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Market Structures

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Market Structures

Differentiating Between Market Structures

The competition between Coca-Cola and Pepsi has been around longer than any other beverage in history. I will explain the differences between the two giant's soft drink companies on market structures and their competitive strategies. The impact cola drinks have on consumers within the United States and the rest of the world. Many arguments have started over which is the better product in taste, price, sales, and advertisement. The answers to the questions will never be settled upon, but I will keep a basis opinion since I am big Coca-Cola fan. Oligopoly Coca-Cola and Pepsi are the two dominated beverages in the soft drinks industry. Both soft drink companies has been competing against each other for years. The soft drinks are similar in color and taste that are perfect substitutes for each other. This type of market is considered an Oligopoly market where there are only a few companies that are completive in the market placed. In an oligopolistic market, both firms are dependent on each other for consumer’s profit, but also depend on each other. Coke and Pepsi have always have watched each other during the holidays and summer to compete on prices. The products for both companies fly off the sleeves on great price reduction. Coke reduces their price, Pepsi will reduce the price to stay in the game to make a profit. Even without the price reduction, there some consumers that are loyal to their brand of soft drink they will buy the product no matter the price.

Perfect Competition From the beginning Coca Cola and Pepsi first started, the world has seen two cola giants go head to head into a war over market share and sales. During the cola wars and the cola taste test has proven that both companies’ soft drinks are similar to each other. The competition is...

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