Competition in the Bottled Water Industry in 2006

Name: Nguyen Dinh

SID: 010551682

MGMT 425

Case Study #1

Date: 10/02/15

Competition in the Bottled Water Industry in 2006

Bottle water is one of the most attractive industry in the beverage categories. One of the reason for this industry so attractive is because people can’t live without water. Bottle water had been widely consumed in Western Europe and Mexico since 1990s. At that time, bottle water in the US is consider of novelty or prestige product. Since 1990s this product had grown in popularity and had allowed the US to become one of the largest market for bottle water. In 2004, the United States bottled water market generated total revenues of $6 billion, representing a compound annual growth rate (CAGR) of 8.2% between 1999-2004. The Rivalry of the US bottle water turn out to be Coca-Cola, Nestle, PepsiCo, and other small regional seller.

As mention above for the rivalry Nestle, Coca-Cola (Danone), and PepsiCo are always on the top for compete with each other. By acquiring many smaller regional brand, Nestle has become the world largest seller of bottle water. Nestle compete with other brand by offered the price for 24 pack of bottle water degree decrease every year with $5.89 in 2003, $5.17 in 2004, and $5.10 in 2005. While PepsiCo price is not constant going up and down from 2003 to 2005. However, it price show that it still doing better than Coca-Cola (Danone) with the price going up and down with a huge number and it still more expensive than Nestle, and PepsiCo; $5.80 of Coca-Cola in compare to $5.10 of Nestle and $5.01 of PepsiCo in 2005. So, it’s clear that Nestle is the Strongest, and come in second is PepsiCo, and last is Coca-Cola. The market share in 2006 also so that Nestle is leading the US market with 30.5%, and PepsiCo in second with 13.8% and come in last is Coca-Cola with 11.9%.

Buyer Power in bottle water industry is consider to be moderate. Strong brand like Nestle, PepsiCo, Coca-Cola (Danone) is favored by the retailers....