Group 6:

Lalit Singh RaoMaanasa MallelaManas MendirattaMehul Gahrana

BISLERI

Bisleri continues to innovate constantly,urged by the goals of the Aqua Green Revolution to provide every Indian easy access to purified drinking water and to support initiatives that rejuvenatethe Earth’s natural sources of pristine drinking water.

Bisleri began the Aqua Green Revolution with an ambitious dream in mind; that of an India in which every person, irrespective of geographical barriersor economic limitations, has uninterrupted access to scientifically purified and fortified drinking water

Mission Vision

PESTEL analysis of Bottled Water Industry

Political Favourable – Stable government and policies to support industrial growth Against – High Tax rates Economical Favourable – Rapid urbanization, increasing per capita income, growth of tourism, high CAGR of the industry Against – Low per capita consumption, shelf life Socio-cultural Favourable – urbanization, high spending, health awareness Technological Favourable – Improved purification and packaging techniques Environmental Favourable – PET bottles and recycling techniques Against – low water levels, plastic waste Legal Against – strict purity laws to follow

Conclusion from PESTEL analysis

There is a lot of untapped potential in the bottled water industry despite of the adversaries present due to improved standards of living, technological advancement and increased awareness in people towards health issues related to drinking water.

Porter’s Diamond Analysis Firm strategy - structure and rivalry Facing strict competition from organised big brands as well as unorganised local players. Demand conditions Increasing demand with growth around 22% CAGR Factor conditions Technological advances and resource availability makes it a strong condition Related and support industries Unorganised sector and low switching costs.

ConclusionAlthough support industry is still growing but due to increased demand and favourable factor conditions the industry is likely to grow at a faster rate.

PORTER’S FIVE FORCES ANALYSIS

Rivalry among Existing Firms (HIGH)

Concentration (High)Many firms - Perfect CompetitionCost Conditions (High)Price fluctuates between different players and offeringsProduct Differentiation (Low)Bottle Shape, LabelsMainly concentrated on PURITY

Threat of Substitutes (High)

Substitute Availability (High)Easy availability of substitutesPerfect Switching Cost (Low)High cost of purifiers for households and corporatesPerfect Replaceability (Low)Cannot be perfectly replaced by Imperfect Substitutes

Buyers switching costs (Low)No pecuniary cost; Placebo effectBuyers Price Sensitivity (High)Demands competitive prices, Ready to switch among the cluster

Bargaining power of Buyer (High)

Threat of New Entrants (Moderate)

Capital Costs and industry (Moderate)Moderate levels shall attract New entrantsEconomies of scale and distribution (Low)Existing players have achieved low cost production and distribution capabilitiesBrand Loyalty and Government regulations (Low)Entrants struggle to create brand loyalty for undifferentiated products.

Bargaining Power of Suppliers (Low)

Selected suppliers for superior intermediates (Low)Continuously increasing no. of suppliers. Significantly dependent on industryForward integration threats(Low)Suppliers cannot integrate forward to threaten industryWorkers/Contract employees (Low)Ample unskilled labor.is a significant advantage for the industry

Based on the Porter’s Five Forces Analysis, the following conclusion can be derived :

- The Entry barrier in the industry is high in the form of Moderate Capex

- To sustain the business is not easy. Taxes are high (15%) and Distribution system needs to be strong to be successful.

- Competition is cut-throat in the industry. Perfect competition exists and there is no loyalty towards a specific brand

- Perfect Substitution is unlikely in the short term. There are ample Imperfect substitutes though

- There is no exit barrier.

Key Success Factors for Bottled Water Industry

Distribution

Packaging

Key Success Factors

Strong distribution networkExploring new channelsCustomer perception

Shapes and sizeTechnological advancement

Labeling

PriceLow cost of production

Economies of scaleFirst mover advantage

Strategy

• Rural market penetration• Concentrating on volumes• Improve the visibility of Vedica and changing its target segment• Differentiation on packaging, price and distribution

Value chain

Raw Material

• Water• Plastic grain• Packaging

material

Treatment

• Water• Testing

Bottling

• Capping• Testing• Recycling

Distribution

• Route mapping

• 3 level distribution channel

Marketing and sales

• Key strength- Branding and segmentation

• Catchy advertisements

Raw Materials Treatment Bottling Distribution Marketing

and sales

Strategy– Space MatrixSpace Matrix

Internal Strategic Position External Strategic Position

Values -6 to -1 Competitive Advantage Values +1 to +6 Industry Attractiveness (Porter’s 5 Forces)

X Axis

-1Product Quality 3Barriers to Entry

-1Market Share 3

Growth Potential - Bargaining power of Buyer 3 Threat of Substitutes 1Bargaining Power of Suppliers 6

-1Brand & Image 5Aceess to Financing

-3Product Life Cycle 6Tech: Know how

Total X Axis Score 2.75

Values +6 to +1 Financial Strength Values -6 to -1 Environmental Stability

Y Axis 6

(Unlisted Company)1000cr Revenue by 2015

Therefore looking at secondary reports and market share

commanded we can make conclusion

-6Price of Competing goods

-2 Inflation Rates

-2Technology Changes

-5Competitive pressure

-6Demand Variability

Total Y Axis Score 1.8

Space Matrix