Bottled water

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  • Publicado : 22 de febrero de 2011
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1. General features of the business environment and key issues in the case.
First of all, we have to say that this is a very concentrated industry, with 4 principal competitors in which 2 arealready consolidated, Nestlé and Danone.
The competence is practically between these two companies, at a worldwide level.
This market is known because of its growth rate, especially in the last decades,and this is because of 3 reasons:
* Is a quality and healthy product
* Increase of a negative way to see the other non-alcoholic drinks, they are too sweet. (Juice, energy drink, sodas)* Increase in the demand of bottled water in emerging countries. Basically because it is cheaper to buy this product rather than repair the actual network system of distribution.
As a consequence ofits concentration, the entrance barriers are very high, mostly due because of the great investment in advertising and the elevate cost of operating a source. Also, for the reason of the good positionthe brands have in the market about the consumers mind.
There are 3 types of bottled water:
* Natural mineral water (2/3 of the water sales in France)
* Spring Water (Cheaper than mineralwater in its manufacturing)
* Table Water (Tap water)
Here is a chart that shows the market share of each one of the most important industries.(Imported graph from the text)
Each company has a different participation according to the area they are, and this is because of the diverse requirements and preferences theyhave. For example, USA gives more importance to price than quality and in Europe is the other way around.
The key issues in the case are:
* The way the companies expand and gain market share.* The segmentation of each one of them, where they have more presence and force.
* How to enter and maintain in a new geographical area.
* The multi-site concept
* How they manage to...
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