Bottled Water Industry

GCSE Science

Case #1

Competition in the Bottled Water Industry

Submitted to:

Mr. Ahsan Durrani

Submitted by:

Geeta Khiani

TABLE OF CONTENTS:

INTRODUCTION

ANALYSIS

GENERAL ENVIRONMENTAL FACTORS (P.E.S.T)
INDUSTRY’S DOMNINANT TRAITS
ATTRACTIVENESS OF THE INDUSTRY

(BASED ON PORTERS 5 FORCES MODEL)

STRATEGIC GROUPS IN THE INDUSTRY
INDUSTRY DYNAMICS
DRIVERS OF CHANGE IN THE INDUSTRY
KEY SUCCES FACTORS
COMPETITVE PROFILE MATRIX

CONCLUSIONS AND RECCOMENDATIONS

Introduction:

This case study discusses bottled water industry of U.S. It discussed about the global sales of bottled water industry in 2001 and annual growth average between 1996 and 2001. The growing popularity of bottled water industry in the United States was attributable to concerns over the safety of municipal drinking water, an increased focus on fitness and health and the hectic on-the-go lifestyles of American consumers. The factors like convenience purity and portability of bottled water provide natural solution to consumer’s dissatisfaction over the tap water. There was an increase in industry volume and dollar sales as a result for the introduction of PET containers which satisfied the needs of convenience, portability and finally purity which would make the bottled water industry very attractive. An increased emphasis on healthy lifestyles and improved consumer awareness of the need for proper hydration led many consumers to shift traditional beverage preferences toward bottled water. Bottled water industry nature of competition was fierce competitive rivalry and it was dominated by a few international food and beverages producers like Coca-Cola, PepsiCo, Nestle and Groupe Danone. Per capita consumption in 2002 fell substantively below consumption rates in Western Europe, Middle East, and Mexico. Also the per capita consumption in United States was also lagged by a wide margin of soft drinks. There are top 5 leaders of bottled water brands of 2001 which consists of PepsiCo, Coca-Cola, Nestle Waters, Groupe Danone and final Crystal Geyser. The top leader in brand is Aquafina by PepsiCo which has a market share of 10% as compared to other competitors. The top 9 companies who are considered the leading U.S. Bottled Water Producers of 2001 was Nestle Waters with a market share of 32.5%.

General Environmental Factors

Political and Legal Factors:

1. Environmental Protection Agency (EPA) and Food and Drug Administration (FDA)

Bottled water produced in United States was required to meet the standards of both the EPA and U.S. Food and Drug Administration.

Present Impact

Companies are producing bottled water according to the standard of EPA and FDA.

Future impact

In future the sale of bottled water will increase because of meeting the standards..

2. Inspection by state agencies

Bottled water also regulated by state agencies that conducted inspections of bottling facilities and certification of testing facilities to ensure that water is save to drink.

Present Impact

Companies are inspected by State agencies.

Future impact

People will more aware more about safety of bottled water.

3. FDA’s Standard of identity

It is required for bottlers to place the source of water on their product’s labels.

Present Impact

Consumers check the information on labels.

Future impact

Awareness about source will increase in near future.

Socio Cultural Factors:

1. People awareness about health

Awareness of people about bottled water is increasing due to high advertising in television.

Future impact

Sales of bottled water will increase in future because of advertising.

2. Life style

The popularity of bottled water in the United States has increased. People are now more focused on fitness and health.
Because of portability of bottled water, people are switching from tap water to bottled water.

Future impact

The use of bottled water will increase in future.

Economical Factors: