The Economic Environment of Business

You are required to analyse the UK carbonated soft drinks market and should answer the questions below. Each question states the mark allocation, indicating the importance of each question. 1. You should do about 100 word introduction to your project. [5 % of marks] 2. Outline the trend in sales of the leading manufacturers in the UK carbonated soft drinks market over the last 5 years, and analyse the structure of the market for the whole UK carbonated soft drinks industry. To do this, you should; ? identify the main manufacturers or companies who produce carbonated soft drinks in the UK and their market shares (you may get up-to-date data from sources such a Mintel and Keynote). ? explain what type of market structure exists, with supporting evidence. ? comment on barriers to entry in this market. ? explain, using economic theory (a diagram), how price and output is determined for a soft drink product/brand by a typical firm (i.e. one soft drink manufacturer) which is operating in the market. (Note that your market will be imperfect competition, not perfect competition. Thus, you cannot use supply and demand diagrams in this question). [25% of marks] 3. (a) The British government recently introduced a tax on sugary drinks; using economic theory (diagrams), explain the effects of this policy on producers and consumers of soft drinks in the UK. (b) Give 3 examples of how a carbonated soft drink manufacturer may use non-price competition to increase sales. [20% of marks] This document is for Coventry University students for their own use in completing their assessed work for this module and should not be passed to third parties or posted on any website. Assignment Brief Template Page 3 of 8 4. (a) On a chart, show what has happened to the UK pound (sterling) against the US dollars between the 1st June 2016 and the 1st June 2018. Using economic theory (a diagram) explain the reasons for any significant changes in the sterling exchange rate. (b) Using a simple numerical example, explain how a depreciation of the pound may affect the UK carbonated soft drinks industry. [25% of marks] 5. (a) Identify the possible impact on carbonated soft drinks manufacturers, who are located in the UK and export to the European Union (EU), if the UK does not reach a trade agreement with the EU following Brexit. (b) With the aid of aggregate demand and aggregate supply diagram, explain how a higher inflation may possibly lead to a recession or slower than expected economic growth in the UK. [20% of marks]. 6. As part of your conclusion, assess the future of carbonated soft drinks manufacturing in the UK. Do you anticipate future growth, stagnation or decline? [5% of marks] TOTAL MARKS = 100