:

The theoretical free-market situation in which the following conditions are met: (1) buyers and sellers are too numerous and too small to have any degree of individual control over prices, (2) all buyers and sellers seek to maximize their profit (income), (3) buyers and seller can freely enter or leave the market, (4) all buyers and sellers have access to information regarding availability, prices, and quality of g...

... middle of paper ...

...Soft Drink (CSD) industry have shifted the focus to healthier drink alternatives and are forcing companies to diversify into different products. The Coca-Cola Company has found a niche in the market with the original Coke product and any changes to the product line will be secondary to the primary focus. A recent report in Forbes Magazine states,

Just two of its brands, Coke and Diet Coke, together command almost 27% of the U.S. CSD market. All its brands together control 42% of the CSD volumes in the U.S. while PepsiCo holds 28% share in the U.S. Moreover, Coca-Cola has also strengthened its grip on emerging markets such as China and India. The company holds more than 15% and 54% of the CSD market in China and India respectively. (Trefis Team, 2013)

The Coca-Cola Company is operating as a differentiated Oligopoly and is gaining strength in foreign markets.

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