Case | HBS Case Collection | June 2011 (Revised December 2013)
FIJI Water: Carbon Negative?
Francesca Gino, Michael W. Toffel and Stephanie van Sice
Seeking to go beyond global best practices in reducing environmental impacts, FIJI Water, a premium artesian bottled water company in the United States, launched a Carbon Negative campaign that would offset more greenhouse gas emissions than were released by the company's operations and products. The case examines the controversies surrounding this program as well as the program's impacts on the environment and FIJI Water's brand image. The company also faced decisions regarding how to best manage its relationship with the Fijian government, which recently dramatically raised imposed export taxes and could limit FIJI Water's access to water, its primary raw material. The case enables students to better understand the challenges of implementing an environmental strategy and of negotiating with parties that control raw materials, and invites discussion of the effectiveness of various approaches and the general lessons for the management of companies seeking to operate in an environmentally responsible manner.
Keywords: Corporate Social Responsibility and Impact; Environmental Sustainability; Brands and Branding; Negotiation Tactics; Business and Government Relations; Corporate Strategy; Food and Beverage Industry; United States; Fiji;
Unformatted text preview: Case Study FIJI Water Question 1 hat factors contributed to the marketing success of FIJI Wate Analyse the 4 Ps and the positioning of the FIJI Water brand. FIJI´s 4 P´s FIJI´s success factors Innovative packaging Premium product pricing Effective distribution Image-creating publicity Good market environment Highly skillfull marketers Change in customer preferences “promise of good health, refinement, status, and exclusivity“ Question 2 What is the ethical and socially responsible marketing? Why should marketers increasingly be concerned about CSR issues and sustainability? Ethical and Social CSR is promoted as a business model to help companies regulate themselves (because of the impact on general public) as well as establishing a strong relationship with the customer. What is ethics? Not only profit-driven Reinforce social and ethical values for citizen benefit CSR Issues and Sustainabilities Ethics as a selling point Component of brand image Image of the organization Easier access to information (customer awareness) Green movement Differentiation from competitors Attract and retain talent Question 3 What does it mean for FIJI Water to go carbon negative? What do think about it? How does one measure and report carbon footprints of products? Is the carbon footprint of FIJI Water big compared to other products? What does it mean to go carbon negative? Save more CO2 emissions than produced More investments (costly) FIJI Water is obligated to do it More research and development (innovations) Restructuring Improve transparency / consumers Our Thoughts Pros Cons Ambitious goal (company Overpromising Public pressure vision) Could lead to competitive advantage Right concept, but poor implementation and therefore a risky strategy Measurement of Footprint Systematic aquistion of CO2 emissions along the complete product lifecycle Could be measured by special studies of institutions Part of annual report (voluntary sustainability report) Carbon Accounting Comparison FIJI´s emissions: 85,400 metric tons CO2 in 2007 Hard to compare due to: Different products categories Lack of international standards Lack of information Not possible to compare to others companies but important because of marketing reasons! Question 4 What is greenwashing? How can it be identified? Do you think FIJI Water is engaged in greenwashing? From your point of view, what could the company do to gain environmental credibility? What is Greenwashing? “Disinformation disseminated by an organisation so as to present an environmentally responsible public image.“ “Conduct that is misleading or deceptive or is likely to mislead or deceive.“ How to identify Greenwashing? Specific parts of a product / project are communicated and the rest is not mentioned Transparent verification of marketing claims Contradiction between marketing and reality If the natural part is overstressed Greenwashing at FIJI Water? Pros Cons No detailed description of the Carbon negative goal Concrete actions to calculation of the footprint Hard facts of Greenwash Brigade Exploits a naturally occuring product reduce CO2-emissions Company´s vision and reality do not fit Question 5 Apply (a) Porter´s 5 Forces Analysis and (b) a SWOT Analysis on FIJI Water. Describe the company´s competitive situation. Based on the results, what strategic moves would you suggest? Porter´s 5 Forces Supplier power: relatively low because easily replaceable Buyer power: middle to high because water is an everyday consumption good Potential entrants: high threat of other bottled water producers Potential substitutes: high variety of potential substitutes (other bottled water, tap water) Industry rivalry: very tense rivalry among companies Competitive Situation Other premium bottled waters Low cost waters Due to environmental movement: tap water Tense market environment due to numerous competitors as well as substitution goods SWOT Analysis Strengths: - Image - Broad distribution Weaknesses: - Relatively expensive - Environmental issue Opportunities: - Niche marketing - Increasing Market Threats: - Ongoing environmental movement - Shrinking market Strategic Moves Further observation of the market and therefore the amount of bottled water consumption Further research and reduction of CO2 emissions to achieve the goal of being carbon negative and building up a competitive advantage and extension to other markets Continue to educate the consumer about the differences between FIJI Water and other bottled waters and tap water Question 6 In your opinion, are the concerns of the government of Fiji about the “negative” contribution of the FIJI Water to the local economy justified? Does the company do enough to improve its relations with the government and the local community? What else should it do to improve those relations? Negative contribution of FIJI Water to the local economy? Pros Cons FIJI Water employs Heavy fading of local infrastructure mostly uneducated locals and trains them FIJI Water paid no on the job taxes till 2008 Fiji´s government FIJI Water exploits a profits from exports scarce resource and taxes (water is the second most important export product) FIJI Water brought lots of benefits to the local economy Does the company do enough to improve its relations with the government and the local community? Relations with the local community FIJI Water has a strong CSR program Uses local providers for services and supply Supports children education Fund to support projects in the village Alliance with local companies by outsourcing departments Donates money to local aid FIJI Water takes strong efforts to be a good corporate citizen Does the company do enough to improve its relations with the government and the local community? Relations with the local government Water companies try to outplay the government by relations with the media Aggressive lobbying against government Blackmailed the government with production stop Alliance with local newspapers to boycott the government Insufficient agreements between government and FIJI Water Need for productive dialogue What else should FIJI Water do to improve the relations with the government and society? Find an adequate tax system Restructure the production process to make it more sustainable Launch a forum where representatives of government, society and water industry can exchange ideas Help to stabilize the government Question 7 Taking a look at FIJI Water’s current situation and customers as well as trends in consumer needs & behavior, what are the main future challenges regarding marketing the product? What are your recommendations to respond to them? Main future challenges regarding the marketing of the product Proof that FIJI Water does not do greenwashing Achieve the „Carbon Negative“ goal, More detailed sustainability report Improve the image of bottled water Recommendations to respond to these challenges Restructure production and distribution processes to save energy and ressources Usage of renewable energies Create a more transparent insight into the company´s sustainability efforts Concentrate on metropolitain areas and regions with poor tap water quality (Establish a border between FIJI Water and other waters) Sources Case FIJI Water http://www.fijiwater.com http://inhabitat.com/is-it-green-fiji-water/ http://www.odysseytransform.com/2012/12/21/get-brilliant-at-the-4ps/ http://www.cascademuskyassociation.com/Logo__Fiji_Water.jpg http://fenixenergy.com/wp-content/uploads/2011/08/iStock_carbon- footprint.jpg http://blog.printecosoftware.com/wp-content/uploads/2013/08/greenwashpaint-150.jpg http://jsrcharteredaccountants.com/wpcontent/uploads/2011/07/ScrabbleBusinessStrategy.jpg http://www.goodmorningcreativity.com/wp-content/uploads/2012/01/Createyour-future1.jpg http://www.charterworld.com/news/wpcontent/uploads/2011/01/Fiji_Islands.jpg http://en.wikipedia.org/wiki/Socially_responsible_marketing Thank you for your attention!! ...
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