Economics :: essays research papers

Coca - ColaOn the 14th of June Coca-Cola&8217s soft drinks were banned from the markets in Belgium and posterior also in Luxemburg and France. Two failures in the bottling system were the cause for the nausea that the people suffered. According to the article it would have been better if they would have acted degenerate and told the whole truth. Coca- Cola is in an ologopolistic market and therefore branding plays a great role. It is possible that the company ha lost market shares, due to this accident. In the ologopolistic market the firms don&8217t compete with price, but rather with advertising and other non-price strategies. Therefore one cornerstone predict that this scandal has shifted the demand thread to the left. This accident can be seen as a negative externality. The government should make Coca Cola increase their health controls (internalise their externalities), if scandals of this sort happen again. They can enforce this by either subsidies (reward) of in this cas e taxation (punishment). People who would usually only buy Coca Cola due to the heavy advertising might try a substitute during the time of the ban. This can be seen as a sort of free promotion for the others in the market. According to the zip fastener sum game, the retire that Coca Cola is making right now is directly proportional to the profits the other firms are making in the prize market. Coca Cola impart need to take further actions to restore their brand name that they have established throughout all these years. This will significantly influences their total added costs. A strong brand has very few goods substitutes and it is very difficult for competitors to challenge the supremacy of the brand. This health scandal might have clear the doors fro new competitors. In the long run this can lead to Coca Cola&8217s costs for advertising to increase or furthermore they could lose control of the market and fall into a disequilibrium. The accelerator theory suggests that the level of planned investments varies with the rate of change of income or output rather than with the rate of interest. It will be hard for the big American company to fulfil their expectations of expansion in Europe with no investors being pleased with their progress.Best Foot transport at ReebokOn October 18th Reebok published a 41 page report on how it is dealing with its workers in Indonesia.