Competition in the Bottled Water Industry Essay

d. Demographics (what is the industry’s focus customer) Another significant trend is product marketing and packaging. Realizing that consumers cite taste, quality, and purity as the top reasons for drinking bottled water, bottlers market and design bottles to display their purity. Other manufacturers seek to carve out a new level in the bottled water industry introducing high-end products. Another packaging trend in the bottled water industry is multi-packs. As current bottled water consumption grows, more consumers are turning to multi-packs to save time and money.

The industry is defined as the Domestic US Express Mail industry. This includes overnight and second day delivery. In order to assess the attractiveness of the industry, a Porters' Five Forces analysis has been conducted as follows.

Entry Barriers: Both Coca-Cola and Pepsi have strong entry barriers for new competitors, especially in high-end markets like the US. Because of the two companies’ sizes, market maturity, and good market position, many barriers exist for new entrants.

The total market demand over the life of the exercise could be less or more than the potential demand projected in the end user profile. What is the most important factor in determining actual demand?

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

From helping the daily jogger stay hydrated during a run to that mom and family trying to stay hydrated at the amusement park, bottled water has had a lot of good to it. However do those goods outweigh the bad? In “Bottled Water: Friend or Foe?” by Christopher Castillo, Diana Goettsch, Angela Reid, and Catherine Sterling argue bottled water are our worst enemy, reasons being the bottle itself has harming chemicals within it which we are drinking, bottled water damages our environment, and lastly we are spending more on bottled water when we have the same water coming from our sinks.

In Peter Gleick’s “Selling Bottled Water: The Modern Medicine Show” and Cynthia Barnett’s “Business in a Bottle”, bottled water is argued to be an excessive commodity falsely advertised as healthier and more beneficial than tap water to society and the environment. Both authors discuss that bottled water is actually equivalent in quality to tap water and in some cases even more hazardous to the human body. Public water itself is a less expensive resource that is more accessible to the masses. However, due to fraudulent companies focused on profit and the lack of effective oversight, people are deterred from realizing that there does not need to be an alternative to municipal water. Gleick

Since most of buyers are small (residential and small business users), they do not have much buyer power. Big

and Pepsi Co dominate the industry with their strong brand name and great distribution channels. In addition, the soft-drink industry is fully saturated and growth is small. This makes it very difficult for new, unknown entrants to start competing against the existing firms. Another barrier to entry is the high fixed costs for warehouses, trucks, and labor, and economies of scale. New entrants cannot compete in price without economies of scale. These high capital requirements and market saturation make it extremely difficult for companies to enter the soft drink industry; therefore new entrants are not a strong competitive force.

Believed it to be of superior taste and some used it for daily activities like making food, brushing teeth, washing face, drinking water for their pets, etc.…

Bottling Network: Both Coke and PepsiCo have franchisee agreements with their existing bottler’s who have rights in a certain geographic area in perpetuity. These agreements prohibit bottler’s from taking on

“One of the biggest challenges facing the bottled water industry is how to respond to the environmental claims levelled against it” (Grocer). Every time someone throws a bottle away, they have taken up more space in a landfill for the next four hundred fifty to one thousand years. Besides the long decomposition rate, water bottles are the cause of several more environmental issues. Overfilling landfills, health hazards caused by refilling, and the economic stresses due to the constant and inconvenient repurchasing are just a few of the negatives water bottles have on us. These plastic pollutants are doing more harm to both the environment and their users than good.

Highland Spring is the UK's largest producer of bottled water. On its website, Highland Spring advertises: "We've been drawing our natural spring water from the same protected land in the Ochil Hills, Perthshire, Scotland since 1979. But the special rock formations below, which make Highland Spring as pure as can be, are the same today as they were 400 million years ago" (About us, 2012, Highland Spring). The company stresses both the 'oldness' of its brand and also its Britishness, given the connection it has to Scotland, the British Isles in general, and rock formations that have existed for millions of years. "In 1503, King James IV of Scotland announced that the local beer, made with water drawn from the same land as Highland Spring, was to be his Coronation Ale" (About us, 2012, Highland Spring). Highland Spring also capitalizes upon organic trends in its marketing, stressing that all of its water is certified organic and that the company is careful to preserve the environment in the way in obtains its water. "An extraordinary 15 years trickling its way through the basalt" is required to make the perfect water (About us, 2012, Highland Spring). This paper will use two common marketing rubrics SWOT (strengths, weaknesses, opportunities, and threats) and PESTLE (political, economic, social, technological, legal, and environmental positioning) to analyze the

Bargaining power of suppliers. Suppliers have the ability to leverage, control, and negotiate the cost of their products (Hill et al., 2015, p. 56). In the case of the suppliers of the office supplies industry, more so for Staples, the bargaining power is weak and is considered to be low. The reason for its power being weak is a result of large companies having several suppliers that will easily compete against each other to provide the lowest cost of products.

- Suppliers’ bargaining power: The company does bargains with the suppliers, suppliers are first carefully selected by carrying out bidding then a fixed price is set by multi consent then material is provided by the supplier.