Competition in Bottled Water Industry

Topics: Water, Bottled water, Drinking water Pages: 4 (910 words) Published: November 30, 2008
Economic Characteristics
Market size and growth rate
The fastest-growing and most attractive beverage category in the world. Global sales exceeding 38 billions gallons in 2003
Annual growth rate more than 10% between 1998 and 2003
U.S. is the world’s largest market with annual sales nearly 6.4 billions gallons. Opportunities for increasing market share become lesser as currently in the early maturity stage

Number of buyers
Buyers included consumers, supermarkets, natural food stores, whole-seller, convenience stores and restaurants etc. Large pool of buyers but no one accounts for a significant fraction of overall market demand.

Degree of product differentiation
Various types, such as natural mineral water, spring water and purified water etc. Products could be identical.

Buyer needs and requirements
Due to the concerns over the safety of tap water.
An increased focus on health and fitness.
The hectic on-the-go lifestyles of American consumers.
Attracted by the convenience, purity and portability.

Number of rivals and scope of competitive rivalry
Dominated by Nestle, Danone, PepsiCo, Coca-Cola and many small regional sellers. The four largest producers have accounted for 34% of worldwide bottle sales in volume. Nestle became the global leader in this industry.

Product innovation
Introduction of enhanced water or functional waters.
Market for enhanced waters is expanded.
Enhance waters offered higher margins.

Competitive Forces Analysis
Rivarly among Competing Sellers
Oligopoly market and characterized by fierce competitive rivalry. Established sellers jockeyed for market share and volume gains. Use price cuts to boost unit volume such as discounted 12-24-bottle multi-packs. World’s largest sellers have acquired small regional sellers to gain footholds. Some entered into strategic alliances and joint venture agreements to strengthen their positions. Introduction of innovative product variations of enhanced waters.

Threat of...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Competition in the Bottled Water Industry Essay
  • Essay on Competition in the Bottled Water Industry
  • Essay about Competition in the Bottled Water Industry in 2006
  • Bottled Water Industry Essay
  • Bottled Water Industry Analysis Essay
  • Essay on Bottled Water Industry Analysis
  • Competition in the Bottle Water Industry Essay
  • Essay on Competition in the Bottle Water Industry

Become a StudyMode Member

Sign Up - It's Free