The Adaptation of Water Purifier in the Hippo Water Roller at South Africa - Case Study Example

?International Business Research and Analysis Project Table of Contents Introduction 3 2.Thesis ment 4 3.Need For Water Purification 4 4.Manufacturers of Hippo Water Rollers 5 5.Research For Inexpensive Water Purification Filter 6 6.Business Plan 7 a.Economic Climate for Foreign Business 7 b.Political Climate for Foreign Business 8 c.Legal Environment 8 d.Socio-cultural Acceptance of Product 9 e.Managerial and Labor Climates 10 f.Size of the Market 10 g.Competition in the Market 12 h.Marketing and Distribution Method 12 i.Financial Viability 13 7.Conclusion and Recommendations 14 Works Cited 15 1. Introduction The Hippo Water Roller is a simple machine used for holding water effortlessly and efficiently compared to the techniques used traditionally. The container is designed in a barrel shape which holds a substantial quantity of water and can be rolled in the ground with a handle attached to the axis of the barrel creating lesser friction and allowing comparatively less effort to carry water from one place to another. This instrument was introduced in South Africa which further received the accreditation in the global context. Through the instrument or the container, people can transport five times of the water transportable through traditional means. A standard size of a barrel can hold 90 liters of water at a time. The product is often considered to be ideal for developing countries such as South Africa, Bangladesh, and Sri Lanka among others where people need to transport water from one place to another to lead their regular life owing to the scarcity of clean water to satisfy the daily requirements. According to the report published by Consultancy African Intelligence, two out of five people in Africa lack accessibility to sufficient clean drinking water. Owing to the massive population of South Africa, the percentage of the citizens in the country lacking accessibility to clean drinking water accounts to almost the population of US and Russia. This can impose significant impact on the social threat of the nation causing poor health and dehydration within the society (George Brown College, “Watershed: The World House Guide to Designing Water’s Future”). Hence, with regards to the rapidly increasing significance of the Hippo Water Roller as an ideal water transporting device, the adaptation of water purifier inside the barrels shall further increase the contribution of the project towards social health. 2. Thesis Statement The discussion henceforth tends to address the requirement of adapting a water purifier in the Hippo Water Roller device concentrating on the business environment of South Africa. In this regard the report will take into account the economic, political, legal, bureaucratic, socio-cultural and managerial or labor climates of South Africa that can influence the adaptation of water purification filter amid the communities. The other evaluative aspects would include the size of the potential market for Hippo Water Roller in South Africa, persisting competition in the region, marketing and distribution opportunities, and the financial viability of the project. 3. Need For Water Purification In the current environmental context of South Africa, it has often been observed that most of the water from taps and wells are not adequately pure for drinking purposes due to environmental and industrial pollution. The bases of drinking water in South Africa are commonly available through wells, rivers, and lakes among others which have also become polluted owing to the increasing industrialization. Pollution in the water can be caused due to the existence of different minerals and chemicals which are mostly observed to be man-made. This further tends to cause severe diseases such as waterborne diseases (e.g. diarrhea), cancer, liver damage and other chronic illness which can even result as an epidemic. Hence, inaccessibility to drinkable water can emerge as a significant threat for the national health and therefore, impose restriction to the overall development of the country (Harshfield, Jemec, Makhado and Ramarumo, “Water Purification in Rural South Africa: Ethical Analysis and Reflections on Collaborative Community Engagement Projects in Engineering”). In the current day context, it has also been observed that due to inadequate water facilities in South Africa and uneven water supply by the municipal corporation, it has become quite challenging for the local people to obtain pure drinking water. In this regard, an assessment of 46 households across the country depicts that 83% of the population was learnt to have no access to adequate safe drinking water and thus they need to get it transported from distant places which often becomes a huge concern for the locales (Harshfield, Jemec, Makhado and Ramarumo, “Water Purification in Rural South Africa: Ethical Analysis and Reflections on Collaborative Community Engagement Projects in Engineering”). This signifies that South Africa has to witness limitations to avail pure water and thereby, communities within the nation shall be highly benefitted with the adaptation of water purification filter. 4. Manufacturers of Hippo Water Rollers Contextually, in order to develop the Hippo Water Roller device with the adaptation of water purification filter, it is highly essential to develop a strategic alliance with the manufacturers of the product. The device is particularly manufactured and marketed from South Africa with the assistance of social enterprises funded partially by government spending. It is worth mentioning in this context that Imvubu Projects is currently operating as the largest and the authenticated manufacturer of Hippo Water Rollers in South Africa. The aim of manufacturing the devices has been to diminish the inadequate supply of water resources. So far, the rollers which were manufactured by Imvubu Projects were distributed to as many as 21 countries located in the African continent as well as in India, Mexico and South America. The product is also been distributed to different neighboring countries through the local manufactures (George Brown College, “Watershed: The World House Guide to Designing Water’s Future”). 5. Research For Inexpensive Water Purification Filter The roller is designed to be used in rural areas, where the geographical characteristic signifies uneven surfaces and unconstructed roads. While carrying water is the primary use of the product, it is also used for irrigation purposes. Owing to its social importance, so as to enhance the efficiency of the water transporting device with the adaptation of a water purification filter, it becomes quite essential to consider the pricing factor. Contextually, the Ceramic Drip Filter can be identified as low-cost but an effective instrument which can be used for enhancing the efficiency of Hippo Water Rollers from merely transportation to purification purposes. Ceramic Drip Filter is principally produced in various parts of the world which can be imported so as to serve the locales in South Africa. According to Ron Mathis and Texas Baptist Men’s Water Ministry, it is one of the simplest processes of filtration and can be easily used and maintained. The filter can purify upto 500 tons of water and hence, shall prove highly effective for the water transportation purposes (ZB-net.com, “A Practical, Life-Sustaining Water Filter”). 6. Business Plan Summarizing the above mentioned aspects, it can be affirmed that the product to be marketed through this business plan will an advanced Hippo Water Roller with integrated ceramic drip-filter. The vision to market the product within South Africa would be to augment the accessibility of the locales in the rural regions of the country to obtain pure drinkable water in sufficient quantity. It is in this context that various factors can be expected to influence the entire process such as economic, socio-cultural, political, and labor market scenario. a. Economic Climate for Foreign Business South Africa is often regarded as the economic powerhouse of African continent. The contribution of South Africa, in comparison to the other African nations has been quite significant. The economy is considered to be a leading industrial region within the continent which particularly emphasizes on the production of minerals. The country has ample natural resources and well developed energy sources which contribute largely to the development of the industries. The economic structure of South Africa also deciphers a sophisticated financial system supported by adequate banking facilities (Fundira, “Economic and Trade policy Overview”). Notably, these economic features shall be quite beneficial to support the above described business plan. However, the Foreign Direct Investment policies in South Africa had been declining since the past few years, fundamentally owing to the global financial crisis which might impose a certain degree of threat on the business plan (Trading Economics, “Foreign direct investment; net inflows (% of GDP) in South Africa”). b. Political Climate for Foreign Business In its recent ventures, the South African political scenario had been much active in the international context owing to its strategic alliances with various nations, especially with the US government deciphering sufficient stability. It is worth mentioning in this regard that not only on the democratic front, but also in the social as well as economic concerns, South African government has been playing a crucial role to support the developmental process within the nation as well as in its neighboring nations through international strategic alliances since the late 1990s (Ploch, South Africa: Current Issues and U.S. Relations”). Hence, it can be stated that the political environment will support the business plan involving a social welfare cause to the expected level engaging both the South African and the US government. c. Legal Environment In relation to legal restrictions, it can be observed that as the product is served to the community with the sole intention of enhancing their wellbeing by facilitating their accessibility to pure and adequate water supply, minimum legal interference can be expected. Conversely, the South African legal structure had been witnessed as quite encouraging towards social welfare operations which shall further prove to be quite beneficial in relation to the proposed business plan. It is worth mentioning in this regard that the intended ceramic drip-filter is to be manufactured in USA and shall further be imported to South Africa and assembled with the Hippo Water Roller. This might impost certain legal barriers in terms of registration and taxation policies such as the African Growth and Opportunity Act (AGOA, P.L. 106-200). However, as the economy tends to perform as the largest international market for US products, the legal barriers can be observed adequately flexible (Ploch, “South Africa: Current Issues and U.S. Relations”). d. Socio-cultural Acceptance of Product The rollers assembled with the ceramic drip-filter water purifier is intended to served primarily within the local market which can further be expanded to the international market comprising the neighboring countries. The Hippo Water Roller had been widely accepted within the South African society owing to its efficiency to mitigate the problems associated with the transportation of drinkable water. The device has been so far assisting in transporting huge amounts of water in the containers over short distances within a local premise manually requiring lesser effort. It is worth mentioning in this context that South African society had been witnessing challenges and health related threats owing to their limited access to drinkable water sources. Hence, Hippo Water Rollers, assembled with purifiers can be observed as highly essential towards ensuring social health within the socio-cultural context of South Africa. e. Managerial and Labor Climates Traditionally, the managerial practices within the South African business environment had been focused on a centralized framework with immense intervention from governmental, legal and other external bodies. However, with the continuous development of the business scenario and the impact of globalization, the managerial framework followed by most of the South African companies has developed as less centralized. Hence, the managerial framework of the business plan can be considered as partially decentralized which in turn would augment the requirement of highly skilled and educated workforce. It is worth mentioning in this regard that local manpower from South Africa would be recruited to execute the business plan. The education level of the workforce and the ethical concerns on both individual level and organizational level would be considered as highly essential in relation to the business plan so as to preserve organizational efficiency along with social integrity. f. Size of the Market The proposed product, i.e. the assembled Hippo Water Roller with ceramic drip-filter purifier will be initially targeted to the local regions of rural South Africa where pure water is observed to be available in limited quantity and with impure chemical properties. Owing to the fact that South Africa still comprises a large proportion of rural areas, the potential market size of the product can be considered as huge. Furthermore, as the social acceptance and government intervention is also observed as supportive and highly encouraging in relation to the product, it can be expected that the business shall not have to face sever obstructions when being implemented. Place: The product will be initially served in the rural areas of South Africa such as Eastern Cape, Limpopo and KwaZulu-Natal where people are observed to face various issues including water accessibility (The National Treasury, “Delivering Municipal Services In Rural Areas”). Product: The product to be served within the community will be an advanced Hippo Water Roller assembled with ceramic drip-filter water purifier. Notably, the purifier will be imported from USA owing to the quality concerns and assembled within the country. In this regard, strategic alliances will be created with Imvubu Projects and the US based supplier of the drip filters. Price: With due concern to the social welfare aimed through the proposed business plan, the price of the ready products will be maintained at a lower range which will be easily affordable by the targeted population. Hence, due concern will be rendered towards the prices of inputs, i.e. the human resources, imports of drip-filters and the Hippo Water Rollers required to be upgraded. Promotion: Depending on the nature of the target market, personal marketing and direct promotion will be selected as the most appropriate promotional channels. This might give rise to human resource costs and limit wider accessibility at a shorter time period, but simultaneously, it may also assist in developing necessity for the product amid the targeted market. g. Competition in the Market A certain degree of competition can be identified prevailing within the market of South Africa for the product, Hippo Water Roller owing to the existence of similar products, such as Aquaport. However, it is worth mentioning that as the adaptation of water filter in the portable Hippo Water Roller is yet a unique idea, the marketing plan shall have to face meager competition within South Africa. Nevertheless, from a long run perspective, the idea might be imitated by similar organizations and thus give rise to competition by a significant extent. h. Marketing and Distribution Method The distribution channel of the project would involve Imvubu Projects as the supplier of Hippo Water Rollers, the US manufacturer of ceramic drip-filters, the assembling plant and the local distributers operating in the targeted rural areas. It is in this context that the products will be distributed to the ultimate target population after being assembled in the national plant which will again be located nearby the market areas to facilitate easy and time saving transportation of the ready products. The local distributers with wider accessibility to the target areas will be considered to reach the ultimate customers. i. Financial Viability [Note: 1 ZAR = 0.1140 USD by PPP (RMB FICC Research, “Picture The Rand”)] It can be apparently observed from the above presented chart that the plan would require an investment of USD 30,000 twice in the initial year, i.e. a total of USD 60,000 which can be availed from governmental sources and borrowings from private sectors. According to the estimated expenditures and the sales revenue likely to be generated from the project, it can be further expected that the project will yield annual cash inflow of USD 61,500 marking a payback period of one year. Hence, a high profitability margin can be expected to be gained from the plan. 7. Conclusion and Recommendations With reference to the above described business plan, it can be apparently stated that as the proposal also comprises a certain degree of social concern, profit must not be considered as the sole reason for the idea. Hence, it would aim at social welfare to be served to the rural regions of South Africa creating value amid the socio-cultural and the economic context of the targeted market. However, in its long-run the business can be extended to the semi-urban cities of South Africa and the neighboring countries as well with the motive to earn higher profitability and sustainability. In this regard, the business plan shall be eligible for adequate governmental and social assistance not only in terms of legal flexibility, but also in terms of tax exemptions. Furthermore, from a long-run perspective, innovation can be considered as quite significant to preserve the sustainability of the business owing to the high probability of competition in the targeted market. Conclusively, it can be stated that the business should be concentrated on building long-run relationship within its supply chain which would reward cost effectiveness and greater financial viability of the project, along with augmenting the competency of the product. Works Cited Fundira, Taku. Economic and Trade policy Overview. South Africa-Africa Trade At A Glance, 2011. Web. 31st Oct. 2012. George Brown College, Watershed: The World House Guide to Designing Water’s Future. 2012 Web. 31st Oct. 2012. Harshfield, Eric., Jemec, Ana., Makhado, Ofhani., and Ramarumo, Elias. “Water Purification in Rural South Africa: Ethical Analysis and Reflections on Collaborative CommunityEngagement Projects in Engineering”, International Journal for Service Learning in Engineering 4.1(2009): 1-14. Print. Hatch, Grant., Becker, Pieter., and Zyl, Michelle Van. The dynamic African Consumer Market: Exploring Growth Opportunities in Sub- Saharan Africa. Accenture, 2011. Web. 31st Oct. 2012. Ploch, Lauren. South Africa: Current Issues and U.S. Relations. CRS Report for Congress, 2011. Web. 31st Oct. 2012. RMB FICC Research, Picture The Rand, 2011. Web. 31st Oct. 2012. The National Treasury, Delivering Municipal Services In Rural Areas, 2011. Web. 31st Oct. 2012. Trading Economics, Foreign Direct Investment; Net Inflows (% of GDP) in South Africa, 2012. Web. 31st Oct. 2012. ZB-net.com, A Practical, Life-Sustaining Water Filter. 2009. Web. 31st Oct. 2012. Read More