Describe the market structure of the beverage industry. What will be

Describe the market structure of the beverage industry.

What will be an ideal response?

ANSWER

The beverage industry is a highly competitive one, which is experiencing rapid rates of growth due to changes in taste and preferences of the population. The change in demographics as well as in the socio-economic profile of the population is giving rise to the demand for new products which emphasize nutrition and low calories, as well as products which have a health benefit. There are two dimensions of this industry — the entire refreshment beverage market is monopolistic competition. However, if we focus only on firms that produce and sell carbonated soft drinks, then the market structure resembles more like an oligopoly.

In addition, firms in this industry will have to constantly find ways to differentiate their products by identifying niche market segments and working with health professionals and keeping up with changing demographics, and design products which meet the special needs of the targeted groups.