Problems at Perrier

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Troubled Waters: Problems at Perrier


Perrier, a French company who produces sparkling mineral water, with once a promising future, is now struggling to stay relevant and turn reputable profits. This paper will address key reasons for the decline in regards to resistance of change from employees and management, and then propose strategic planning concepts to address identified resistances.

Change is Coming
In 1989, Perrier was at the top of their game and their employees were reaping the benefits with pay increases and additional vacation time. They worked less than forty hours a week, yet earned higher incomes than the industry average (Tomlinson, 2004). Then the winds of change came blowing in. Half of Perrier’s sales were generated from overseas sales to the United States; however, when minute traces of benzene (a gas) were detected in one of the imported bottles, sales rapidly declined. Struggling to stay afloat and with looming bankruptcy, they became a target for takeover by Nestlé - one of the largest food producing companies in the world, but more importantly, a successful bottled water producer.

Resistance to Change

"If you want to make enemies, try to change something." - Woodrow W.

Under new management, the Perrier brand remains to struggle with probability. They produce less product than either of Nestlé’s other two factories. Yet, attempts by management to make necessary changes are met with disdain from the employees; who majority of are under union contracts with the CGT. The General Confederation of Labour represents 93% of Perrier’s work force (Tomlinson 2004) and its members view actions taken by management as provocation, so they rise up to meet suggested changes with strong opposition. Yet are such closed-minded views helping their cause? Management forewarns that lack of cooperation and development is endangering the future of the Perrier brand and their attempts to communicate this need...
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