Economics :: essays research papers

Coca - boobyOn the 14th of June Coca- skunk&8217s soft drinks were banned from the merchandises in Belgium and later also in capital of Luxembourg and France. Two failures in the bottling system were the cause for the nausea that the people suffered. harmonize to the article it would shit been better if they would have acted fast and told the whole truth. Coca- dumbbell is in an ologopolistic market and therefore branding plays a great role. It is contingent that the company ha lost market shares, due(p) to this accident. In the ologopolistic market the firms don&8217t compete with price, but rather with advertising and some otherwise non-price st aimgies. Therefore one can predict that this scandal has shifted the demand shorten to the left. This accident can be seen as a negative externality. The presidential term should make Coca Cola increase their health controls (internalise their externalities), if scandals of this sort surpass again. They can enforce this by eithe r subsidies (reward) of in this case revenue enhancement (punishment). People who would usually only buy Coca Cola due to the heavy advertising might try a substitute during the duration of the ban. This can be seen as a sort of free furtherance for the others in the market. According to the zero sum game, the slip that Coca Cola is making right now is directly proportional to the profits the other firms are making in the respected market. Coca Cola give 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 gainsay the supremacy of the brand. This health scandal might have opened the doors fro juvenile 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 disequi librium. The accelerator theory suggests that the direct 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 process their expectations of expansion in Europe with no investors being pleased with their progress. outmatch Foot forward at ReebokOn October 18th Reebok published a 41 page report on how it is dealing with its workers in Indonesia.