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Problems at Perrier Perrier may well be the iconic brand in the world of mineral weewees. However, regardless of the profile of the brand, the keep company that produces the bottled sparkling mineral water is having a tough time. It is the focus of what ace commentator describes as a vicious struggle underway for the soulfulness of the business. The origins of the Perrier company can be decipherd to 1898 when a local doctor, Louis-Eugene Perrier, bought the mineral water source near Vergeze, France.The company grew steadily but demand sincerely escalated in the late 1980s when it became highly fashionable and championed by a range of admirers including Wall Street yuppies. At its peak (1989), Perrier sold 1. 2 cardinal bottles (830 million in 2003), almost half to consumers in the coupled States. The boom years were good for the Perrier role players. Buoyant profits were associated with regular afford rises, social benefits, and extra holidays. However, in 1990, the findin g of a minute trace of benzene in a bottle led to the collapse of U. S. sales.By 1992, yearbook output had halved and the company was close to bankruptcy. At this point it was bought for $2. 7 billion by nuzzle, the worlds largest food company. Attracted by the combination of bottled water as a fast-growing business and the worlds better(p) known mineral water brand, nest identified Perrier as an charismatic takeover target. However, Perrier struggles to turn a profit. In 2003 its pretax profit margin on $300 million sales was only 0. 6% comp ared with 10. 4% for the Nestle Waters division overall. In 2004 it again recorded a loss.The Perrier manufacturing plant is on a 234-acre site on the Mediterranean coastal unmixed near Nimes. The factory itself is rather nondescript, so much so that from a distance it could be mistaken for a power station or auto plant. Perrier employees work a 35-hour week and earn an average yearly salary of $32,000 which is good for this part of Fra nce and relatively high for this industry. However, the average Perrier worker produces only 600,000 bottles a year, compared with 1. 1 million bottles at Nestles two other international French mineral-water brands (Vittel and Contrex).Relations between management and workers are not good. Almost all (93 percent) of Perriers 1,650 workers belong to the CGT, a centre that is viewed by the management as consistently resisting Nestles attempts to amend Perriers financial performance. According to Nestle CEO Peter Brabeck-Letmathe, We confuse come to the point where the development of the Perrier brand is endangered by the self-possession of the CGT. Jean-Paul Franc, head of the CGT at Perrier, sees the situation differently. In regard to the companys plan to cut 15 percent of its workforce he protests, Nestle cant do whatever it likes. He says, There are men and women who work here Morally speaking the water and the vaunt stored below this ground belong to the whole region. When , in 2004, Danone launched a bracing product (Badoit Rouge) that was designed to directly compete with Perriers new super-bubbly brand, Eau de Perrier, Perriers management put bottles of Badoit Rouge in the factory cafeteria. This had been done to punctuate the point to Perrier employees that they were involved in a head-to-head battle for that respite in the market.However, this act was not well received. It was a provocation, recalls one Perrier hand truck driver. We took the bottles and dumped them in front of the factory directors door, so he couldnt get into his office. QUESTIONS 1. Identify the key elements of the resistance to change describe in this situation. 2. Construct a change management strategy for dealing with this situation. In so doing, identify what approach(es) to managing resistance you recommend and provide a clear justification for your choice.