Oligopoly Market of Soft Drink
REPORT ON OLIGOPOLY MARKET OF SOFT-DRINK INDUSTRY
Submitted by: Priyanka (Student) Jaipuria Institute Of Management, Lucknow
THE EXISTING DUOPOLY
OLIGOPOLY
Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. Oligopoly is of two types- pure Oligopoly where the product is same and differentiated oligopoly where the product is different.
When we talk about soft drink market in India, the two major names which come in our mind are PepsiCo India and Coca Cola India Ltd.
Which comprise of almost the whole chunk of soft drink market and that is what makes that market a differentiated oligopoly and almost a perfect duopoly. They have been present since almost three decades now and have not faced any kind of competition since their inception in Indian market
CHARACTERSTICS
Interdependence- Less number of firms results in greater interdependence. Any change in price or output by a firm has a direct effect on the rival, which then retaliates and changes its own price or output. So, the oligopolist not only considers the market demand for the industry’s product but also the reaction of other firms in the Industry and more than one reaction pattern is possible from the rival’s side. This phenomenon is evident in soft drink as well. Since their inception in Indian market every time there has been some specific price setting it h was a simultaneous move and not a sequential move. Coke was a company ruling the markets before Pepsi entered. Earlier the price of coke was cost based i.e. it was decided on the cost which was spent on making the product plus the profit and other expenses. But after the emergence of other companies especially the
Submitted by: Priyanka (Student) Jaipuria Institute Of Management, Lucknow
THE EXISTING DUOPOLY
OLIGOPOLY
Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. Oligopoly is of two types- pure Oligopoly where the product is same and differentiated oligopoly where the product is different.
When we talk about soft drink market in India, the two major names which come in our mind are PepsiCo India and Coca Cola India Ltd.
Which comprise of almost the whole chunk of soft drink market and that is what makes that market a differentiated oligopoly and almost a perfect duopoly. They have been present since almost three decades now and have not faced any kind of competition since their inception in Indian market
CHARACTERSTICS
Interdependence- Less number of firms results in greater interdependence. Any change in price or output by a firm has a direct effect on the rival, which then retaliates and changes its own price or output. So, the oligopolist not only considers the market demand for the industry’s product but also the reaction of other firms in the Industry and more than one reaction pattern is possible from the rival’s side. This phenomenon is evident in soft drink as well. Since their inception in Indian market every time there has been some specific price setting it h was a simultaneous move and not a sequential move. Coke was a company ruling the markets before Pepsi entered. Earlier the price of coke was cost based i.e. it was decided on the cost which was spent on making the product plus the profit and other expenses. But after the emergence of other companies especially the