Porter’s five forces THREAT OF NEW ENTRY. SUPPLIER POWER. COMPETITIVE RIVALRY. BUYER POWER. THREAT OF SUBSTITUTION.
Threat to new entry - High Annual growth rate more than 38%. The fastest-growing and most attractive beverage category in the world. Large pool of buyers but no one accounts for a significant fraction of overall market demand.
Continued.. Low investment at initial stage. Government policy Enhance waters offered higher margins. More number of substitute available in market.
Supplier power – Moderate to Low Bulk buying from supplier.Manufacturer purchase bottle or raw data in a bulk quantity so itincrease the bargaining power of buyer. Low differentiate in raw materialSupplier not differentiate raw material of bottled water so they notattract more buyer from the market and for this reason suppliernot bargain with buyer but try to provide raw data as per buyer need. PET SupplierGovt has taken decision to use PET bottle only with the benefitof recycling but due to there is a less supplier available in market,the bargaining power of supplier is high Water AvailabilityThere is a huge no of water supplier available in market so buyercan bargain with supplier
Competitive rivalry- High COMPETITORS – Parles Bisleri Coca Cola with its brand Kinley PepsiCo with its brand AquaFina Manikchand with its brand Oxyrich K.K.Beverages with its brand Kingfisher QUA Product Differentiation– UV Technology safe and effective.– does not add any chemicals– no harmful byproducts– High quality carbon block pre-filter– improves taste & odour of water
Continued.. Switching cost Switching cost for customer is nearer to zero in bottled water market and beverages industry. Low exit barrier Investment in bottled water technology is not that much high.
Buyer power- Moderate Generally water is viewed to be of equal quality. So, consumers view all the companies as the same. Purchased in low quantity-All Buyers are purchase in low quantity like 1 liter or 2 liter so they not bargain with manufacturer. Buyers included supermarkets, natural food stores, whole- seller, convenience stores and restaurants etc. Product Information - People do not have full data of all brands so they do not compare with other brands and bargain with dealers. Price sensitivity - When buyers are more price sensitive than it increase bargaining power of buyer.
Threat of substitution - High Close Substitute:a) Pouches waterb) Coconut waterc) Vending machinesd) Water purifier Far substitute:a) Cold coffeeb) Teac) Milk and Buttermilkd) Fruit juicee) Carbonated soft drink