Current Market Conditions Competitive Analysis
D. Buress, R. Jackson, J. Jones, P. Nelson, I. Skidmore
ECO/365
February 9, 2015
Reynaldo Caratao
Current Market Conditions Competitive Analysis
Successfully analyzing and understanding the competitive forces in a market essential when attempting to introduce a new product. This team has selected the juggernaut of soft drink companies, Coca Cola, to analyze. We have targeted the company’s introduction of stevia sweetened products. Stevia is a natural sweetener that contains zero calories and little to no documented negative side effects on consumer’s health. This analysis will study the central market forces in relation to the prevailing competition.
Organizational History and Product
Coca-Cola is a beverage company that was started 125 years ago. Coca-Cola was accidently invented by combining a syrup and carbonated beverage together. Instead of using for its intended use as a medicine, John Pemberton, an American pharmacist, decided to serve it as a fountain drink. On May 8, 1886, Pemberton served the first drink in a downtown Atlanta pharmacy counter. Mr. Pemberton registered the “Coca-Cola Syrup and Extract” with the U.S. Patent office in 1887. Unfortunately, Pemberton took ill from a host of issues, and in 1888, sold the formula for Coca-Cola to Asa Candler, a banker, and real estate developer. Candler’s total investment of the formula totaled $2300 plus interest he paid to Pemberton and two other investors.
Battling those who perceived the drink as being a drug, Candler was tasked with engaging the Food and Drug Administration over the healthiness of the drink; he won. Mr. Candler did not look at his drink as a drug; although the drink ingredients do not have a drug connection, it does have one secret ingredient that has to this day never been divulged to the public, and is a registered proprietary secret. Coca-Cola has become a global brand and a global leader in innovation and technology.
Factors That Affect Demand, Supply, and Equilibrium Prices in the Market
Coca-Cola is a soft drink that is in high demand and supply. The equilibrium prices in the market are all considerably the same with in this market, therefore prices are stable. Coca-Cola has to contend with other brand companies that are just as good and in demand as they are. Pricing remains constant with Coca-Cola and the other brands. However, if Coca-Cola demand curve changed it would undoubtedly affect Coca-Cola demand. A shift could affect sales and lead one of the other products to take over in demand. Coca-Cola knows that there are others who are just as equal to move in front, but by staying equally competitive, and the taste remains allows the equilibrium prices in the market to remain the same. If a change were to occur, one of the Coca-Cola competitors would be able to capitalize. If the economy takes a hit, it will affect how consumers shop, and a competing soft drink could eventually win in sales. Loyalty will keep the faithful customers who rely on taste, but others, there is no difference in taste. In order for a competitor to operate successfully in the market with Coca-Cola, it is important for them to be just as competitive and available in the market. Soft drinks are very popular and part of a culture of soda drinking generation. Coca-Cola history goes back generations, and this will play a role in the analysis of its competitor and potential customers. It all comes down to taste, loyalty, and advertisement that can propel a competitor; however, Coca-Cola will be consistent with taste to stay ahead of the game.
The stevia used in Coke’s products is primarily grown and harvested in South America. Due to the fact that stevia is not a staple crop in these locations, any upward shift in demand could cause a global shortage of the sweetener. All companies that have decided to enter the stevia sweetened soft drink market must closely monitor the supply market and be ready to institute