Strategic Fiji Water Essay

8117 words - 32 pages

Fiji WaterExecutive Summary:There are multiple recent strategic issues that the bottled water company Fiji Water is facing. The economic recession has led to a change in consumer purchasing trends, and the bottled water category is not as stable financially as it used to be. Environmental issues, such as waste and pollution, are also affected Fiji Water and its competitors. Bottled Water companies are attempting to shift packaging and shipping to more ecologically friendly materials and modes, as consumers favor environmentally sustainable products. Additionally, as consumers focus on obtaining healthier lifestyles and diets, they have begun to question the safety and purity of the water that bottled water companies are producing. Fiji Water has been affected greatly by all of these issues, as well as negative press about the socio-economic conditions of their souring location, and in 2008 was forced to layoff 40% of their staffing resources. With limited resources, an action plan going forward must be cost efficient and extremely effective. By analyzing and critiquing four potential strategic options, a rational next step for Fiji Water can be discovered. By supporting this plan with marketing tactics and communication, it can attempt to stimulate growth for the company.Current Overview:History: Fiji Water is bottled water artesian water that was founded in 1993 in Colorado and first produced and sold to the world in 1996. It is sourced from the Artesian region of the Fiji Island, packaged, shipped and sold to distributers across the world in various sizes. In 1997 it was introduced to the US in the California and Florida markets (answers.com). Today, its headquarters are located in Los Angeles, its President is John Edward Cochran, and it is a wholly owned subsidiary of Roll International Corporation (RIC). Roll International Corporation is a private, $2b corporation with over 4.000 employees in industries such as agriculture, consumer packaged goods, floral services and more (www.roll.com/about-us.php). The acquisition by RIC occurred in 2004 and is stated to have cost $50m (Beverage Industry, 2004). Additionally, the fist year of the acquisition was an enormous success when Fiji Water sales increased 50% (Advertising Age, 2009). Considering the beverage industry is extremely crowded, this was a large feet.Industry: The beverage industry overall had experienced a cumulative increase of 29% between 2003-2007 and was stated to be worth $39b (See table 2). Bottled water sales grew from 4,725m gallons in 2000 to 9,418m in 2008. Additionally, the category won over 24m new customers during this time (Mintel Oxygen, America's Changing Drinking Habits - US-February 2009). However, as the worth of the bottled water category increased steadily at an average of 53% between 2005-2007, 2008 saw only a 9% increase (see table 3).Segment: Within the beverage industry, the bottled water category is split into 3 major segments: major manufactures which account...

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