CR2 And Herfindahl-Hirschman Index: A Case Study

The Two-firm and Four-firm Concentration Ratios (CR2 and CR4) and Herfindahl-Hirschman Index (HHI) are methods in measuring market concentration. Both methods rely on determining the market share of each individual firm within a given market. CR 2 and CR 4 are calculated by adding the two and four largest firms’ market share. For instance, in a perfectly competitive market with 100 firms, CR4 will be 4×1/(100 ) =4%.

The HHI is calculated by taking the square of each firm’s market share and then adding all of these squared shares together. Markets in which the HHI is between 1,500 and 2,500 points are considered moderately concentrated and those in which the HHI is greater than 2,500 points are considered to be highly concentrated. While below

It characterizes the space occupied by a particular product in the minds of consumers to the product competitors. The product should be perceived a certain group of target consumers as having a clear image that differentiates it from competitors ' products. The position of the product directly affect the reputation and image of the company as a whole. Ranking product have to be based on estimates of the consumers in the market of a certain product, for selection of these parameters and elements of a complex product marketing standpoint that a targeted consumer product provide a competitive advantage. The price may be a key parameter for the purchase of beverage in considering of

Market segments help the company to improve their products and services, knowing needs of their customers and innovate new sectors. Coca-cola distribute their business in few operating segments which are Eurasia and Africa, Europe, Latin America, North America, Asia Pacific, Bottling Investments and Corpora. They markets the products selling into different market, such as Diet coke and Coke Zero. Coca-Cola uses the consumer segmentation criteria and market into different groups of behavioural, psychographic and profile. Coca-Cola creates value to its brands and with good performance to convince people to buy their products. The company heavily invested lots of capital to advertise the products all over the world. While earning good profit, innovation still one of the important strategies in Coca-Cola to gain more wealth. Different new products and packages could attract people to buy. For instance, to run a success business, a firm must know how to dissolve in different culture. Coca-Cola knows people from different culture, so they use their innovation to mix different cultures. Coca-cola came out with cans of Coca-Cola drinks with design of Chinese New Year during festive seasons to boost up their sales and celebrating festives with their customers. Coca-Cola focus more on market and work smart. Generally, comparing with old generation, Coca-Cola seems more popular in the younger groups. Besides, the company follows the mass marketing