Professional Documents
Culture Documents
Case:
Monsanto and The Global Water
Treatment Industry
Sydicate 2:
Abiyan Satrio/ 29118155
Andrew C. Putra/ 29118014
Clarashinta / 29118126
Fela Putri / 29118090
Case Overview
The drinking water treatment segment, which is classified into municipal drinking water
treatment and residential drinking water treatment, is examined in depth. Players in these two
categories produce the chemicals and equipment necessary to purify tap water supplied to
consumers and residential water purification devices. The bottled water industry is considered
a substitute of the drinking water treatment segment.
Yes No
Power:
HIGH
Suppliers
1. Raw Material
– Chemical Companies
– Easily supply to competitor since the raw material is commodity product, but the
industry also have tendency for backward integration to decrease their cost
2. Component Suppliers
– The component are usually customized product.
Suppliers
Yes No
1. Your inputs (materials, labor, supplies, services, etc.) are standard rather that unique or X
differentiated.
2. You can switch between suppliers quickly and cheaply. X
7. Your cost of purchase does not have a significant influence on your overall costs. X
Overall input of water treatment industry is easily substitute. Even though some components are customized,
Water treatment company doesn’t rely on single supplier. For the raw material supplier, it has tendency to
backward integration to decrease cost.
Power:
LOW
Buyers
1. Municipal
– Often face funding and regulatory problem
2. Residential
– Losing confidence in municipal water treatment facilities triggered growth in water
purification equipment market
3. Distributor
– Dealer characteristic are diverse and not easily controlled
– Some dealers also produced and distributed bottled water
– Have chance of backward integration
4. Used Equipment Market
Buyers
Yes No
1. Is there a large number of buyers relative to the number of firms in the business? X
2. Do you have a large number of customers, each with relatively small purchases? X
Water treatment industry is easily substitute and switch in some levels. For the municipal levels, water treatment
industry rely on their fund and regulatory. Customer also spend relatively small purchase.
Power:
Moderate
Potential New Entrants
Yes No
The largest segment in environmental industry is water treatment X
The grow of water treatment is really fast X
Water treatment segment have only a few of competitor (rubbermaid, sunbeam and brita) X
Every competitor have their own special brand and special features X
The customer usually switch into other competitor because of the cost X
The competitor have their own characteristic X
Water treatment is the segment that is not easy to produce X
Even though this segment can grow easily and attract many company dive in this segment, but this segment
need more knowlegde to run that can become obstacle for the competitor.
Power:
HIGH
Firms in Other Industries offering Subtitutes
Yes No
The bottled water industry was considered a substitute to a tap water and to residential drinking water
purification equipment. The bottled water’s price is affordable to customer and convenient to carry. Also it is
very easy to find in stores. And that’s resulted the bottled water product sales growth 41% in 4 years and
distributed world wide. Because of that, the customer potentially not subscribing drinking water from water
treatment companies.
Power:
HIGH
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