1. Why has Evian’s U.S. market share continually decreased since the emergence of the cola giants’ bottled water brands in the late 1990’s?
Evian’s U.S. market share has continually decreased since the emergence of the cola giants’ bottled water brands because Evian failed to foresee competition from the likes of Coca-Cola in the bottled industry. Evian also failed to realize that selling bottled water in the U.S. is completely different from selling bottled water in Europe. In Europe, consumers are more knowledgeable of the differences between purified and glacial spring water, prefer the glacial spring water and are willing to pay more for glacial spring water brands like Evian. In the U.S. consumers are indifferent to the types of bottled water and make purchase decisions based solely on price. Evian ‘s average cost per case is about 80% higher than that of Aquafina and Dasani because of the additional handling and transportation costs of bottling water from Evian’s French/Swiss Alps glacier source. Because purified water is cheaper than imported glacial spring water, consumers in the U.S. prefer purified water brands like Aquafina and Dasani.
2. In evaluating Danone’s strategy for gaining U.S. market share, present the positives and negatives for remaining a single enterprise entity and “going it alone”.
Positives for remaining a single enterprise entity:
• If Danone continues to operate the Evian brand as a single enterprise entity, Danone will have to accept Evian water as a niche product rather than a leading product. However, if Danone pushes Evian’s pristine qualities and positions the brand and as a high-end premium beverage with a healthy edge via marketing and advertising, Evian may be able to provide Danone a higher profit even with smaller volume sales.
• Remaining a single enterprise entity will preserve the national, historical and family pride of the company.
Negative for remaining a single enterprise entity:
• As a single enterprise entity Danone will have to continue fully covering marketing, distribution and brand management costs for Evian that Coca-Cola has offered to provide in exchange for a 51% stake in the company.
• As a niche product, Danone would focus its sales efforts on the exclusive group of U.S. consumers willing to pay more for glacial spring water.
• In order to avoid operating Evian as a niche product, Danone could chose to find a local spring water source in the U.S. in order to cut costs and compete with Aquafina and Dasani. However, the Danone line of production and distribution would have to be built out with acquisitions.
The future for Champion Enterprise is extremely optimisticoptimistic; with some major changes the company can once again be successful.. The reason the company filed for bankruptcy was to take care of its deb...
As stated in the case, “the market for energy drinks was growing; between 2010 and 2012, the market for energy drinks had grown by 40%. It was estimated to be $8.5 billion in the United States in 2013 [and] forecasts projected that figure to reach $13.5 billion by 2018” (pg 5). However, much of this market’s revenue -- 85% in fact -- is dominated by five major brands, while the remaining 15% is split between approximately 30 regional and national companies. (pg. 5). With this saturated market, it might not be best for Crescent Pure to enter as a completely new product to the industry, as there is the possibility that it will be squeezed out of the profit shares by more established brands -- especially if it is not properly secure in its identity. In addition, while the market for energy drinks appeared to be growing at an exponential rate compared to the market for sports drinks -- which increased only 9% in five years and would be at approximately 60% of the rate for energy drinks in 2017 (pg 6) -- the consumers appeared to be wary of partaking in the market for several reasons, which would potentially harm the reach of Crescent Pure. These concerns included rising news reports discussing the safety of energy drinks (pg. 5). Taking into consideration the data provided in the case that concerns reasonings of why consumers choose specific drinks over others, there
Monster Beverage Corp. shows that they understand their customers’ needs. They are a successful business with higher growing revenue every year. Their revenues did decrease during the economy’s recent recession (2008...
Voss has two macro segments, each with its audience. To define the target groups in more detail, it is important to ask these three questions: what, who and how. In the first segment, the answer is: image, individuals and mineral water, and in the second segment: image, companies and mineral water (Neves, 2013). For the overall marketing of VOSS water, image seems to be the main drive for the company.
This would show how bottled water is being falsely advertised and is actually harmful for the body since the Food and Drug Administration (FDA) “doesn’t keep track of companies that produce bottled water and doesn’t require [them] to report positive tests for contaminants” (Zhang, 2009, para. 1). The FDA, which is the only organization that regulates the bottle water should put in effect stronger regulations in order to have more control over the water that is being sold to people.
While Coors was initially the leader in proactive innovation in the industry, the period of 1975-1985 was filled with business model decisions that were thoughtful and controlled, but they were too slow to implement in comparison to their competitors. They started this decade of turmoil with a volume drop of 4% in 1975 by selling only 11.9 million barrels as opposed to the previous year’s 12.3 million barrels. For a company that started with exponential growth in the brewing business, Coors surprisingly fell behind entering markets that their competitors were dominating in the meantime. The longer they took to enter the sector, the light beer market for example, the more market share they lost. Their nationwide expansion took far longer than their competitors as well. All major beer brewery distributors in the industry reached 50 states by 1985 except for Coors. The overall loss in the U.S. market from their slow expansion was totaled to 21%. This was not promising especially for a company who used the cost-leadership approach according to Porters Generic
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
...th management to determine whether to spin off or integrate, and make a clear move toward that choice. Whichever the choice, the decision must be made, and management must be aware that regardless of their personal feelings, they must communicate it to everyone in their department.
According to the “Competition in the Bottled Water Industry in 2006 Case,” bottled water industry became the one of the world’s most attractive beverage categories, as more and more people began to focus on health and fitness. Consumers start realizing the need of proper hydration, and they began purchasing bottled water instead of drinking tap water, because they were worried about safety of tap water, which tasted like chemicals. Actually, tap water contained chemicals, such as chlorine and fluoride, which are harmful for human body; however, this problem was solved when the bottled water was brought to the market. Due to bottled water’s convenience, purity, and portability, and safety, bottled water industry began to rise rapidly. During
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 new competing brands for similar products. Also with the recent consolidation among the bottler’s and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottler’s willing to distribute their product.
Diageo has long been the front-runner in the premium drinks business. Its brands include Guinness, Smirnoff, Bailey's, Johnnie Walker, and Cuervo complimented by broad range of local and specialty brands from around the world. In 2002, Diageo held a 15% (United States-Spirits, 2002) market share and was by far the leading manufacturer of spirits in the United States followed by Pernod, and Fortune Brands, Inc. The market is expected to have 9.8% (Huddleston, 2005) growth in the next three to four years, so new entrants may find the going hard unless they have capital to sustain themselves.
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
From a business point of view, it seems so ignorantly deceptive, yet it is absolutely genius. With a little marketing, bottled water has become a huge success. However, it is killing the environment and the water is usually comparable to tap water regardless. The “The Story of Bottled Water” is a very well-made short film that takes viewers into the dark world of manufactured demand.
This is a great model for the company because they can keep their logistic costs down by helping other companies expand their distribution networks. Experimentation with the new market for carbonated beverages on the decline, Coke has done experiments in new flavors and healthier alternatives to try to stay competitive. As well as investing in “Keurig Green Mountain is a K-Cup maker but has a new Keurig Cold that can deliver Coca-Cola through the new system.” (Cooper, 2014) Learning from experience, Coca-Cola has had some fierce competition over the years but nothing in the form of an entire health market shift like now.
Strom, Stephanie. "Bottled Water Sales Rising as Soda Ebbs." New York Times 25 Oct. 2013. Web. 8 Mar. 2014. .