Investigating the Soft Drink Industry
I. Go to www.nsda.org. Once there, double click on "About Soft Drinks". Click on the subtitles to search for the following information:
1. In 1998, how many gallons of soft drinks per year did the average American consume? The whole country consume?
2. What percentage of beverages sold in the US are soft drinks?
3. How many dollars of soft drinks were sold in the US in 1997?
II. Go to www.beverage-digest.com. Click on subtitles to find the following.
1. Which three companies have the largest market share? What percentage for each?
2. What is the concentration ratio for the soft drink industry?
3. Which three brands have the largest market share? What percentage for each?
4. Record a few other statistics about the top ten companies and/or brands that help you understand the current status of the soft drink market.
III. Go to www.pepsico.com or www.cocacola.com/co or elsewhere on the Web to find what other products besides soft drinks that these 2 companies make and sell.
IV. Investigate another industry to find out what companies and brands have the largest market share? Find answers to Section II above for that industry. Some industries to consider are: auto, aircraft, fast food, soap, blue jeans, snack food, tire. You will need to search the Web.
Recommended search strategy: Go to www.yahoo.com. Click on "Business and Economy" section. Enter "[name of industry] industry association" into the search box and hit 'return' on the keyboard. Scroll through search results looking for a national association for that industry, such as the National Soft Drink Association that was used in Section I. Go to website and investigate!
V. Extra Time: Try to find the brands of the top 2-3 companies both in and outside your selected industry.
Discussion/Study questions: Is bigger better?
1. What form of business are Pepsi and Coca Cola? How does that contribute to their size?
2. What type of market structure is the soft drink industry?
3. What are the advantages of having a few large companies dominate an industry? disadvantages?
4. What allows large companies to keep prices low? What makes it hard to keep prices low?
5. Are Pepsi and Coca-Cola conglomerates? How so?