Alice is good at quickly breaking down the issues, here in economic terms. However, she struggles just a little to quickly, and correctly, offer a preliminary hypotheses.
Working off Kevin’s hints, Alice is able to determine why the gross margin changes and identifies a factor that can offset the decline in margins.
By examining KO’s fixed cost structure, Kevin helps Alice understand the difference in strategies for companies with different cost structures.
Using a set of graphs, Alice is able to correctly determine the strategies preferred by KO and the bottlers.
