The Evolution of the Bottled Water Industry: Ready for the “Water Wars”?

Published 30 Jan 2012
Reference 5621
Topic Strategy
Region North America
Summary

The U.S. bottled water industry went through a major change of structure around 2002. A huge growth in demand, driven by health-conscious consumers, attracted a wave of new entrants, some of them with strong resources and different business models (purified water). Signs of competitive pressure, in the form of price competition and consolidation, were beginning to appear, forcing players to adapt to a very different competitive landscape.

Teaching objectives

The case can be used in core strategy courses or competitive strategy electives to examine industry transformation (e.g., how industry attractiveness will evolve after changes in the environment). Will the industry become more fragmented or concentrated? What are the forces driving industry structure and performance? The case also allows discussion of the different business models used by companies to adapt to the new landscape.

Keywords
  • Industry transformation
  • Bottled water
  • Strategic positioning
  • Industry structure
  • Endogenous sunk costs
  • Soft drinks
  • Economies of scale
  • Price War
  • Q21112