Porter’s Five Forces Analysis:
Buyer Power
Buyers in this market consist of mainly “food and beverage” retailers. This includes smaller establishments like cafes, bars and restaurants to larger retailers like convenience stores, supermarkets and independent retailers. The larger companies tend to have more bargaining power due to the volume of product they desire but this is largely offset by the amount of buyers in the market. On top of this is the fact that retailers are influenced in their buying decisions as they need to cater for their customer’s preferences. As a consequence it’s super important that bottled water companies build a strong brand focusing on brand loyalty in order to tip the scale in their favor when it comes to buyer/supplier …show more content…
Having said that the opportunity for innovation around the product is limited so this means they would be offering something similar to what is already available for consumers and in doing so coming up against some majorly established brands. This would decrease the likelihood of new entrants. Working with a bottler would already be established but finding a new “unique” source of water could be a challenge if they choose that as an option instead of purifying tap water. Also although there is a smaller amount of companies within the industry there are a substantial amount of brands making it difficult to capture a profitable amount of market share.There is a lack of intellectual property and the source of the water has become of greater importance, giving the product a “uniqueness” which both serve to increase the chances of new entrants although the government regulations enforced on both the purification process and the environmental restrictions serve to deter new …show more content…
Assessment: Threat of new entrant is Moderate.
Threat of Substitutes For the retailer the threat of a substitute is not tap water, but CSD’s or other non-alcoholic beverages. There is a huge inventory of available alternatives targeting all types of consumer tastes ranging from coffee or tea to juice or soda. These threats are readily available and usually positioned next to water in both retail stores or on a menu. For the end consumer it would be tap water and this definitely comes into play during a down time in the economy on either a personal or a societal level. The relatively low cost of water and their substitutes means switching would incur minimal costs.
Water is widely considered the healthiest option with no calories so it mitigates it’s threat to some degree although there is a real push to move away from bottled water and back to the tap. The plastic bottle is a major concern for consumers which created the market for “Just.” But the convenience…readily available and portable certainly works in bottled water’s favor.
Assessment: Threat of Substitutes is
Buyer Power
Buyers in this market consist of mainly “food and beverage” retailers. This includes smaller establishments like cafes, bars and restaurants to larger retailers like convenience stores, supermarkets and independent retailers. The larger companies tend to have more bargaining power due to the volume of product they desire but this is largely offset by the amount of buyers in the market. On top of this is the fact that retailers are influenced in their buying decisions as they need to cater for their customer’s preferences. As a consequence it’s super important that bottled water companies build a strong brand focusing on brand loyalty in order to tip the scale in their favor when it comes to buyer/supplier …show more content…
Having said that the opportunity for innovation around the product is limited so this means they would be offering something similar to what is already available for consumers and in doing so coming up against some majorly established brands. This would decrease the likelihood of new entrants. Working with a bottler would already be established but finding a new “unique” source of water could be a challenge if they choose that as an option instead of purifying tap water. Also although there is a smaller amount of companies within the industry there are a substantial amount of brands making it difficult to capture a profitable amount of market share.There is a lack of intellectual property and the source of the water has become of greater importance, giving the product a “uniqueness” which both serve to increase the chances of new entrants although the government regulations enforced on both the purification process and the environmental restrictions serve to deter new …show more content…
Assessment: Threat of new entrant is Moderate.
Threat of Substitutes For the retailer the threat of a substitute is not tap water, but CSD’s or other non-alcoholic beverages. There is a huge inventory of available alternatives targeting all types of consumer tastes ranging from coffee or tea to juice or soda. These threats are readily available and usually positioned next to water in both retail stores or on a menu. For the end consumer it would be tap water and this definitely comes into play during a down time in the economy on either a personal or a societal level. The relatively low cost of water and their substitutes means switching would incur minimal costs.
Water is widely considered the healthiest option with no calories so it mitigates it’s threat to some degree although there is a real push to move away from bottled water and back to the tap. The plastic bottle is a major concern for consumers which created the market for “Just.” But the convenience…readily available and portable certainly works in bottled water’s favor.
Assessment: Threat of Substitutes is