Contemporary Business Environment

Student Name: Alexandru Alin Dinca

Student ID: C100048725

Page 1 of 17
 Contemporary Business Environment

Executive Summary

The following report has been prepared for developing analysis on the water bottled company

promoting environmental research on the business operations. In addition to that, the internal

analysis through SWOT analysis is prepared to focus on the performance of Aqua minerals.

Furthermore, external environmental analysis is also evaluated to derive the business environment

of the water bottled industry within the UK.

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Table of Contents
Introduction ..................................................................................................................................... 4

Elucidating the Market Structure of the Bottled Water Companies in the UK .............................. 5

SWOT analysis of the Bottled water company in the UK .............................................................. 9

PESTLE analysis on the business of the Bottled water industry within the UK .......................... 12

Recommendations ......................................................................................................................... 14

Conclusion .................................................................................................................................... 15

References ..................................................................................................................................... 16
 Contemporary Business Environment

Introduction

The concerned report will be expressing a complete research analysis of the company which is

mainly involved in the production of bottled water in the UK. The company named "AquaMineral"

will be commencing their business in the UK marketplace. Packed water bottles are usually

preferred by the population of the UK as everyone is shifting towards a healthier option and they

don't want to rely on tap water. This bottled water has to go through several rigorous regulations

for meeting up the requirement of the standard prescribed by the FDA. Bottled water is the purest

form of water and has a very small room for impurities. The market for this business is increasing

and generating great revenues from their increasing sales volume. The study will be highlighting

the essential elements of the external environment which will be including both the micro as well

macro factors in the environmental scanning for establishing the business in the respective country.

The SWOT Analysis and the PESTLE Framework will be used for elaborating on the

environmental factors more clearly. Moreover, the market structure of the bottled water company

will be evaluated at the domestic as well as at the global level along with that appropriate

recommendations will be provided for the enhancement of the business.

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Elucidating the Market Structure of the Bottled Water Companies in

the UK

The Market of bottled water companies in the UK is increasing rapidly and there are a lot of

chances of establishing or expanding the business in this sector. The consumers of the industry are

growing and the revenues of this segment have amounted to US$3.69bn in the year 2023 as well

as they are expected to grow yearly by some 7.75% CAGR in the coming years or the targeted

year (2023 – 2027) (Ridder, 2022). These trends are usually seen as a result of a healthy lifestyle

and wellness across the nation or worldwide.

These needs are arising in the area where situations are having a problematic supply of drinking

water and there is consumption is high due to the branded companies selling these bottled water

by adding some special properties in their products with some mineral contents and so on

(Bandy et al., 2020). The Bottles water segment in restaurants and bars will be amounting around

39% of spending and 10% of the concerned volume consumption by the year 2027.

Figure 1: Revenue Generated in the Bottled Water Industry in the UK market.

Source: (Bandy et al., 2020).

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The average consumption of bottled water in the UK has seen the rise to 49.66 litres per capita in

the year 2021 and it is predicted that this trend will continue to grow by 2027 and the concerned

per capita consumption will continue to reach around 56.94 litres (Pacheco-Vega., 2019)

Figure 2: Average per capita consumption of bottled water in the United Kingdom

Source: (Ridder, 2022)

The chart depicted in the figure clears the market of Bottled Water has various brands giving tough

competition to each other for surviving in the big competition and creating a challenging

environment as well. Volvic emerged to be the leading brand in 2021 and generated huge sales of

under 150 million British Pounds (Pell et al., 2021). Followed by Evian as well as Highland Spring

in the same year. The Companies namely Volvic and Evian water was imported from France and

the respective country is the leading importer of the same into the UK market. The exporters of

the UK's water are Ireland and then followed by China as well as Japan.
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Figure 3: Leading Bottle Brands of the UK

Source: (Clawson, 2021)

Global Market Structure

In the global scenario, the market size of Bottled Water is very huge and the countries are

generating big revenues and satisfying their targeted audiences to a great extent by offering a

variety of features and capturing the market. The market revenue for the US was around 83 billion

US dollars followed by China at 65.45 billion US dollars, Germany at 16.75 billion US dollars and

so on (Schirpke et al., 2019). There is great potential for growth in this segment by commencing

as well as starting a new business.

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Figure 4: Bottled Watered Revenues Worldwide

Source: (Smyth, 2022)

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SWOT analysis of the Bottled water company in the UK

SWOT analysis is a framework which helps to understand the internal environment of the business.

The new business of the bottled water company is named Aqua Mineral, which is just entering the

market. The respective analysis will be done for the aforesaid business to understand its strength

and weakness in the market. The threat and opportunity for the aforesaid business will also be

comprehended through this. The following analysis for the start-up business will lead the owners

of the business to develop skills in order to attain success.

Strength Weakness

Skilled management: The new start-up Less capital: One of the major weaknesses of

business has a positive factor which is its the new start-up business Aqua Mineral is its

management team. The skilled team will be shortage of capital. The less amount of capital

able to strengthen its brand value in the market. will lead the business to face various issues in

The talented management team will be able to the market. The operations of the aforesaid

provide a better promotional aspect, which can business will be hampered due to the lack of

be considered as the strength of the aforesaid capital (Klemeš et al., 2021).

business. Competitive market: The competition in the

Quality and hygiene: One of the most market is a crucial factor for any new start-up

important factors is the quality and hygiene of business. The existence of bottled water

the product. The new business Aqua Mineral companies such as Fiji, Evian, and so on are

will also focus on providing the best quality the competitors of the new start-up Aqua

and maintaining hygiene. The sanitary Mineral. Due to the lack of acknowledgement

condition is well maintained in the business. in the market, it will be difficult for the

The use of a breakaway seal will also ensure

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the quality and hygiene of the business Aqua business to mark its presence among the

Mineral. customers.

Recycled bottle: Aqua Mineral will use Production cost: The cost of production is

innovative technologies to produce recycled going to be higher in the respective company

bottles which will be less harmful to the as it will be utilising innovative technologies

environment. It can be considered a strength as to maintain the sustainability of the bottles.

people nowadays has become more aware of Hence, the cost can be a shortcoming for the

the sustainability of nature new business.

(corporatefinanceinstitute, 2022).

Opportunity Threat

Emerging markets and customers: The new Economic instability: The unfavourable

business Aqua Mineral requires a focus on the policies of the government and economic

expansion of the business in order to emerge in downturn can be a threat to the new start-up

different markets and attain more customers. business.

The quality of the water as well as the Competitive market: There is various

packaging will be able to attract more competition in the market in the context of the

customers. bottled water company. It can affect the profit

Attracting investors: The new business will and revenue of the new business (Sari et al.,

be able to attract investors as well with the help 2021).

of its sustainable approach. The use of recycled Lack of customer base: The new business

products is a beneficial factor which will be does not have a proper customer base. Due to

able to grab the attention of investors. the lack of knowledge of the customers
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Effective management: The effective team of regarding the new business, it will be difficult

management will be able to promote the for Aqua Mineral to attract customers.

business on both offline and digital platforms

to enhance the brand image (Ersek et al.,

2022).
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PESTLE analysis on the business of the Bottled water industry within

the UK

The PESTLE analysis is a framework that will evaluate the business strategies of Aqua Mineral to

analyse the external environment of the new start-up business. There are various external factors

such as government policies, taxation, political condition, and so on, that can impact the activities

of a business (Markgraf, 2023).

Political factors: The role of government is crucial in terms of impacting the activities of a

business. There are various rules and regulations that a new business has to follow in the United

Kingdom. The sanitary condition requires to be maintained by the new business. The new business

Aqua Mineral requires to maintain regulations regarding the environment and contamination.

Economic factors: The recession in the economic aspect can negatively impact the activities of a

business. It leads to unemployment and the loss of jobs for several people. The recent outbreak of

the pandemic caused a reduction in the revenue and income margin of the UK. Economic

turbulences like inflation can hugely affect the start-up business named Aqua Mineral (David,

2023).

Social factors: Bottled water contains many harmful elements such as bacteria, arsenic, and so on.

The system of water filtration requires to be available in the companies of bottled water. The

promotional strategy also falls under the social factor that is important for any business. The bottled

water company Aqua Mineral requires to identify its social factors such as target customers and

completion, before starting its operations in the market.

Technological factors: Technological factor is crucial for any kind of business. The specific

company is utilising different innovative technologies to produce sustainable packaging. The water
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will also be pure and germ-free with the help of innovative technologies. The leakage in the pipe

will also be detectable by effective technologies.

Legal factors: There are various laws regarding the level of chemicals in bottled water. Hence,

the respective industry requires to follow certain rules and regulations in order to deliver pure

water to the customers. The sanitary law is another major regulation that the specific bottled water

company needs to follow.

Environmental factors: The concern about the environment is growing nowadays. The use of

plastic is becoming prohibited in several countries. The bottling industry requires checking its

packaging and manufacturing process in order to maintain sustainability in nature. Along with that,

there can be natural calamities, such as fluctuation of water, which negatively impact the Ph level

of the water (Abdissa et al., 2022).

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Recommendations

The demand for bottled water in the country is increasing day by day and the respective companies

are facing tough competition for surviving in the industry and huge obstacles are in their way for

starting up the business. The Company like "AquaMineral" is going to commence their new

business in the UK market and various suggestions or recommendations are required for excelling

in this business and they are stated as follows:

Capital Requirement: The business is several issues regarding the number of investments as the

market size of bottled water companies is pitching the industry to a great extent for which there is

a great requirement of capital and investments such that the company will be able to grow and

expand their operations of productions and as well as deploying the appropriate methods for

enhancing their operations with great techniques.

Online marketing and selling: The Internet has provided a great opportunity for businesses

whether they are existing ones or the ones that are forming new companies and are eager to sell

their products to the targeted market (Smyth, 2022). Everything is getting digitized and it would

be a great opportunity for the “AquaMineral” to promote its products by the means of online

marketing as well as sell through various social media handles like Facebook, Instagram and so

on. This will enable them to capture a large customer base as most of the population is using this

media for making social connections.

Quality of Bottle and water: The majority of people are interested in using eco-friendly products

as they are concerned about the environment. There is an opportunity for the company to start

using bottles that can be reused and don't harm nature (Clawson, 2021). They should be focusing

on the quality of the water and enhance the quality of their products by focusing on their needs for

tap water and them making them use it after purifying.

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Conclusion

The demand for packaged water is increasing in the UK market. Along with that, the consciousness

of health of the people has also enhanced. Hence, the new start-up business will sell bottled water

that will maintain proper sanitary conditions. The above context has focused on the market

structure of the new business, which is a bottled water company, named Aqua Mineral. Both the

internal and external factors that can affect the business both positively and negatively have been

discussed here. Furthermore, a recommendation has been provided to the new start-up business in

order to deliver better service in the market.

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References

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the recycling of used plastic bottled water waste management. Sustainability, 14(13), p.7650.

Bandy, L.K., Scarborough, P., Harrington, R.A., Rayner, M. and Jebb, S.A., (2020). Reductions

in sugar sales from soft drinks in the UK from 2015 to 2018. BMC medicine, 18(1), pp.1-10.

Clawson, T., 2021. Green Bottles—Can A Consumer Products Company Help Stem The Flow Of

Ocean Plastic?. [Online] Available at:

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https://www.howandwhat.net/pestel-analysis-water-industry/ [Accessed 31 January 2023].

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Studies, 58(2), pp.113-120.

Klemeš, J.J., Fan, Y.V. and Jiang, P., (2021). Plastics: friends or foes? The circularity and plastic

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Pacheco-Vega, R., (2019). (Re) theorizing the politics of bottled water: water insecurity in the

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