Soda Industry Is an Oligopoly

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Soda Industry is an Oligopoly Cynthia McLaughlin 10:10-12:10 The soda industry is most definitely characterized by the term oligopoly. An oligopoly is a market run by a few large and powerful firms. Oligopoly companies depend on each other, one decision affects the other companies directly. In the soda industry, there are three major competitors dominating the industry, along with other cheaper “off-brands”. For my research on the topic, I went to a soda aisle at Kroger, off of Ridge Road in Heath, TX. There are four aisles dedicated to soft drinks at this location. Each aisle is fifty two feet long, totaling with a whopping two hundred and eight feet designated to soft drinks. There are a few ways to break down all of this space in the soft drink area. One way to do so is to separate the space into the generic soft drink flavors. There are four major soft drink flavors: colas, lemon-lime, root beer, and fruit flavor. In linear feet, the amount of space devoted to the colas was one hundred four feet. This translates into approximately 50% of the total soft drink area, only designated to colas. The next flavor, lemon-lime, takes up thirty nine linear feet. The lemon-lime sodas took up approximately 19% percent of the designated soda area. Root beer had taken up a much smaller area. This flavor only took up twenty five linear feet, 12% of the soda aisles. All of the flavors remaining were fruit flavored. Of all the fruit flavors, forty linear feet was taken up, or 19% of all of the space. Another way to organize this large space is exactly how this grocery store organized it, by brands. I have already mentioned the ruling brands in the soda industry, Pepsi, Coca Cola, Dr. Pepper, and then the cheaper “off-brands”. Coca Cola takes up the greatest amount of space, being the most successful in the soda industry. The Coca Cola products

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