About the company

Ok bottling and beverage Share Company is a bottled water manufacturing company that is established,
in 2014, in "Guraghe" zone, SNNP, Ethiopia. It mainly aims in targeting the Local Ethiopian market
currently as well as most Eastern African region, in the long run thereby addressing the quality bottled
water needs of this target segment. Quality water from the source coupled with the latest technology of
production makes it unique to satisfy the real desire of its customers.

Fiker pure natural spring water is mined from natural spring water of Jejer, at Guraghe chained
mountain, SNNP region Ethiopia, at "Exia" wereda. Although we are working to produce other product
lines, Ok bottling and beverage .C currently produces 600ml, 1000ml and 2000ml size of bottled water.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a
technique for assessing these four aspects of your business. SWOT Analysis is a tool that can help you to
analyze what your company does best now, and to devise a successful strategy for the future. SWOT can
also uncover areas of the business that are holding you back, or that your competitors could exploit if
you don't protect yourself.

A SWOT analysis examines both internal and external factors – that is, what's going on inside and
outside your organization. So some of these factors will be within your control and some will not. In
either case, the wisest action you can take in response will become clearer once you've discovered,
recorded and analyzed as many factors as you can.

In the case of Ok Bottling and beverage S.C/ Fiker Water

SWOT analysis

Strength:

The Fikir Water Company is known for its marketing expertise and the company has always followed a
great marketing strategy that is responsible for bringing the success to the company for in few months
of production. The biggest strength of Fikir Water is its brand. It has taken a lot of effort and good
strategy to create the widely known brand. Apart from this, there are various strategies that Fikir Water
has in order to achieve competitive advantage using its strategic capabilities. These strategies include:-

 Marketing and branding strategy: Healey (2008) defines a brand as a promise of satisfaction and
emphasis that good branding reinforces reputation, generates loyalty and assure quality. Few
companies in this world have developed a brand as strong as Fikir Water. The company has used
its marketing resources to create a brand that is widely known and has become the biggest
competitive advantage for the company. Fikir Water has been successful in creating brand
loyalty among its consumers. This is a result of sustained marketing efforts starting from early
20thcentury. Fikir Water has adopted innovating marketing techniques right from the times of
Candler and Robert Woodruff. Apart from usual advertising through bill boards and newspapers,
Fikir Water focused on organizations, universities and colleges and this increased sales
while promoting the brand name.

Part of what is going to count as positives for Fiker Bottled Water is the vast experience of the
management team. They have people on board who are highly experienced and understands how to
grow business from the scratch to becoming a national phenomenon.
The location place a significant role in the company’s. The company’s plant is located in SNNPR state
Guragay Zone in a place called Agena which is suitable are to have clean and portable spring water.

So also, the wide varieties of bottled water in terms of flavor, contain, packaging and size that is
produce, the large national distribution network and of course our excellent customer service culture
definitely counts as a strong strength for the business.

Weakness:

A major weakness that may count against us is the fact that the company is a new bottled water
production company and we don’t have the market capacity to engage in the kind of publicity that we
intend giving the business especially when big names like Yes Bottled water, Aquaddis, Abyssinian and
Wow bottled water. This company’s already determine the direction of the market both in the urban
and rural region of the countries’.

Though the company has been hugely successful, there are various weaknesses that need to be
addressed by the company. These are:-

 Green production- Green purchasing means focusing more on environmentally-conscious

practices such as eliminates waste, recycling and reuse, and substituting materials without
affecting material Opportunities Inorganic Growth and Acquisitions: The Fikir Water Company
has been acquiring various local companies aggressively over the last few years. Also, the
company-has increased its stake in major bottling operations. This has given the company more
control over the entire value chain and allows it to align the goals of these bottling operations
with those of the company. The company acquired other companies in almost all major markets.
 Production processes can help to reduced work-in-process inventories. The production process
help to reduce work-in-process when each of the machines has maintaining work overload. It
can maximize production rate even there are produce in large quantity of part in the system. Ok
bottling production lines are completely automated and equipped with the state-of-the-art
bottling technologies. They are using the automated machines to control the amount of quantity
produced per day so that overproduction is less occurs over a time. Thus, it would be lower the
process inventory. Work-in-process inventories requires storage space to store the excess
products which determined the product demand is stable enough to justify high
investment in specialized equipment. Appropriate in control quantity of products
produced is important to overcome shortage supplies of goods and reduced inventory cost

Opportunities:

The opportunities for bottled water production companies with a wide range of bottled water products
are enormous. This is due to the fact that almost all Ethiopian have access to bottled water.

As a result of that, the company were able to conduct a thorough market survey and feasibility studies
so as to position our business to take advantage of the existing market for bottled water and also to
create our own new market. Targeting the people of SNNPR as their starting target market fiker water
was able to create an enormous opportunities to be able to create a new market and move forward to
penetrate the market. FIKER bottled water use an “enormous word of mouth” to their advantage to
create a solid name for them self along with becoming an uprising bottled water company in the
industry.
The company's biggest competitive opportunity comes from the strong brand that has been developed
over with few production years of consistent marketing efforts. Economies of scale and the network
with suppliers and distributors also contribute to the success. Marketing and advertising has been the
most important function that has taken Fikir water new heights. The company has adopted
innovating marketing techniques. Apart from usual advertising through bill boards and
newspapers, Fikir water focused on organizations, universities and colleges and this increased sales
while promoting the brand name.

Fikir Water has developed its distribution network all over the world. It follows two types of distribution
strategy:

-Direct selling: In this method, Fikir Water supplies various products to retailers. These retailers may be
retail stores, restaurants, cinema halls etc. The company uses its own vehicles to deliver the products.
Direct selling brings in only small part of the revenue.

-Indirect selling: Most of the revenue comes from this channel. Fikir Water gets into partnership with
various distributor agencies. The company supply products to these distributors, who then make them
available to the retailers.

In the traditional model, products are transferred from bottling plants to large distributors.
These distributors then transport the products to retailers or smaller distributors. Small distributor node
is added in case of rural areas or areas with low density population. The small distributors then supply
the product to retailers

Threat:

Just like any other business, one of the major threats that we are likely going to face is economic
downturn and unfavorable government policies.

It is a fact that economic downturn affects purchasing power. Since the bottles raw material are
imported from different countries, the economical downfall of the country restricts the amount if
production within the company.

Another threat that may likely confront us is the arrival of a new bottled water production company in
same location where ours is located. This has create an increase in the concentration of the market both
within the capital city and other cities in the country.

The unstable political conflict within the country significantly affect the company. AS mention above the
location of the plant is 192 K.M far from the capital city, Addis Ababa to the south west side of Ethiopia.
The political conflict has created a situation when material and product cannot be able to move in or out
of the city of Agena, this creates a threat for the company in the market share.

Changing trends: In bottled water drinks, is the only alternative product was water source from
municipality. But the trend is to move towards healthier drinks and there is a big threat of substitution
facing Fikir Water. Possible substitutes include Eden, Wow, Yes, One, drinks. The company has already
taken steps to address this issue by launching products in the category of healthy drinks.
Dependence on the ground water: this cause a great threat to the company in overall performance and
the survival of the company.

PESTEL

PESTEL (Political Economical Social Technology Environment Legal) analysis is one of the macro strategic
analysis techniques to critically examine the business strategy, evaluate the product, etc. This technique
is used to analyses the all-round macro-environment factors which impact the decisions being taken by
the management of any organization. New Laws, government policies, demographic changes, tax
changes and trade barriers are few examples of macro changes

Political Factors

Fikir Water is subjected to strict regulations since its products come under food category. However, few
changes in law are expected to impact Fikir Water. Following are some such factors:-The issue of
negative impact of Fikir Water manufacturing plants on environment has been highlighted in as negative
impacts. Laws for environment protection and stringent regulations in this regard can impact the
production process. Fikir water can work towards minimizing this impact by improving the efficiency
of its processes and reducing wastage.

The modifications in the rules and regulations by the government in various functions effect the way
business would operate. For example, change in taxation requirements like new tax laws, tax rates, or
revised interpretations of the tax laws, modification of accounting standards, and new or
modified environmental laws in global and local regulations.

Here we will mention two political factor that has a factor.

1. The political conflict that has been ongoing within the country has created an unstable
environment for the company. With crime of hijacking cars, murders and different life
threatening issues during the transportation of good from the plant located in Agena the main
storage in Addis Ababa. In addition this political factor has also affected distribution of the good
to different region within the country.
2. The new law accounted on the start of 2015 has create a problematic situation for the company.
The usage of masterbatch (MB), which is used for coloring plastic bottles in the bottled water
industry, is to be halted if the new recommendation of the relevant government body findings is
to push through. Masterbatch (MB) is used as a marketing strategy to make the bottled water
more desirable.

Economic Factors

Bottled water sector has a competitive environment and can be affected by the price changes, interest
rates, and income distribution easily. Since the product is not very profitable, any little price or currency
change would affect the sector. As the machines and raw materials are imported, currency plays an
important role. There is aggressive price competition in the bottled drinking water market. In the studies
aimed at examining the factors affect the consumers’ preference of packaged water, it has been stated
that there is a relationship among age, income, level of education and buying behavior. Moreover, it has
been specified that the quality, brand, price and package of the water also affects the consumers’
preference.

The main factors that constitute cost in the packaged water sector are; finding and drilling water,
deletion, storing, transporting, re-storage, distribution, consumption, recycling of carboys and wastes,
making them available again (cleaning for carboys, recycling for pet bottles) - storage, re-delivery to
water filling facilities; also machinery, equipment, human labor, taxes, official bureaucracy which used
in processes form cost items.

Following economic variables can impact Fikir water-Economic downturn in a country is going to have a
negative impact on sales of Fikir Water. The impact on the company would be especially huge since its
products are non-essential.-Various macroeconomic factors such as inflation and labor price would
impact operations of Fikir water. Due to low income per capita the people would not spend on products
such as bottled water because of alternative drinking water

Social Factors
The production and consumption of bottled water entails various impacts on health, environment and
society. The health risks are related not only to the quality of the water, but also to the quality
of containers and to storage conditions. The environmental hazards are linked to the energy used
and resources consumed in the processing, bottling and shipping of bottled water and to the huge
amounts of bottle waste which is not recycled. These, in turn, raise social, equity and justice questions,
such as who is being exposed to the risks and who should pay for the damages. It has grown
dramatically in the last decade and today millions of people around the world, in developed and
developing countries, consume bottled water regularly.

As one of the fastest growing bottled company in the country, bottled water sector is shaped in parallel
with the needs and habits of consumers. It is preferred by consumers rather than sugary-carbonated
beverages that are perceived as harmful to health. According to Karakuş et al. (2016), changes in
packaging (expansion of glass packaging, production of special lids for children, etc.) and differences in
the structure of water (pH, degree of hardness) effect consumers' purchasing decisions. These new
habits have led to the growth of packaged water categories in global markets in recent year

The Fikir water Company can be impacted by following social variables -Bottled waters are considered
unhealthy and people are getting health conscious. This is both a threat and an opportunity for Fikir
Water. While sales in traditional brands might go down, Fikir Water can introduce new products in new
categories-The company has witnessed opposition from social groups in some countries due
to the environmental issues surrounding its production.-Social and culture of a region has a huge
impact on food habits of its citizens and this would impact the portfolio that Fikir Water can introduce in
the region

Technological

Technology is used at every step of Fikir Water value chain-syrup manufacturing, bottling operations and
storage at retail shops. Following technological factors have an impact:-Fikir Water’s strength is
marketing and new marketing and advertisement channels have a big impact on the company. Fikir
water has been quick to embrace new mediums that have developed over the years - radio, television
and now internet. It is important for the company to connect to the customers through different
channels.-Different type of packaging has helped Fikir Water drive sales which are easier to store and
transport.-New machines and processes impact the manufacturing operations. Adoption of new
technology allows a company to manufacture more efficiently, with better quality and in greater
quantity. The bottled water need to be cooled before consumption. Therefore, consumption is limited to
the places that can provide the facility of cold storage
5.1. Competition

There are many bottling companies for bottled water in Ethiopia. They compete in almost all the
markets in the country. There are other players in various beverages category, but none of them as large
as Fikir water. The new competition in the industry is to increase the product portfolio and introduce
new variants of healthy drinks. Most of the strengths and weaknesses of bottling companies are similar
to those of Fikir Water. Others enjoys good brand value as well as economies of scale. At the same time,
it also has come under criticism for health and environmental issues. While Fikir Water operates almost
exclusively in beverages segment, some of them derive a big share of total revenues. This can potentially
provide opportunities to take advantages of synergy among various products. While Fikir Water is
enjoyed by people from various age groups, targets young people from its package.

Threat of new Entrants

Threat of new entrants is very low in this industry and the following factors are responsible:

 Brand name: It has taken these companies decades to build their brand and it's not easy for a
new company to emulate that.
 Distribution channel: Most of existing companies have wide distribution channel across the
world and it's difficult to match up to that.-
 Huge initial investment: The high cost of setting up manufacturing plants, transportation
channel and distribution channel is a big barrier for new entrants.

Economies of scale: All the existing companies enjoy large economies of scale that help in keeping the
costs down. A new entrant would not be able to match the cost of the biggies and would be forced out
of the business.

Threat of substitute products

The threat of substitution is high for bottled drink industry with products like bottled water, juices, tea
and coffee readily available. To take care of this, The Fikir Water Company has increased its presence in
these sectors as well. For people who take soft drinks for its caffeine, tea and coffee can be
easy substitutes. In some cases, alcoholic beverages such as beer can be a substitute as well. It costs
nothing for a customer to substitute a bottled water drink with another drink and hence there is a high
threat of substitution. Many people are moving towards healthier drinks and substituting soft drinks
with juices etc.

Supplier power

Supplier power is low in case of Fikir Water Following are the suppliers for the company:

 Raw materials of ground water is from Zebidar terara (mountainous) area.-

 Bottling equipment manufacturers are suppliers for Fikir Water since the company owns stake in
many bottling units. These equipment’s can be supplied by many companies and hence they
have low bargaining power.
 Other factors such as labor, power etc. would not be a problem for the company.

For all the inputs, Fikir Water has higher bargaining power since it enjoys economies of scale and orders
in huge quantities from the suppliers.
Buyer Power

In case of the Fikir Water Company, the bottling units are the buyers since the company sells the syrup
to them and rest of the activities are undertaken by them independently. Bottling partners have low
degree of bargaining power with Fikir Water. Though the company is dependent on bottlers
for selling their product to the end consumers, they can replace the bottling partners. To start the
business, the bottling company has to invest a lot and this creates a lock in for them, reducing their
power

The power of mass retailers is moderate. On one hand, the brand of Fikir Water is very strong and the
retailers have to store the product to satisfy the customers. On the other hand, the retailers can switch
to other drinks without any cost and stop storing the products of Fikir water
The SWOT Matrix

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool that

helps managers develop four types of strategies: SO (strengths-opportunities) strategies, WO
(weaknesses-opportunities) strategies, ST (strengths-threats) strategies, and WT (weaknesses- threats)
strategies.3 Matching key external and internal factors is the most difficult part of developing a SWOT
Matrix, as it requires good judgment—and there is no one best set of matches. Note in Table 8-1 that
the first, second, third, and fourth strategies are SO, WO, ST, and WT strategies, respectively.

SO strategies use a firm’s internal strengths to take advantage of external opportunities. All managers
would like their organization to be in a position in which internal strengths can be used to take
advantage of external trends and events. Organizations generally will pursue WO, ST, or WT strategies to
get into a situation in which they can apply SO strategies. When a firm has major weaknesses, it will
strive to overcome them and make them strengths. When an organization faces major threats, it will
seek to avoid them to concentrate on opportunities.

WO strategies aim at improving internal weaknesses by taking advantage of external opportunities.

Sometimes key external opportunities exist, but a firm has internal weaknesses that prevent it from
exploiting those opportunities. For example, there may be a high demand for electronic devices to
control the amount and timing of fuel injection in automobile engines (opportunity), but a certain auto
parts manufacturer may lack the technology required for producing these devices (weakness). One
possible WO strategy would be to acquire this technology by forming a joint venture with a firm having
competency in this area. An alternative WO strategy would be to hire and train people with the required
technical capabilities. ST strategies use a firm’s strengths to avoid or reduce the impact of external
threats. This does not mean that a strong organization should always meet threats in the external
environment head-on. An example ST strategy occurred when Texas Instruments used an excellent legal
department (a strength) to collect nearly $700 million in damages and royalties from nine

Japanese and Korean firms that infringed on patents for semiconductor memory chips (threat).

Rival firms that copy ideas, innovations, and patented products are a threat in many industries.

WT strategies are defensive tactics directed at reducing internal weakness and avoiding external threats.
An organization faced with numerous external threats and internal weaknesses may indeed be in a
precarious position. In fact, such a firm may have to fight for its survival, merge, retrench, declare
bankruptcy, or choose liquidation.