Monopolistic Competition in Relation to Innocent Drinks

Introduction
Innocent Drinks is a corporation that operates in the highly competitive beverage industry. Smoothies are some of Innocent's essential product in the market. The Innocent smoothie comprises of entire squashed leafy foods, yet different fixings, for example, carrots and ginger have been utilized as a part of a few beverages. Guiltless likewise makes smoothies, natural product tubes and juice for children; a not-from-concentrate juice range; noodle pots and veg pots and a scope of prepared dinners. As such, Innocent Drinks Company launched another scope of 'super smoothies' in March 2014. The fact that the company operates in the competitive global beverages market exposes it to stiff competition posed by Coca-Cola that owns 90 percent of Innocent drinks, Tropicam products, Peppersmith, Pepsi, Michel et Augustin, and many more other competitors in the monopolistic global beverage industry that has many producers with differentiated products in the market. The aim of this paper is to discuss Innocent Drink’s competition in the smoothies market and examine its mode of operation.

Monopolistic Beverage Market Competition
Monopolistic market competition is a business structure that several business entities described as comparable yet indistinguishable, and, as a consequence, firms compete on different elements other than cost (Rothbard, 2013). The monopolistic rivalry is at times alluded to as defective rivalry because the business sector structure is between unadulterated syndication and perfect competition. In all cases, monopolies dominate the entire market with over seventy percent market share. However, Innocents Drinks is not a monopoly.

It is worth noting that monopolistic market competition exists when an extensive number of dealers, with a little piece of the pie, little relationship among firms to value their item with little respect regarding how the opposition will respond and where there is minimal possibility for the agreement to settle costs or prices. Notably, firms exercises control over cost; however, it is restricted by the nearby substitution of the product that is traded in the market.

Product Differentiation
One of the characterizing qualities of a business is that there is a lot of non-value competition. Firms might compete in the market without a real cause because they determine both market share and product costs. This implies that product differentiation is the key aspect for any monopolistically focused firm. Item separation is the procedure of recognizing an item or administration from others to make it more appealing to meeting the respective objective of the business.

Advertising or product differentiation is the procedure of depicting the contrasts between products. It is done keeping in mind the end goal to show the distinct parts of a company's product. In financial matters, effective

Consider an hypothetical economy in the short-run with fixed prices...