http://www.nytimes.com/2007/05/25/business/25drink.html?ref=business
"Coca-Cola Is Said to Buy Vitaminwater"--The New York Times
Last night, (Thursday, May 24, 2007) Coca-Cola approved a purchase of Glaceau, which makes Vitaminwater. That's a $4.2 billion trade in cash and stock. Glaceau is also known as the company Energy Brands, which Coke wants to buy to increase it's numbers of noncarbonated beverages since the recent surge of demand for these types of beverages. This coud be pretty big for Coke. Coke currently holds 43% of the soda market in US, while Pepsi holds a measely 31%. Pepsi had introduced a lot of noncarbonated beverages which may have helped, so Coke is on it's way to breaking new markets. Pepsi holds 50% of the noncarbonated beverage industry in the Untied States, while Coke only had 23%, which is why they are looking to buy more of these beverages.
Glaceau makes Fruitwater, an energy drink called Vitaminenergy and Smartwater, with electrolytes. Each bottle of Vitaminwater offers a new gift: Kiwi-Straberry guarantees "focus" and "healthy support for eyes and skin".
This is exciting stuff!!! So coca-cola is way behind in it's noncarbonated beverage market, and now they are vamping their portfolio with a whole slew of flavored water, Vitaminwater. This is great news. This is pretty typical of an oligopoly to buy up competitors, or in this case, to buy up products to compete. Pepsi has a big share of the noncarbonated beverage market in comparison to Coke, so it is great for Coke to buy up new companies to add to their stash of others. I'm sure we can expect to see changes in Vitaminwater's business style: i.e. more advertising, maybe changed labels and a new beginning for this beverage. Coke really is setting up to take over the world.
Friday, May 25, 2007
Sunday, May 20, 2007
Microsoft to Gain More Advertising
I read the article: Microsoft to buy aQuantive for US$6 billion from http://www.arnnet.com.au/index.php/id;1047992339. (It's an austrailian site, so they mention "US$" all the time). Anyway, the article discusses how Microsoft bid for this company called aQuantive, which is a digital marketing services agency. Microsoft is trying to increase the amount of technology and employees that they have available for internet advertising. They are trying to compete with Google, which they actually had a bidding war for a similar company, DoubleClick, about a month ago, but Google won the battle. But, with Microsoft's pending aquirement of aQuantive, it looks like Google may lose the war.
Microsoft intends to use this new company to set up advertising through the different online networks, including Windows Live and Xbox Live. There's also a rumor on the streets that Microsoft might have an interest in buying up Yahoo. This is a pretty importnat deal that Microsoft is making (the biggest one to day, as far as significance, not necessarily monetary value). Microsoft will be able to put display advertising on any site and will enhance the digital advertising aspect for the company.
I found this article very interesting. It basically sums up Microsoft being part of an oligopoly, and is really a good example to represent oligopoly by. In this article alone, we see that there is still sum lenience in entering and exiting market (Yahoo possibly being sold), there is variation in products (google is different than Microsoft), advertising is a main component of the oligopoly world, and oligopoly firms like to try and buy out competitors, (Yahoo), or in this case, additions to their firms (DoubleClick and aQuantive). I think it is interesting that there is som much money being spent on internet advertising, and it's good to observe all the different modes of influence (I forgot all about Microsoft and the affiliation with XBox Live), through technology. It is crucial for thiese companies to invest in programs to enhance their chances. This article evens says that Google and Microsoft had to compete and get firms like this or one of them wouldn't survive. Dog eat dog world out there in the oligopolic world....the saga continues.
Microsoft intends to use this new company to set up advertising through the different online networks, including Windows Live and Xbox Live. There's also a rumor on the streets that Microsoft might have an interest in buying up Yahoo. This is a pretty importnat deal that Microsoft is making (the biggest one to day, as far as significance, not necessarily monetary value). Microsoft will be able to put display advertising on any site and will enhance the digital advertising aspect for the company.
I found this article very interesting. It basically sums up Microsoft being part of an oligopoly, and is really a good example to represent oligopoly by. In this article alone, we see that there is still sum lenience in entering and exiting market (Yahoo possibly being sold), there is variation in products (google is different than Microsoft), advertising is a main component of the oligopoly world, and oligopoly firms like to try and buy out competitors, (Yahoo), or in this case, additions to their firms (DoubleClick and aQuantive). I think it is interesting that there is som much money being spent on internet advertising, and it's good to observe all the different modes of influence (I forgot all about Microsoft and the affiliation with XBox Live), through technology. It is crucial for thiese companies to invest in programs to enhance their chances. This article evens says that Google and Microsoft had to compete and get firms like this or one of them wouldn't survive. Dog eat dog world out there in the oligopolic world....the saga continues.
Friday, May 4, 2007
Don't give benefits to tax evasionists
I read the article, "Bill would bar payments to Medicare providers who owe taxes". http://www.battlecreekenquirer.com/apps/pbcs.dll/article?AID=/20070504/OPINION01/705040311/1014/OPINION
US Senator Carl Levin, and senator Norm Coleman are both trying to introduce a bill that will withhold payments to doctors and other health-care providers who treat Medicare patients but who still owe federal taxes. The two looked into an investigation that found that 21,000 health-care providers owe approximately $1.3 billion in taxes, but receive Medicare payments. So these two guys decided that if you don't pay your own taxes, you shouldn't get benefits from taxpayers. The two senators want to require hte Deparment of Health and Human Services' Centers for Medicare and Medicaid Services to participate in the Federal Payment Levy Program.
I think this makes sense. Doctors make pretty good money anyway, so they should just use their own darn money and their benefits to get the medical care they need. But I mean, if the local doctor in town wasn't paying his taxes, and then John comes in and needs a lot ofhelp and usually is covered by medicare/caid, then I think that John should save hismoney and get treated for free. Why should doctor get paid by the program he's not contributing to? I don't have anymore to say about this becasue it makes sense. But, I will say this has a lot to do with economics and the different kinds of taxing systems. Plus, Medicare/Medicaid is a mix between a public and common good. You definitly are seeing the free rider problem in this situation, becaue people are benefiting from the programs they don't contribute to.
US Senator Carl Levin, and senator Norm Coleman are both trying to introduce a bill that will withhold payments to doctors and other health-care providers who treat Medicare patients but who still owe federal taxes. The two looked into an investigation that found that 21,000 health-care providers owe approximately $1.3 billion in taxes, but receive Medicare payments. So these two guys decided that if you don't pay your own taxes, you shouldn't get benefits from taxpayers. The two senators want to require hte Deparment of Health and Human Services' Centers for Medicare and Medicaid Services to participate in the Federal Payment Levy Program.
I think this makes sense. Doctors make pretty good money anyway, so they should just use their own darn money and their benefits to get the medical care they need. But I mean, if the local doctor in town wasn't paying his taxes, and then John comes in and needs a lot ofhelp and usually is covered by medicare/caid, then I think that John should save hismoney and get treated for free. Why should doctor get paid by the program he's not contributing to? I don't have anymore to say about this becasue it makes sense. But, I will say this has a lot to do with economics and the different kinds of taxing systems. Plus, Medicare/Medicaid is a mix between a public and common good. You definitly are seeing the free rider problem in this situation, becaue people are benefiting from the programs they don't contribute to.
Tuesday, April 24, 2007
Tanning Price Discrimination
In addition to my job at Pizza Hut, I work at Madison Square Tanning. With prom season approaching, Ellen (who also works there) suggested that the company give discounts to high school students. Being economically savvy, the owners agreed that it was a good idea, and offered $5.00 coupons off any package for high school students.
This is a prime example of price discrimination. Since tanning for students is relatively elastic compared to adults (hopefully it is not an inelastic service for anybody), the company offered coupons to make it easier for the students. This is good business, too, because many of these students might not have come to our business/or continued service with us for a while because it is difficult for students to come up with $30 or more for a tanning package. We didn’t lose any money or customers, so everything from these coupons was a profit. Also, the students who are using these coupons who regularly tan there are experiencing a larger consumer surplus, because they will pay less than they were willing/had anticipated. However, this isn’t bad for the business, because the coupon is not that large, so the company is still operating with a bigger producer surplus.
Ok, so I got off topic here. Anyway, because of the elasticity of the service, there is price discrimination that works very well. It is the same as the airplane tickets. Business people travel during the week, and rarely on the weekends, so the tickets for week-only flights are more expensive because businessmen/businesswomen have a more inelastic need for the flights. In my scenario, businesspeople are to adults what family vacationers are to students. Anyway. If you are reading this and you’re by a window, and you look outside and think to yourself, “Wow it’s beautiful and warm and sunny out!” Do it. Get up and go outside and play Frisbee and have a picnic. If you’re at school, don’t even tell the teacher where you’re going. Just leave. (Just kidding, of course). And if you’re at home and you’re thinking to yourself, “Yeah right I have too much homework” take your homework outside with you….Enjoy the weather!
This is a prime example of price discrimination. Since tanning for students is relatively elastic compared to adults (hopefully it is not an inelastic service for anybody), the company offered coupons to make it easier for the students. This is good business, too, because many of these students might not have come to our business/or continued service with us for a while because it is difficult for students to come up with $30 or more for a tanning package. We didn’t lose any money or customers, so everything from these coupons was a profit. Also, the students who are using these coupons who regularly tan there are experiencing a larger consumer surplus, because they will pay less than they were willing/had anticipated. However, this isn’t bad for the business, because the coupon is not that large, so the company is still operating with a bigger producer surplus.
Ok, so I got off topic here. Anyway, because of the elasticity of the service, there is price discrimination that works very well. It is the same as the airplane tickets. Business people travel during the week, and rarely on the weekends, so the tickets for week-only flights are more expensive because businessmen/businesswomen have a more inelastic need for the flights. In my scenario, businesspeople are to adults what family vacationers are to students. Anyway. If you are reading this and you’re by a window, and you look outside and think to yourself, “Wow it’s beautiful and warm and sunny out!” Do it. Get up and go outside and play Frisbee and have a picnic. If you’re at school, don’t even tell the teacher where you’re going. Just leave. (Just kidding, of course). And if you’re at home and you’re thinking to yourself, “Yeah right I have too much homework” take your homework outside with you….Enjoy the weather!
Thursday, April 19, 2007
Microsoft is like Kleenex
http://www.theregister.co.uk/2007/04/19/microsoft_windows_xp_starter/
http://caribjournal.com/2007/04/19/microsoft-unveils-3-windows-xp-office-2007-package/
Microsoft has launhed ap lan that will help a suspected 5 billion people in dveloping countries through their new outreach program, "the Partners in Learning program". They have created a new software package entitled Microsoft Student Innovation Suite, which will be VERY cheap for students. This package includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0 (what is this?) Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail Desktop. This package must be puchased directly by 'qualifying governments' and supplied directly to students, which will begin in the second half of 2007. It is being sold for $3. The program, Partners in Learnign program is active in 101 countries currenlty, reahing more than 57 million students worldwide. I would like to know how they are supplying this directly to governments.
I think I am a little skeptial, it's only going to "qualifying governments", they are using old software (XP, not Vista) and seriously, $3? Sounds too good to be true, but who am I to judge....
So pretty much in these articles, we watch closely as Microsoft takes over the wrold for total domination. Microsoft, or rather packages similar to the ones offered by Microsoft (writing programs, presentation programs, database programs, etc. Which by the way, its hard to think of names for these programs besides the names we know and love brought to us by : Microsoft). Anyway, Microsoft and programs would be part of monopolistic competition because they have similar, yet different goods, and they are competing within the same market that is not THAT difficult to enter/exit. Microsoft, coming from a power hosue with lots of money, has enough profits each year to start selling packages for much cheaper so as to break into the poor students and indigent markets. This will open more doors up for Microsoft in the long run, regardless of the fact that they are selling cheaper products, they are now selling to consumers they did not have prior to the price reduction. I think that Microsoft is very smart to use this tactic, becasue they are lowering the prices so much they are making it difficult for other companies to compete, and they are seen as heroes because htey are doing good for more people in the world (YAY!). Anyway, since Microsoft is a big name, more people want this brand in the first name, because we don't think of it as word processing software, we think of it as Microsoft Word, becasue Microsoft is like Kleenex, the brand name has taken over hte product name.
http://caribjournal.com/2007/04/19/microsoft-unveils-3-windows-xp-office-2007-package/
Microsoft has launhed ap lan that will help a suspected 5 billion people in dveloping countries through their new outreach program, "the Partners in Learning program". They have created a new software package entitled Microsoft Student Innovation Suite, which will be VERY cheap for students. This package includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0 (what is this?) Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail Desktop. This package must be puchased directly by 'qualifying governments' and supplied directly to students, which will begin in the second half of 2007. It is being sold for $3. The program, Partners in Learnign program is active in 101 countries currenlty, reahing more than 57 million students worldwide. I would like to know how they are supplying this directly to governments.
I think I am a little skeptial, it's only going to "qualifying governments", they are using old software (XP, not Vista) and seriously, $3? Sounds too good to be true, but who am I to judge....
So pretty much in these articles, we watch closely as Microsoft takes over the wrold for total domination. Microsoft, or rather packages similar to the ones offered by Microsoft (writing programs, presentation programs, database programs, etc. Which by the way, its hard to think of names for these programs besides the names we know and love brought to us by : Microsoft). Anyway, Microsoft and programs would be part of monopolistic competition because they have similar, yet different goods, and they are competing within the same market that is not THAT difficult to enter/exit. Microsoft, coming from a power hosue with lots of money, has enough profits each year to start selling packages for much cheaper so as to break into the poor students and indigent markets. This will open more doors up for Microsoft in the long run, regardless of the fact that they are selling cheaper products, they are now selling to consumers they did not have prior to the price reduction. I think that Microsoft is very smart to use this tactic, becasue they are lowering the prices so much they are making it difficult for other companies to compete, and they are seen as heroes because htey are doing good for more people in the world (YAY!). Anyway, since Microsoft is a big name, more people want this brand in the first name, because we don't think of it as word processing software, we think of it as Microsoft Word, becasue Microsoft is like Kleenex, the brand name has taken over hte product name.
Sunday, April 15, 2007
pepsi this time around
http://today.reuters.com/news/articlebusiness.aspx?type=consumerProducts&storyID=nN26366190&from=business
Ok... So I was trying to find the article concerning either Coca-Cola or PepsiCo buying out some shares of Starbucks, but I couldn't find it. Anyway, in my search for this I typed in "Pepsi buys" in the Google News Search Engine through Archives, and it was amazing to look at all the different other companies that they hav ebought out. Mountain Dew, Juice Companies, Alcohol companies, etc. So, coming back to more current events, I took a look at Pepsi Buying out the juice company IZZE.
IZZE has beverages like sparkling apple and sparkling grapefruit, and other fruity sparkling juices. Pepsi wanted to buy this company to have an alternative to their soft drinks, and an alternative to the sugary drinks they own (appealing to the masses, people tha tdon't like soda, diabetics/dieters, etc). The drinks are all cafeine free and the sugarsd are from fruit juice, not refined sugar. This article goe son to say tha tPepsi was looking to add it to the list of different options, like Tropicana, SoBe, energy drinks, Aquafina, and the joint ventures (at that time anyway, now I think they really did make this deal) with Starbucks and Lipton iced Teas. On the day of these discussions/deals, the PepsiCo shares rose 13 cents.
So we all know that Pepsi and Coke are part of an oligopoly for soft drinks. Well actually, it's pretty much those two taking this over. But essentially, they operate on the oligopoly/monopoly levels, using characteristics from both since they are both so big. They clearly like to buy up competitors, but they also buy up smaller companies, like IZZE so they can monopolize the drink market but so they can COMPETE with the other member of hte oligopoly. It's much more difficult to enter this market, becuase it is hard to compete with such monstrous coroporations, but in this case, I don't think it would be as difficult to leave the market because if Pepsi wanted to leave the market, Coke would probably jus tbuy them up. But that would create a monopoly, and I'm not so sure how the governmen would feel about that. Oh that darn Pepsi. THey also bough the Naked drinks in 2006, as well. But in comparison, when you look ups Coke buys, you turn up just as many results for drink companies that Coke bought. I find it interesting that there is an article about Pepsi buying Tropicana from Seagrams back in like, 1998, and that likewise, there is an article about Coca-Cola buying Seagrams mixers drinks....So they broke apart a drinking company and each took a piece.
Ok... So I was trying to find the article concerning either Coca-Cola or PepsiCo buying out some shares of Starbucks, but I couldn't find it. Anyway, in my search for this I typed in "Pepsi buys" in the Google News Search Engine through Archives, and it was amazing to look at all the different other companies that they hav ebought out. Mountain Dew, Juice Companies, Alcohol companies, etc. So, coming back to more current events, I took a look at Pepsi Buying out the juice company IZZE.
IZZE has beverages like sparkling apple and sparkling grapefruit, and other fruity sparkling juices. Pepsi wanted to buy this company to have an alternative to their soft drinks, and an alternative to the sugary drinks they own (appealing to the masses, people tha tdon't like soda, diabetics/dieters, etc). The drinks are all cafeine free and the sugarsd are from fruit juice, not refined sugar. This article goe son to say tha tPepsi was looking to add it to the list of different options, like Tropicana, SoBe, energy drinks, Aquafina, and the joint ventures (at that time anyway, now I think they really did make this deal) with Starbucks and Lipton iced Teas. On the day of these discussions/deals, the PepsiCo shares rose 13 cents.
So we all know that Pepsi and Coke are part of an oligopoly for soft drinks. Well actually, it's pretty much those two taking this over. But essentially, they operate on the oligopoly/monopoly levels, using characteristics from both since they are both so big. They clearly like to buy up competitors, but they also buy up smaller companies, like IZZE so they can monopolize the drink market but so they can COMPETE with the other member of hte oligopoly. It's much more difficult to enter this market, becuase it is hard to compete with such monstrous coroporations, but in this case, I don't think it would be as difficult to leave the market because if Pepsi wanted to leave the market, Coke would probably jus tbuy them up. But that would create a monopoly, and I'm not so sure how the governmen would feel about that. Oh that darn Pepsi. THey also bough the Naked drinks in 2006, as well. But in comparison, when you look ups Coke buys, you turn up just as many results for drink companies that Coke bought. I find it interesting that there is an article about Pepsi buying Tropicana from Seagrams back in like, 1998, and that likewise, there is an article about Coca-Cola buying Seagrams mixers drinks....So they broke apart a drinking company and each took a piece.
Sunday, March 4, 2007
Addidas or Nike
Definitly Addidas. I read the article Nike Challenges Addisas on its Own Turf at http://www.msnbc.msn.com/id/17282642/ In this article, I read that Addias is a German brand that has payed the German Soccor Association to play with Addias equipment and shoes since the year 1954, but Nike comes in all high and mighty and says they'll pay the association 49 million dollars more a year than Addias pays. Addidas currently pays the German Soccer Federation $14 million dollars and Nike says they'll pay $63 million a year. And they are going to the 'table' to discuss all this, which means they might start bidding. I think this is pretty dumb, quite honestly. They are paying major money for these people to wear their shoes in the biggest sporting event in that country, but still. It's ridiculous. But really, they are being very smart. Nine months after German hosted the 2006 Socccer World Champiionship, the birth rate had increased (positive thing) by 10-15%, the GDP grew 2.7 % and Addidas shares were rising as well. I think this is very interesting. Why is all this being affected by a soccer game? Well.... the birth rate sounds like a baby boomers kind of story (everybody's happy....nine months later there are a bunch of rugrats). I guess all of htis makes me upset becaue I love Addidas. And Nike is such a MONOPOLISTIC Economy. Direct quote here, "Our goal is to dominate the [soccer] brand by 2010," Nike marketing vice-resident Trevor Edwards told Business week.' Well, that doesn't sound at all dominating or scary. Anyway, as of now, the Germans haven't made a decision. They'll discuss it on March 9th.
This really relates to economomics because it is discussing a monopolistic economy. But more importnatly it is showing the impact that marketing can have on the quantity demanded. After all, we see in this article that after the Soccer World Championship, wheere the Germans were wearing their Addidas kicks, the sales for Addidas in that country rose as well. What I think is most interesting, is that the quantity supplied to the Soccer association will really dictate the quantity demanded in a different way than normal. normally, the more that is supplied in the MARKET, the less demand there is for the product, and the less supplied in the MARKET the more demand. In this case, the more soccer players inthe association that are wearing the shoes, the more the people want the product. Now, I know that the quantity supplied I am talking about is not in the market but rather in the marketing, but it's interesting to think about this. I suppose this happens a lot though. The more often you see a commerical on TV for something, the more you will want that product....so what do you think....Addidas or Nike? Is Nike trying to become the next Hitler? And Will the German Association take the Nike's SWEET deal or stick to tradition?
This really relates to economomics because it is discussing a monopolistic economy. But more importnatly it is showing the impact that marketing can have on the quantity demanded. After all, we see in this article that after the Soccer World Championship, wheere the Germans were wearing their Addidas kicks, the sales for Addidas in that country rose as well. What I think is most interesting, is that the quantity supplied to the Soccer association will really dictate the quantity demanded in a different way than normal. normally, the more that is supplied in the MARKET, the less demand there is for the product, and the less supplied in the MARKET the more demand. In this case, the more soccer players inthe association that are wearing the shoes, the more the people want the product. Now, I know that the quantity supplied I am talking about is not in the market but rather in the marketing, but it's interesting to think about this. I suppose this happens a lot though. The more often you see a commerical on TV for something, the more you will want that product....so what do you think....Addidas or Nike? Is Nike trying to become the next Hitler? And Will the German Association take the Nike's SWEET deal or stick to tradition?
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