Current Market Conditions

Team B

Gladys Arroyo, Antoinetthe, Sonja Cynel, Adriana Cedant and Sandra Florez

ECO/365 Principles of Microeconomics

University of Phoenix

4/26/2008

Market Structure of the Carbonated Drinks Industry

The carbonated drink industry is a very extensive worldwide and has also encouraged an increase in similar industries such as the packaging field that handles the production of cans, glass, and plastic bottles for example, and at the same time is generating significant revenue for additional service industries like advertising. The carbonated drink industry consists of the raw material retailers and providers. Most of the time, the larger beverage firms have leading positions in the …show more content…

Consumers are becoming health conscious and are turning over to flavored water, energy drinks, and natural products such as juices, smoothies and low-calorie beverages. The top 10 soft drink by brand is Coca-Cola Classic, Pepsi-Cola, diet Coke, Mountain Dew, private label flavors, and diet Pepsi, Dr Pepper, Sprite, private label colas and caffeine-free diet coke. Due to our economy being in recession, consumers are also becoming more price savvy and they have an idea of what the average cost should be. Consumers have more choices and are trying to pinch every penny they can, therefore, they can force competitive pricing amongst the top 3 companies such as Coca-Cola, Pepsi-Cola and Cadbury Schweppes. As stated per the author Richard I. Kirkland Jr., “As long as goods and capital continue to circulate at least as freely as they do today, the global Economy can remain divided into 186 competing nation- states and still deliver an unprecedented expansion in wealth.” Additionally, this makes competition tougher for the rest of the beverage companies competing for the same market and causes a particular difficult situation in increasing revenues.

Government Regulations

New products are subject to various government regulations and statues in the United States. Food and Drug Administration regulations may affect the ability of an organization. Therefore, in the carbonated soft drink industry an