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Fiji Water Essay

Essay by   •  July 8, 2015  •  Essay  •  954 Words (4 Pages)  •  544 Views

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Non-Market Issues

Fiji Water, which is located in Fiji Island is facing in my opinion two non-market issues which are: problems with the Fijian government and population, and the California lawsuit.

The problems regarding the Fijian government are due to the fact that the government wants to increase water-extraction taxes from one-third of a Fiji cent per litre to 15 Fiji cent per litre. Where as the problems regarding the Fijian population are caused by environmental groups and critics that think Fiji Water are indirectly responsible for the typhoid outbreaks and parasitic infections due to poor pipe infrastructure, inadequate access to safe drinking water, and Fiji Waters direct access to the artesian aquifer in the Yaqara Valley. The second market issue is the California lawsuit which accuses the company about its false advertising that its production of bottled water is carbon negative and that they are environmentally friendly.

Strategies

According to Fijis president, Frank Bainimarama, Fiji Water is not concerned about the country itself and the Fijian population. Therefore, in my opinion, an efficient strategy is a strategy that acquires the government and the populations appreciation of Fiji Waters works to the country that will benefit both parties (government and population). As mentioned previously in the non-market issues, the population claims that Fiji Water is indirectly responsible for the typhoid and parasitic outbreaks and that the government does not have the means to give the population clean tap water. Hence, in order to prove the population wrong that Fiji Water cares about its country, the company should volunteer in providing clean tap water with good filters and pipes. Of course this solution is costly to the firm and it must ask the government for something in return. Fiji water should leverage  the government on its investment to the communitys health in return to eliminate the tax increase and possibly try to reduce it  ( by reducing taxes, profits increase) since it will be bearing costs. As a matter of fact, the government might not be convinced to reduce the tax because it will also be losing profits. However, the company should remind the government how Fiji Water provides employment to the citizens as well as 20% of the countrys exports and 3% of GDP sales. Moreover, it should pressure the government that the option of moving the business to another location is always a possibility if it does not reduce the taxes due to the costly favour it is doing for the government. Ideally, this strategy should be a written contract between the government and Fiji Water so that none of the parties breaks the agreement, and if they did then they should agree on certain penalties. The company would gain the publics respect and appreciation by providing them clean tap water and reduction in health issues.  This strategy will also put he government on the companys side for a long-term relationship since it has saved it from a costly project of providing clean water to the public and providing jobs for citizens and profits for the country. The following strategy should be published and talked about in newspapers. By publishing it, people than are concerned with philanthropy and care about the environment will favour Fiji Water and most probably buy its bottled water therefore increasing market share and profits that will benefit the company as well as the government (export % and GDP).

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