Abstract

In 2014, VEOLIA Japan was an established French-Japanese joint-venture on the Japanese water segment: the firm’s activity was to take care of the water management of municipalities (drinking water and wastewater) and industries (wastewater and other liquid residues). The French firm came into Japan in 2002 after deregulation of the Japanese water market. 12 years later, it generated €400 million annual sales (56 billion yen in 2014) and had 3,800 employees for 1.1 million customers across Japan. The same year, Veolia Japan contemplated a diversification strategy for its activities and reflected about expanding its activities to energy management for municipalities and waste management for industries. But the arrival of serious competition on its main market or some very close fields (such as Mitsubishi) raised an important challenge for Veolia. Because of the worldwide decreasing activities and budget, the firm knew it would not be able to dominate all its markets if it chose to expand its activities, in the current context. The case thus raises the following question: Should Veolia stay only on the water segment to focus its investments and efforts, keep aggressive prices and high level of R&D or expand its activities and face the risk to be caught back and overpassed by competition?

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