According to Bloomberg Business Week, Coca-Cola remains the best globally recognized brand across all industries for years, while Pepsi’s brand ranked number 25 in the year 2008. Thus, Coca-Cola is able to charge premiums for its syrup concentrates due to its larger market shares and better brand name recognition. In order to compete against Coca-Cola and increase revenue, Pepsi has diversified its businesses as I stated above into other markets such as snacks, chips, and breakfast foods, with its core business focusing on soft drinks. Undoubtedly, the company’s strongest and most identifiable brand is indeed Pepsi but it has a certain advantage over Coca-Cola since it is more diversified. On April 9, 2009, Coca-Cola Company reported cash and cash equivalent to be $6,816,000,000 and on December 26, 2009, Pepsi reported cash and cash equivalent to be $3,943,000,000.
Threat of New Entrants Both Coca-Cola and Pepsi-Cola has a high percentage of the market shares, respectively 15.3% and 8.8%, according to Exhibit 8. Exhibit 8 also shows their advertising spending, Coca-Cola with $234,000,000 and Pepsi-Cola with $136,000,000, both numbers from 2009. I believe this creates a huge barrier to new entrants, as Coca-Cola and Pepsi-Cola (now referred to as CC and PC) owns such a big share of the market and spends enormous amounts of money to keep their market shares. New cola products on the market will therefore be overshadowed by the reputation of CC and PC, and never gain enough market shares to survive amongst the “big players”. Product differentiation is a major part of new entrant’s struggle to gain market shares, much because of CC and PC’s strong brand name and consumers brand awareness.
Does foreign aid promote growth in Africa? Introduction The debate over aid effectiveness in Africa continues to be a contentious one at various international meetings. Despite being one of the world largest aid recipients, the African continent remains the poorest and most aid dependent. This is most visible in Sub Saharan Africa where one person in two still live under the poverty line (UN, 2008) notwithstanding the million of dollar received every year. By “foreign aid”, we refer to any financial assistance that is specifically given to help generate economic growth while “economic growth” describes a sustainable increase in economic activity capable to improve the lives of the majority of the citizens and measured as the annual percentage change in national income.
Total land area (equal to about 1,500 million hectares) farmed under cultivation today could be doubled, although an important consideration is that much of this new land would be expensive to develop. What really counts is the use of land. In many hungry countries, it is not unusual to find the best land developed to growing cotton, coffee, tobacco, soybeans and other export commodities diverted to urban uses, while only the worst land is used to grow food to feed the people. It sometimes make economic sense to encourage the production of cash crops, but a balance needs to be found to ensure that food needs are met. Some sources estimate that 20 million people die each year from hunger-related causes.
The continuous rising demand enforces the supply to increase in value and this is catastrophic for most African countries. In Asia it’s a similar story however at a later stage as majority of the rapid growth in population has occurred and now countries such as India and China have gigantic populations with both powerhouses exceeding 1.2 billion people as presented on figure 2. This in itself contributes heavily to food insecurity as the sheer number of people suggests major demand and so insufficient capacity to cope. Due to the rapidly increasing and already extremely high number of people there are other consequences that are tied in which relate to food insecurity, for example transport, dependent on how good, determines the level of distribution. Also literacy rates comes under this as greater number of children which suggests a very high demand for education which in some of these fast growing countries is a luxury and so implies lower literacy rates on average and so leads on to lower quality jobs and pay which therefore indicates dependent for food and not secure.