Perrier Research

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Perrier

Synopsis
Perrier, French mineral water, made apperance in a unique source with a long history. The Legend dates back to 218 B.C., Hannibal and his army set up camp on the site now known as “Les Bouillens” (French for bubbling), while on their way to Rome after the Spanish campaign. The Romans came later and were also the first to build baths at the site of the spring. Towards the end of the 18th century, Dr. Perrier took over the estate of Les Bouillens, which the Granier family had equipped with a bottling plant for mineral water earlier that century. Perrier was a respected physician and he wrote countless articles about the benefits of this mineral water, which he also prescribed to many of his patients. Oddly enough, it was an Englishman called Harmsworth who made Perrier world famous. He was also responsible for the development of the new distinctive bottle in 1903, the design of which was inspired by the Indian exercise clubs he used to stay in shape. Because of his acute business sense and good connections, Harmsworth managed to become the supplier to the British army in the then colony of India. This enabled him to reach many British subjects in due course. This success was followed by similar successes in England where Perrier even became the preferred water at Buckingham Palace. The Perrier source is complicated from a geological point of view. The source is situated to the north of the small town of Vergeze on the way to Nimes and is surrounded by limestone. The carbon dioxide used in Perrier does not come from the same borehole as the Perrier water; the two are combined at a later stage of the process.

Case Analysis

Strengths

• Well-know and positive reputation.

• Reliability

• Competent Research and development

• Good-looking Image in consumer’s eyes.

Weaknesses

• Higher price than other firms’ bottled water.

• Perrier’s bottles are not so handy to the buyers in a hurry.

• Too many label for each bottled product could make consumer confused.

Opportunities

• Constant growth of health-conscious consumers.

• Asian market is challenging to give a try.

• Advertising could play more role than ever if Perrier can be able to come up with new one.

Threats

• Other companies with cheaper bottled water are main challenge.

• Local companies’ products would always be a first option for local buyers over Perrier.

• Loyalty of buyers could change anytime if other companies can offer better price and so on.

The Five Force Framework

 
The Threat of Potential Entrants
Barriers to entry are relatively high since brand recognition is incredibly important. Additionally, larger firms experience significant benefits from economies of scope and scale, making it difficult for new entrants to match their operational efficiencies. Independent brands are able to find success in niche and local markets. Bargaining Power of Buyers

Depending on their buyer, buyer power can range from low to medium. Perrier represent roughly 20% of sparkling bottled water segment. However, these relationships are contractual so few changes can be made. Beyond this, other buyers of other products have low power because they are in their own market and strong brand names grant them pricing power in most markets. Bargaining power of suppliers

Supplier power for Perrier is medium. I believe that since there are several competitors in this market, suppliers can be persuaded by alluring proposition from other peer competitors. If the competitors can offer more interesting proposition than Perrier could, the situation could be changed dramatically. As a result, Perrier should has its own contract suppliers to supply products. Threat of Substitutes

The threat of substitutes is medium to high. If we consider solely on Perrier’s market , there are many competitive firms trying hard...
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