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    Perrier - Assignment 4

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    Marylou Basmadjian
    Perrier can be described as a cybernetic system with various internal and external factors influencing it. Externally, it operates in a political, economic, socio-demographic, technological, and ecological environment in France. It has stockholders including parent company Nestle, consumers in various market segments, providers for packaging materials, the government regulating its industry, and competitors in the sparkling water market. Internally, it has management divided between Nestle and Perrier, production through its natural spring source, consistent marketing emphasizing tradition, limited R&D, and financials showing steady growth. A key strategic issue is that Perrier's consistent brand image that was once a strength may now limit its relevance as consumer preferences change.

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    Perrier - Assignment 4

    Uploaded by

    Marylou Basmadjian
    59 views6 pages
    Perrier can be described as a cybernetic system with various internal and external factors influencing it. Externally, it operates in a political, economic, socio-demographic, technological, and ecological environment in France. It has stockholders including parent company Nestle, consumers in various market segments, providers for packaging materials, the government regulating its industry, and competitors in the sparkling water market. Internally, it has management divided between Nestle and Perrier, production through its natural spring source, consistent marketing emphasizing tradition, limited R&D, and financials showing steady growth. A key strategic issue is that Perrier's consistent brand image that was once a strength may now limit its relevance as consumer preferences change.

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    Perrier can be described as a cybernetic system with various internal and external factors influencing it. Externally, it operates in a political, economic, socio-demographic, technological, and ecological environment in France. It has stockholders including parent company Nestle, consumers in various market segments, providers for packaging materials, the government regulating its industry, and competitors in the sparkling water market. Internally, it has management divided between Nestle and Perrier, production through its natural spring source, consistent marketing emphasizing tradition, limited R&D, and financials showing steady growth. A key strategic issue is that Perrier's consistent brand image that was once a strength may now limit its relevance as consumer preferences change.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views6 pages

    Perrier - Assignment 4

    Uploaded by

    Marylou Basmadjian
    Perrier can be described as a cybernetic system with various internal and external factors influencing it. Externally, it operates in a political, economic, socio-demographic, technological, and ecological environment in France. It has stockholders including parent company Nestle, consumers in various market segments, providers for packaging materials, the government regulating its industry, and competitors in the sparkling water market. Internally, it has management divided between Nestle and Perrier, production through its natural spring source, consistent marketing emphasizing tradition, limited R&D, and financials showing steady growth. A key strategic issue is that Perrier's consistent brand image that was once a strength may now limit its relevance as consumer preferences change.

    Copyright:

    © All Rights Reserved
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    of 6

    STRATEGIC PLANNING

    Assignment for Seminar 4 October 6, 2020

    Topic
    Describing the company as a cybernetic system : PERRIER

    INTRODUCTION

    Perrier is a natural sparkling mineral water that is well known throughout the world. Famous
    for its elegantly-shaped green bottle, Perrier is the ultimate refreshment to quench all thirsts.
    In 1863, the PERRIER saga began: bubbles taken from a French spring were bottled, ready to
    satisfy people’s thirst. In 1898, Dr. Louis Perrier became the owner of the spring, which would
    later take his illustrious name.
    While the bubbles have remained intact over time, the bottle has evolved with the consumer
    needs. In the 2000s, the natural sparkling mineral water became available in 100% recyclable
    PET bottles.
    The brand is also strongly related to sports, and is recognized as Roland Garros Tournament’s
    historical partner, since 1928.
    Perrier proposes 3 kind of products, which are all weather-sensitive.

    • sparkling waters

    • aromatized waters

    • finely sparkling waters


    I. PERRIER AS A CYBERNETIC SYSTEM

    a. Macro environment of Perrier

    Environement About Perrier

    • Head office in France (democratic country) with a center-liberal


    president ( Emmanuel Macron)
    • Water must meet many health requirements and its composition
    Political must be displayed on labels
    • Interdiction for retail companies to sell sparkling waters in their
    name
    • The European Parliament adopted a resolution in 2012 to reduce
    by half food waste by 2025. At the national level, a struggle pact
    was launched on 14 June 2018.

    • Crisis in France because of Covid 19


    Economical • 10 % of unemployment in France
    • France is a member of the European Union

    • Sparkling water only seems to be appreciated in Europe: soft


    drinks are often associated with soft drinks in other countries.
    • Increased concern for the body in its aesthetic value (beauty,
    slenderness, youth...) and in its physical balance (vitality, form,
    inner strength, balance...).
    • Over the past ten years, new ways of eating and consuming have
    been developed, more concerned with the conditions of hygiene
    Socip- and the manufacture of food products. Branded products, which
    demographical guarantee quality to consumers, are preferred, organic or
    nutritional characteristics are prized. Consumers want to be
    assured that they are eating healthy products. Communication
    plays an important role in the representation of the values
    attributed to products.
    • The various mediatized pollution cases have greatly increased the
    consumption of bottled water. The proliferation of water treatment
    processes is scaring the consumers, the idea that “tap water” is not
    healthy. The consumption of bottled water has become common.
    • Consumers tend to favour more and more brand-free waters where
    the price appears more attractive.

    - Innovations in the agri-food sector primarily to reduce


    waste:Fabrication d’emballages comestibles (Lactips SA)
    o New enzymatic cocktail for fruit juices, wines, etc., to
    reduce the waste generated by the juice production process
    and reduce the energy consumption used.
    o The carton as packaging progresses mainly abroad, but still
    Technological little in France.
    o PET, a solid, transparent and recyclable plastic, is becoming
    more and more famous.
    - The main driver of innovation in the soft drinks market remains
    health: drinks enriched with fruits and other natural ingredients,
    light, without aspartame, enriched with antioxidants or superfruits,
    etc.

    • Context of climate change and fight against waste,


    overconsumption and pollution
    Ecological • Temperatures are raising: beverage products and carbonated
    water are weather-sensitive (their consumption depends on the
    weather: the hotter it is, the more they are consumed). The water
    consumption is very variable according to the seasons, and
    according to the global temperatures observable during the year.

    b. Perrier in relationship with his business environment

    Stockholders / Creditors :
    The investors of Perrier is Nestle principally, its owner. Nestle invests in a lot of brands and
    companies and proposes good return on investments (dividends) to its private investors.

    Source : https://www.nestle.com/investors/individual-shareholders/dividends
    Perrier also owe money to its providers but they are not very numerous.
    Debtors :
    The companies who owe money to Perrier are the retail companies principally and the
    government if the company has funding from the government.

    Labor market :
    Around 3000 workers are employed by Perrier to produce their bottles.

    Job Wage (year)


    Operator 22 256 €
    Area Manager 33610 €
    Technical Coordinator 30936 €
    Maintenance Technician 29886 €
    Production Manager 43810 €

    Consumers :

    o Around 1 billion of bottles produces every year


    o All social classes are concerned
    o The bigger consumers are people aged from more than 50, households with a
    young child and wealthy households located in urban areas.
    o Consumers prefer to consume sparkling waters in the market segment of CHR
    (cafe, hotel, restaurant).
    o Health is a big concern for consumers of sparkling waters.
    o The consumers are price sensitive.

    The water market is divided in 6 segments


    ▪ Economic segment : consumers choose a water by looking at the price
    ▪ Segment « baby » for young children
    ▪ Segment « family » (Vittel)
    ▪ Sparkling waters segment
    ▪ Aromatized waters segment
    ▪ Leisure segment ( Salvetat)
    ▪ Health segment (Contrex)

    Providers :
    The principal provider of Perrier is Nestle Waters, which detains the company. Perrier is its own
    provider, with its own source of water and its own glassware. The only providers they resort to
    are for plastic packaging (Elipso and PDG Plastiques). They also resort to transport firms to
    supply their products to the consumers (boat, train and truck principally).

    Government :
    Rules to apply on the extraction, the composition of the bottles and the bottling of the water.
    The taxes are the same as for normal French companies (33%) but there can be an additional fee
    for the firms which activity is to bottle mineral waters.

    c. Perrier in his internal environment

    i. Management
    The firm is a simplified joint stock company with shareholders. It was basically held by the
    group Perrier- Vittel and is now managed by Nestle Waters since 1992. The management of the
    firm is divided between Nestle Waters, the shareholders of Perrier and the direction of Perrier.
    As a result they have some issues to find a strategy which could please everyone. This is why it’s
    been the same strategy since the creation of the company.

    ii. Production
    Perrier is producing more than 1 billion of bottles every year thanks to its own natural source of
    sparkling water. They also have their own foundry because they recycle their glass bottles, and
    they bottle the water on their own. The only thing they don’t do is supplying the finished
    products to the consumer.
    iii. Marketing
    In terms of marketing, Perrier’s image stayed the same since its creation, with almost the same
    logo, always the same slogan and the same packagings. Since their creation, they used four
    principal channels to communicate and sell their products :
    o Advertising spots : they normally create one tv campaign each year since their creation
    but they are really similar
    o Partnership : biggest one is Roland Garros
    o Use of artists : Dali, Andy Warhol, Serge Gainsbourg
    o Internet : website regularly updated

    iv. RandD
    Perrier hasn’t evolved since the creation of the aromatized sparkling waters. They stick to the
    same products and image.
    v. Finances

    Its social capital is of 7 309 106,33 €.


    Its turnover was 299 961 500 € in 2017, with a net result of 10 325 300 €, increasing of 113 %
    in comparison of 2016.

    II- QUESTIONS

    1- What would be the strategic issues to the company? One or more could be
    outlined?

    When it comes to its communication, Perrier doesn’t communicate enough (except its presence on
    Roland Garros). It’s a brand which is becoming more and more unknown because of the rarefaction
    of its communication.

    Moreover, their strategy is not evolving since their creation, they conserve the same production with
    the same targets and the same products (except aromatized waters added to the range).
    2- What would be the issues of tactical and operational nature? Give examples for
    issues on tactical and operational levels.

    The structure of the production is not very flexible because of the costs that engenders their foundry
    and glassware. Perrier has lots of additional costs because of their desire to keep doing everything at
    the source. They could delegate the bottling, the transport and the foundry to other specialized
    companies in order to reduce the costs and concentrate on the extraction of the water only.

    3- Can you identify the links through which strategic issues connect with the tactical
    and operational ones?

    The strategic issues are leading to tactical and operational issues.

    Perrier didn’t evolve since its creation by keeping the same supply chain and the same production
    process. As they don’t use specialized companies to avoid them having a role in almost every step of
    the production, their operations and production may be less efficient than it could be. Maybe their
    strategy could be reviewed so that they only take care of the source and the extraction of water.

    Moreover, as their strategy didn’t evolve, Perrier knows a lack of image because they stop
    advertising and communicating a long time ago. As a result, their image has been the same since the
    creation and it may be not adapted to the society and the expectations of the consumers of today.

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