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Watsons Waters

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Watsons Water
Watsons Water (WW) is a Hong-Kong and Asia-based company that majors in
production of pure distilled water. For over a century, the company has developed immensely
and upgraded its goods, client base and systems so that it can continue to serve its beloved
consumers with the healthiest and purist drinking water. Customers can connect with each other
both online and offline with WW's Online & Offline platforms (O+O). Consequently, WW is
still by far the world's largest producer of pure distilled water (Watsons Water, n.d).
PESTEL Analysis
Political factors
Watsons Water is located in a politically stable Hong Kong. The current constitution
excludes opposition parties, allowing the ruling party to carry out its duties without interference.
Regardless, the Ukraine war has influenced Asia. The invasion of Russia has already harmed
Europe's land transportation systems (Government of Hong Kong, 2022). Due to airspace
closures and safety concerns, long-haul flights between many Asian countries and Western
Europe may exacerbate capacity issues in air freight and need expensive alternative
arrangements, such as sea lines. The expected comeback in passenger travel will also be delayed,
affecting the reduction of container shortages via marine routes (EIU Solutions, 2022). The
disruption in logistics and rising oil prices are likely to keep global marine freight rates high until
2022. Watsons Water is currently hurt because they rely on infrastructure and oil extraction.
Economic factors
Hong Kong's economy showed indications of recovery in 2021 after a two-year slump.
For the first two months of 2022, export sales increased by double digits’ year-on-year. In
December 2021, CPI inflation was 1.5 percent, up from 1.4 percent in November. The epidemic-
related shipping delays caused a shortage of fresh veggies this month. The local pandemic's fifth
wave harmed the job market. Seasonally adjusted unemployment rose 0.6 percentage points from
November to January 2022. The fifth wave of the local epidemic harmed the labor market.
Unemployment climbed by 0.6 percentage points between November 2021 and January 2022,
reaching 4.5 percent (EIU Solutions, 2022). These shifts require WW to adapt to changing client
needs and provide opportunities for growth.
Socio-cultural factors
WW is situated in Hong-Kong that has meticulous socio-cultural factors. Since its
implementation, the NSL has helped to reestablish Hong Kong as a peaceful, diverse, and
inclusive international metropolis where business, international trade, and investment can resume
as usual while protecting the legitimate rights and interests of both Hong Kong residents and
foreign investors. The "water lords" of ancient times left their mark on Thai culture, which may
be seen in many aspects of daily life in Thailand today (Government of Hong Kong, 2022). They
still rely on Thai culture's foundations to be found in its rivers and canals.
Technology factors
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WW is based in Hong Kong, Asia's technological capital. This has boosted the company's
inventiveness. For example, WW was the first beverage brand in Hong Kong to introduce a
recycled plastic container in 2015. (rPET). The project's purpose is to deliver ecologically
friendly bottled water to those who need it for outdoor consumption. The bottle's shape allows
for easy tear-off for recycling after use. The "easy-to-recycle" concept might then be applied to
bottle recycling. During COVID-19, the company manufactured an exclusive LED UVC
sanitizer and introduced an online shopping platform where customers may acquire several
varieties of bottled water (Watsons Water, n.d). Thus, the company is well-positioned and
advances with technology.
Environmental Factors
Both the business and macro-environment performance of WW is influenced by social
trends and issues. Consumers who are more concerned about their health are a great chance for
WW to increase its product line. An increase in environmental awareness can also help the
company by attracting more customers by boosting its environmental impact (Watsons Water,
n.d). WW may be able to minimize its energy use by incorporating new, more energy-efficient
equipment into its manufacturing operations. WW (Goni et al., 2021). In addition, increased
sales among customers outside of Hong Kong could aid the corporation in its expansion.
Legal Factors
Regulations must be adhered to for WW's retail operation to succeed. With the help of
environmental legislation, WW has an opportunity to improve its business image. To further help
the company's growth, international patent regulations can be strengthened further. When it
comes to reducing patent-related issues in its macro-environment or remote, such as in Macau,
WW has benefited from patent license restrictions in rising economies like China. Additionally,
enhanced customer rights legislation provides the company with an opportunity to raise the bar
on both the quality of its products and the service it provides to its clients (Watsons Water, n.d).
WW's brands could benefit from these measures if they are successful in attracting new
customers.
Porter’s Five Forces Analysis
New Market Entrances
Economies of scale are difficult to achieve in WW's industry. Large-scale manufacturers
of clean distilled water will prosper, while newbies will struggle. Before a business may start
selling, it must meet strict licensing and legal requirements set by the government (Watsons
Water, n.d). WW can exploit the industry's economies of scale, limiting new entrants from
entering the market. Alternatively, the organization can focus on product innovation to
differentiate itself. It can also advertise to build a strong brand. As a consequence, it will not lose
clients to competitors.
Suppliers’ bargaining power
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The key suppliers for WW company include plastic manufacturers, and motor suppliers
for the dispenser engines. The industry in which WW works has a network of suppliers, relative
to the number of consumers. Price control is a weakening factor in supplier bargaining strength
as a result of these changes (Watsons Water, n.d). Since the industry is a major customer for the
firm's suppliers e.g., of plastic water bottles, a close relationship between the company and its
suppliers is beneficial.
Substitute commodities
Mineral, deionized, and spring water are some of the alternatives to the distilled water
produced by WW's industry. There are just a few replacements available, and they are all made
by low-profit firms using different production methods than the reverse osmosis employed by
WW (Watsons Water, n.d). Companies in the sector in which WW operates are free to make as
much money as they choose. The threat of substitute products is less of a force in the industry
because of all of these variables.
Buyers’ bargaining power
A buyer’s bargaining power is related with the availability of numerous choices. For WW
in Hong Kong, consumers can choose from a myriad of other water products from a supermarket
shelf. Such brands come from competitors like Aqua. It means that WW must thrive to always be
above par with their brands (Watsons Water, n.d). That is the company has considered
campaigns that ensure their products attract more consumers and support environmental
sustainability.
Competitors
Some of the key competitors that produce distilled water in Hong Kong include Aqua,
Jeff Power Company Limited, Big Autumn Culture, Deen Gem House among others. All these
companies compete with WW in the distilled water market (Watsons Water, n.d). However, due
to WW’s meticulous Corporate Social Responsibility strategies, the brand is well rooted and still
have a higher competitive advantage than other producers in the city.
Advantage-creating resources
WW has many resources that put them in a good position. For example, ‘WE CARE' produced
aluminum bottles that can be reused instead of plastic water bottles which are used and
discarded. This has considerably reduced plastic in Hong Kong's garbage (Watsons Water, n.d).
In 2017, WW was also recognized an exceptional digital marketing brand. They have gained
many new partners and customers through the brand. Since 2016, the organization has had
excellent consumer relations. This means they are improving customer retention and increasing
repeat business. Mirror Monthly Magazine also has an excellent CSR, indicating they care more
about their customers' welfare and organic growth (Watsons Water, n.d).
Appropriate Competitive Strategy
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Porter describes three competitive strategies: focus, cost-leadership, and differentiation

strategies. Since their inception, it has always been recommended that a company focuses and
moves on with strategy. However, due to frequently changing business environment, most
companies have adopted a hybrid competitive strategies which includes over of the strategies
(Bhasin, 2022). Therefore, WW can also consider a hybrid competitive strategy. This strategy
has been found to increase business performance in terms of balancing the tenets of the three
strategies and stepping on their limitations (Weerasai & Singsa, 2021).
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References
Bhasin, H. (2022). Competitive Strategies - Definition, Limitations, and the Importance.
Marketing91. Retrieved 6 April 2022, from https://www.marketing91.com/competitive-
strategy/.
EIU Solutions. (2022). The Economist Intelligence Unit: Hong Kong. Country.eiu.com.
Retrieved 6 April 2022, from
https://country.eiu.com/Hong+Kong/ArticleList/Analysis/Politics.
Goni, F. A., Gholamzadeh Chofreh, A., Estaki Orakani, Z., Klemeš, J. J., Davoudi, M., &
Mardani, A. (2021). Sustainable business model: A review and framework development.
Clean Technologies and Environmental Policy, 23(3), 889-897.
Watsons Water. (n.d). Watsons Water | About us. Watsons-water.com. Retrieved 6 April 2022,
from https://www.watsons-water.com/about-us.
Weerasai, C., & Singsa, A. (2021). HYBRID COMPETITIVE STRATEGY OF HOMESTAY:
THEORETICAL PERSPECTIVES AND EMPIRICAL EVIDENCE IN THAILAND.
Academy of Strategic Management Journal, 20, 1-12.