Oligopoly - Summer Yu Hai Woon

Coca-Cola and Pepsi !!!  Oligopoly?? @@

Isn't everyone like to drink Coca-Cola??

Isn't everyone like to drink Pepsi??

But does anyone know the market structure of them???  >.<

Coca-Cola and Pepsi are two most popular and widely recognized beverage brands in the whole world. They are the predominant carbonated cola beverages. Furthermore, the carbonation of Pepsi has 1 gram less than the carbonation of Coca-Cola.

Oligopoly is applied between Coca-Cola and Pepsi firms. Oligopoly refers to a market structure that there are a few large producers which are mutually independent selling homogeneous products. Basically oligopoly would only exist when there is only small number of firms in an industry that they must consider the reactions of the rivals in formulating its price policy. 

The entry barriers in oligopoly structure are high which is difficult to enter the industry. This high entry barrier is present due to copyrights, patents, advertisements and also economies of scale (EOS). 

In my opinion, both of them are able to gain more subscribes due to mutual independence of their pricing policy and non-competition such as brand loyalty. This is because both Coca-Cola and Pepsi firms are facing mostly the same of their products.

Reference to : http://www.wikivs.com/wiki/Coca-Cola_vs_Pepsi

Post by Summer Yu Hai Woon