In the contemporary world the problem of scarce water resources is growing to be more and more important. In fact, even the right to have access to water is nowadays sometimes argued and many corporations are attempting to gain control over the water-related industries. In this respect, the production and bottling of mineral water is considered to be an extremely important market many companies are struggling for. Naturally such a competition leads some companies to ruin while others benefit greatly gaining larger shares of the market.
The problems of WWC
One of the companies that faced great problems is WWC, the company that operates in the UAE market of the mineral water. In fact, it should be said that in recent years the company has faced the real threat of bankruptcy and its financial position has deteriorated dramatically. In this respect, it is necessary to briefly discuss the current situation and find out the causes of the problems WWC ahs faced and possible solutions of the problems the company deals with.
First of all, it should be said that WWC is the company basically operating in the national market of the UAE, in other words the company’s market is strictly localised that naturally prevents WWC from significant progress and growth of its market share. Furthermore, the company has established control over a few resources of water in the region generally scarce in the resources of water. To put it more precisely, the company failed to establish control over possibly larger number of water resources within the national market. Consequently, the further growth of the company gradually becomes the problem of the lack of the possibility to physically enlarge the WWC’s capacity.
At the same time, it is necessary to remember that the company basically focuses on the local market and local resources but they are obviously insufficient. In such a situation, the company faces the problem of the insufficient number of well-qualified specialists able to work at the production of mineral water of the highest quality. Not surprisingly that in some cases WWC has simply to rely on foreign specialists. In the same way, the problem concerning the essential machinery and equipment for production and bottling of mineral water is solved, i.e. the company mainly bought licences and equipment abroad that naturally makes WWC technologically retarded and dependent on its foreign partners.
Finally, it is necessary to underline that the company also faces a number of marketing problems. Among them, probably the most serious is the problem of the company’s network, which could provide an efficient distribution of WWC’s products to customers. As a result, the company has obviously inefficient network and its products are not promoted enough within the national market. The situation is deteriorated dramatically by the increasing impact of competitors on the local market, among which may be named Masafi Mineral Water, the leading local producer of mineral water in the region, as well as multinational producers of mineral water, such as Perrier, which also are very interested in the Middle East market. Not surprisingly, on facing such problems, WWC turns to be about to brake up and be totally ruined.
The partnership of WWC and Masafi Mineral Water
Obviously, the difficulties of WWC have forced the company to look for possible solutions. In such a situation, the partnership with Masafi Mineral Water seems to be particularly perspective, especially if it is a merger of both companies. In all probability, WC has a little choice to do: on the one hand, it has a perspective to brake up, on the other hand, it has to find a reliable partner on possibly more profitable conditions.
In this respect, the choice of Masafi Mineral Water is quite logical and very perspective. There are several reasons that makes the partnership profitable for both companies, especially for WWC. First of all, it should be said that Masafi Mineral Water is the company operating in the same market that WWC does. Moreover, Masafi Mineral Water is the leading company of the region, i.e. it is not only the leader in the UAE market, but also in the Middle East market at large. Consequently, the company has experience of work in the market of the region and, what is probably more important, it is a leading brand in the Middle Eastern countries.
In such a way, the partnership of WWC and Masafi Mineral Water provides the former with the possibility to profit from the popularity of the brand of the latter. Moreover, WWC will have an excellent opportunity to profit from the efficient network developed by Masafi Mineral Water and it is needless to say that the company will also have got an opportunity to overcome borders of the national market and enter the markets of the neighbouring countries using MMW infrastructure and network.
Furthermore, it should be said that such partnership will profitable not only for WWC but also for MMW because the latter can gain practically total dominance in the national market of the UEA and minimize the opposition of its competitors in the region.
Also it is extremely important to underline that network is not the only benefit for WWC. The company will also have access to MMW’s technologies, machinery and equipment that minimizes the company’s dependence on its foreign partners. At the same time, MMW’s specialists may contribute to the professional growth of WWC’s staff.
Thus, taking into account all above mentioned, it is possible to conclude that nowadays the competition in the mineral water production and distribution is constantly growing, and, taking into consideration the scarcity of water resources, it may be a key factor contributing to sustained development of companies operating in this segment of the market. The example of the mineral water company discussed above reveals the fact that relatively small companies have little chances for commercial success even within national market while larger, multination corporations have better opportunities for survival and commercial success.
DeGregori, Thomas R. Origins of the Organic Debate: Vitalist Junkscience vs. Scientific Inquiry. Ames: Iowa State Press, A Blackwell Scientific Publisher, 2004.
Masafi: The Leading Producer of Bottled Mineral Water in the Gulf. http://www.africa-business.com/profiles/masafi.html
Shiva, Vandava. Water Wars. Delhi: South End Press, 2002.
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