POWER WATER BEVERAGES, INC Harvard Case Solution & Analysis

INTRODUCTION:

Power Water Beverages Inc. (PWBI) is a manufacturer and seller of purified water.It was originally founded in 1999 by Former Olympic swimmer, Duncan Cleworth. Later by looking at the increasing demand of the purified water, Kent Mawhinney bought the rights to produce and distribute this product in 2005 all across the world except for Canada.

PORTER FIVE FORCES:

THREAT OF NEW ENTRANT:

The entire market of the purified water is saturated and matured as well as the new players entering in the market have to incur a huge establishment and marketing costs in order to establish their foot-steps in the entire market. In addition to this, there is a lack of capital in the entire market to promote line.

Thus, this increases the overall entry barriers for the new entrants in the entire industry. In addition to this, the new entrants in the entire industry face a number of uninterested buyers as they are already brand loyal towards their respective brands. Therefore, the threat of new entrants in the entire industry is assessed to be LOW.

BARGAINING POWER OF CUSTOMERS:

There are no or minimal switching costs of the customers for the various products of the company. In addition to this, the products offered by the companies in the entire market are almost similar, which increases the circle of options or choices for the customers. This increases the overall bargaining power of the customers.

On the other hand, the products offered in the market are offered at fixed price and the demand for the products exceeds the supply of the products. This decreases the overall bargaining power of the customers in the entire market. Thus, the overall bargaining power of the customers in the entire market is assessed to be MODERATE.

BARGAINING POWER OF SUPPLIERS:

Thus, in order to enhance and maintain the overall quality of the products of the company, high quality supplies are required.
Thus, there are few suppliers in the entire market, which provides high quality supplies to its customers.

THREAT OF SUBSTITUTES:

There are several substitutes of the product in the entire market ranging from tap water to water purifiers. In addition to this, the products offered by the companies in the entire market are almost similar, which increases the circle of options or choices for the customers.Moreover, the switching cost is also low, which increases the threat of substitutes in the entire industry.
Furthermore, buyers may also be inclined to substitute water for more complex drink choices that provide more benefits than just water. Therefore, the overall threat of substitutes in the entire market is assessed to be HIGH.

INTENSITY OF RIVALRY AMONG COMPETITORS:

There is an Oligopolic competition among the main competitors in the industry, which includes Coca-Cola, Nestle and Pepsi. In addition to this, the firms in the entire industry develop new “waters” and fitness waters in order to re market the water.
Furthermore, the entire industry strives to attract the customers towards the products of the company by offering low prices as well as through extensive marketing and promotion of their products. Thus, this increases the overall rivalry among the competitors in the entire market. As a result, the intensity of rivalry among the competitors is assessed to be HIGH..........................

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