Voss Water - Assignment Example

Voss Water Voss Water Voss Water is based in Norway and it is a supplier of clean bottled water company that operates in more than fifty countries all around the world (Anon., 2014). The brand is identified as one of the pure tasting drinking water because of the known environment of Norway for its refined and pure environment procedures, spring and artesian water sources. The company is headquartered in Oslo and New York and the water is mainly bottled by the Voss of Norway (Anon., 2014). In 2007, Voss Water was ranked as the top ranked bottled water, whereas in Finland the wine experts rank it the lowest water. However, the company particular focuses to target United States and sustain it edge in the industry. The company is currently facing criticism that Voss contains similar sources as the tap water due to which the company is currently struggling to sustain its positioning in the industry. However, the competition in the bottled water industry is becoming intense with the passage of time. The present document strategically analyzes Voss Water and its positioning in the industry. In order to determine the positioning of the company, industrial analysis, PESTLE analysis and PORTER five forces analysis have been conducted to determine strategic positioning of Voss Water in the Bottled Water industry (Anon., 2014). Industry Analysis: Bottled Water Industry The overall trend in Bottle Industry has significantly improved that has significantly affected the sales of the bottled water. According to a report of International Bottled Water Association (2014), "Bottled Water Industry in the United States has showed significant growth during 2012-2013 after the Great Recession 2009 (IBWA Report, 2014)". Despite the fact that the United States has slower economic recovery but has high-income level due to which the consumer are comfortable to spend money on discretionary items, including bottled water. It is predicted that the improvement in the economic conditions will cast positive impact on the revenues of bottled water industry (Hamphell, 2013). The consumer’s response is improving with the passage of time (2008-2009) due to which the some of the consumers that were distracted from the high-calorie beverages are also now getting back to the same category. On the contrary, the low-income Americans that were also disproportionately affected are currently struggling for employment due to which they are inclined towards discounted bottled water. In 2013, the off-trade value sales of bottled water have increased by 2 percent. However, the prices of the bottled water have significantly declined by 4 percent (IBWA Report, 2014). It is projected that the sales of the bottled water will increase with the passage of time. The competition in Bottle water industry in the United States is intense, as the consumers are inclined more towards privately labeled products. The major off-trade value of the industry is held with Nestle Water North America that is 23 percent of 26 percent trade value of the whole industry (IBWA Report, 2014). The scope for the private labeled brands is greater, but the companies will face tough competition with Nestle. Therefore, the marketing strategies of this brand play a crucial role in capturing the market. Macro Environmental Analysis Macro environmental analysis of Voss Waters includes the PESTLE to determine the policies and the strategies that can be used to carry on the business successfully. Pestle provides the strategic analysis and a market overview of the environment (Miller et al., 2011). Political Voss Water is very successful in its operations. The management team at Voss Water follows the government policies. They provide premium quality of bottled water, and it is pure. The political factors do not intervene with the operational activities as they maintain the health and hygiene factor. The government has promoted Voss Waters and now with its help they are exporting their products many countries of the world (Williams & Green, 1997). Economic Economically the product Voss Water is very stable as its headquarters is in Norway. Norway is very stable politically and economically. The economic condition of the country helps its citizen so that they have the purchasing power. People can purchase bottled water due to a stable economy. Voss Water is earning high revenues from its business activities, which are also better for the economy of the country. Economic conditions have a big impact of the business, as the country (Norway) has a flourishing economy, and Voss Water is also flourishing with its business in the economy (Gale, 1976). Social The social factors of the country do not impact on the business of Voss water. Nowadays, the people are more health conscious, and they want to eat and drink healthy. Given the purchasing power of the people, the people of Norway are attracted towards drinking water as it is much safer. The company offers premium quality of water, which is the need of the society. Moreover, the growth rate of population in Norway is 1.3%, which is a positive factor for the Voss waters, as they can increase their production keeping in mind the growth factor (Kroon, 1995). Technological Technological advancements play an important role in the bottled water industry. Voss waters have kept it updated with the latest technology. The production of Voss water is totally based on the machines. From bottling to packaging every process is done through high technology, which is equipped in the company (Strydom, 2005). Legal Voss Water has always strictly followed the employment and health and safety laws. The employments law covers the benefits of all of its employees whereas they also have proper safety measurement in case of any unwanted event. Hygiene is maintained in the company, and all the products of the company are of good quality and healthy (Miller et al., 2011). Environmental Environmental factor is very essential for every company to carry on its business. In the case of Voss water, environmental factors do not affect the business of the company. The environment is very safe, and the climatic conditions are also favorable for this type of business. The company also makes sure that it does not affect the environment through its business activity (Williams & Green, 1997). Competitive Environmental Analysis Voss Water, the original and iconic brand name has marked its presences among its rival firms such as Solan de Cabras, Vichy Catalan, Font Vella Landjaron, etc. In order to carry out its competitive environmental analysis, Porter’s five forces model is used (Hill & Jones, 2012, p.49). Threat of New entrants Due to its global presence it is seen that the threat of the new entrants is relatively low. The reasons are that there is high capital costs and difficult for other companies to enter the distribution. Moreover, there are low profits associated with the product due to the threat of already existing private labels that are acting as a competitive force against them. Threat of substitutes The threat of substitute products is low, and currently people are opting for improved quality of water in bottles. However, in the future if there is an increase in better quality of tap water then, there is a possibility that there will be a decrease in sales of bottled products. Bargaining Power of Supplier The bargaining power of the supplier is low to moderate as there are specialized equipment and machinery used for the producing water. Moreover, standardized material is also utilized, using many labor and transportation costs. Bargaining Power if Buyer The bargaining power of the buyer is seen high as they are relatively more concentrated than supplier. Additionally, due to increasing in competition, it is seen that there is more negotiation in the retail industry. The switching costs for buyers are low which is due to high price sensitivity so people can opt for other brands. The only differentiating factor of this brand with others is in its packaging. It can also be said that the buyer is educated about the brands as well as the product type so they can make preferences when choosing their product. Industrial Rivalry/ Competition There is high competition existing in the market. One of the reasons behind this is the fact that their prices are normally fixed and competitive. The water industry has matured dramatically, so people are inclined to choose among the range of products that are being offered. It is also seen that the competitors are strategically driven and show diversifying elements to prosper. Profitability margins are low, so each competitor strategically tries to override each other. In this regard, they may also take each other’s market share to gain more sales. VRIO Analysis With respect to competition, VRIO analysis evaluates how the product is different from its competitors through the following four dimensions (Enz, 2010, p.431): Value: Voss water as a Norwegian brand is distinct in United States making it a sought after brand. Though, within United States the competition is high but is easily purchased across retail outlets is comparatively high. Rareness: The brand is Norwegian but is not limited within the region. It is operating at a global level but due to its distinct name in United State it can be considered rare as compared to other local competitors in United States. Imitability: The product cannot be imitated as it is made distinctly through standardized procedures supplied from Norway. The brand name itself makes its exclusive and different this cannot be imitated. Organization: Water and purifying equipment are the only resource used by the company. The brand can make effective use of these resources to supply pure water across regions. Thus, the organization using standardized materials has the means to perform well in United States and beyond. Its unique packaging and design make it unique from its competitors (Voss World, 2014). List of References Anon., 2014. The story of Voss. [Online] Available at: . Enz, C.A., 2010. The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy. London: SAGE. Gale, J.D., 1976. Macro-environmental analysis systems for corporate planning: an information-flow model and technological developments for the political sector. 1st ed. Los Angeles: UCLA. Hamphell, G., 2013. U.S. Consumption of Bottled Water Shows Continued Growth, Increasing 6.2 Percent in 2012; Sales up 6.7 Percent. [Online] Available at: . Hill, C. & Jones, G., 2012. Strategic Management Theory: An Integrated Approach. Mason: Cengage Learning. IBWA Report, 2014. Bottled Water Industry US. [Online] Available at: < HYPERLINK "www.bottledwater.org" www.bottledwater.org >. Kroon, J., 1995. General Management. 2nd ed. Cape Town: Pearson South Africa. Miller, F.P., Vandome, A.F. & McBrewster, J., 2011. Pest Analysis. 1st ed. Saarbrücken: VDM Publishing. Strydom, J., 2005. Introduction to Marketing. 3rd ed. Claremont: Juta and Company Ltd. Voss World, 2014. Voss Products. [Online] Available at: [Accessed 28 October 2014]. Williams, T. & Green, A., 1997. The Business Approach to Training. 1st ed. Farnham: Gower Publishing, Ltd. Read More