Zombie Status of the Quench Company - Essay Example

? CASE STUDY ON QUENCH COMPANY Submitted Case Study on Quench Company Background Information on Quench Company Executive Summary Quench Company is the largest water technology company that supplies clean water to over 25,000 businesses in the U.S. Quench offers the best production in term of purification, filtration and sanitization technology and a deeper knowledge of local water situations (Goh 2008, 10). It has a well dedicated customer service team that manages every water cooler and ice dispenser that the company installs. The company filters tap water so it more convenient, inexpensive and environmental friendly in relation to bottled water coolers. Bottle less water is a solution to office water because they eliminate use of plastic jugs that fills the land and it also the greenest. They reduce fossil fuel-burning delivery trucks hence minimizing carbon footprints of drinking water. The company products are used in lobbies, warehouse, waiting rooms and reception areas, classrooms, schools and universities, health clubs, gyms, spas, hospitals and doctors’ offices, office areas and campuses. The company is located in King of Prussia, Pennsylvania. The case study of Quench Company advises on how to resolve the problems cause by Quench sales in the United Kingdom. The problems resulted from the public who were concerned on the green issues in terms of production and distribution. Quench is trying to find solution to the problems in order to convince the consumers that the whole process of production and distribution is environmental friendly. The paper highlights the problems that the company has faced in the past few years and the manner in which these quandaries have made sustainability of old markets and penetration of new markets by the company difficult. “Zombie” Status of the Company Zombie Company refers to a company that needs to be bailed out of debts constantly in order to operate. It also a company that is constantly paying debts that never gets finished. The term came into use in 2008 for companies that were in constant bail out by the U.S (Bodell 2012, 93). Zombie Company describes an economic situation where the government supports a company that cannot stand on its own. Zombie companies also refers to operating businesses that generate cash but are not able to pay off their debt or attract enough investment to clear debts. After paying off running costs like rent, wages and rates, they are left with funds to pay off interests and not the actual debt. The companies are trading, half-living and not able to pay their debts and hence considered half dead. The insufficient funds they are left with to run the company forces their Chief Financial Officer to look for subsistence funds elsewhere inform of loan grants in order to survive. The companies are loss making and have minimal hope for improvement in future. The banks support them with loans all through in order to survive crippling them. Problems Competition in the drinking water sector grew strong in 2012. In addition, the firm was affected by economic recessions of the period and its sales dropped significantly. The company has suffered a market blow due to its failure to respond to environmental concerns about the products it offers. These have resulted in significant drops in profitability of Quench Company and lost sales. The company has plunged into financial crises and has become unviable. The company uses publicity method to solve the issues that may improve its image and sale in United Kingdom. In 2008, the Siegel statistics showed that all brands of bottled water fell by 3.4 per cent year on year and 8.1per cent for own brand (Kenmore 2009, 32). Quench the main producer of bottled water suffered the same problem. The problems were brought about by the eco friendly awareness of people. The people who figured it were sustainable resources and ecologic logistics who were concerned with environmental issues. Quench sales are relatively low in the U.K. and this will spread to other countries leading to a negative impact on the brand leading to decrease in the global market. Quench competitors have already claimed it to be environmental unfriendly and so that will make it difficult to market it share if does respond to the environmental issues. Solutions Getting solutions that may bring the company back on its feet largely relies on how the company responds to the core problem at hand; environmental concerns of its products. Several possible solutions have been sought to help the firm deal with it problems. The first one is to change the bottled plant location. The main issue the public complained about is the distribution of the carbon footprint. Fiji water flows to a distance of 10,000 miles to the United Kingdom (Williams, Hall $ Champion2011, 82). Quench should relocate its plant to reduce carbon emission. The advantage of this is that the distribution cost will fall and the carbon footprint decrease in UK market making Britain thinks Quench is more environmental friendly than other bottled water companies. The disadvantages of this solution is that it will be time consuming as the company negotiates for spring and land and expensive to shift it somewhere else. Further, the company has an alternative of using eco-shaped bottle. The company can copy the example of Nestle Company and use environmentally friendly bottles that are 30 per cent more biologically friendly and disposable than their currently used bottles. If the company uses the eco-shaped bottle, people will consider it to be more environmental friendly. The British people will be propelled to buy bottled water of the Quench Company. The main disadvantage of this solution is that the company will suffer losses in the development and research of creating the new bottle since it will alter some of its production line to invest in the bottle. The third alternative is improving publicity of social responsibility. Quench needs to advertise with satellite coverage to highlight on what they have done to protect the environment. For example, like what Evian did to highlight how to reduce down plastic bottle for less space in recycling truck. The benefit of highlighting Quench social responsibility to the public is to make them aware and confident the company is environmental friendly and buy its bottled water. The only demerit faced is that the company has to pay for advertising. The company also needs to improve on its marketing strategy that can be accomplished through marketing. According to Hickman (2009), in accordance to Water Aid, around 884 million people in the developing countries lack clean water. Quench Company could improve its image by donating some of its profit to develop water infrastructure in this developing countries. This act will raise Quench reputation and attract more customers because people will want to help others especially those living in poverty. The drawback of this solution is that it time consuming and the losses incurred in the new marketing strategy. The fourth solution is establishment of a new recycle system for the bottles. The company can set up collection points like rubbish bins in the shopping malls and city centre in UK. People will mostly discard the empty bottles in the bins and Quench can collect them for reuse in some bleach processes. The saved cost can be donated to the developing countries to resolve the issue of tap water. The solution also reduces pollution from production to distribution for long-term development. Quench reputation improves in being both charitable and environmental friendly. The only disadvantage is the extra cost in the collection of bottles and bleaching. Evaluation Bottled water is a global problem. Consumers spend over $100 on bottled water in the belief that it more pure than what flows from our taps. Bottled water is in high demand even in areas where tap water is safe for drinking leading to unnecessary garbage. There is concern to govern tap water than bottled water. Improving sanitations and treating existing water will be a solution to providing safe and sustainable water. Lack of pure water is what has led to companies like Quench. Recommendation It his highly recommended that Quench should use the new ecological bottle to reduce use of carbon and oil since the consumers will appreciate the more environmental friendly bottles. The new recycle system should be established for long-term development in reputation and finance. Improvement in its publicity is recommended to improve its image to the public through the media. Publicity will let the public know the positive impact of the world of Quench. Reflection Upon consideration of the environmental concerns of the packaging of water by Quench Company, there is no doubt that the company is set to get back to its feet. It will be able to enjoy the economic success and accelerated growth it had experienced since its inception in 1998 to the dawn of its downfall in 2012. This might not come easily, and the company may need massive marketing efforts to convince its target market that it is once more environmentally responsive. In addition, the company will be able to regain its superior brand image. Coupled with competitive pricing and strong advertising campaigns, taking into account the solutions discussed above will get the company back to its deserved financial and competitive position. Bibliography KENEMORE, S. (2009). Z.E.O.: a zombie's guide to getting a (head) in business. New York, Skyhorse Pub. BODELL, L. (2012). Kill the company: end the status quo, start an innovation revolution. Brookline, MA, Bibliomotion. GOH, M. H. (2008). Managing your business continuity planning project. Singapore, GMH Pte Ltd. WILLIAMS, C., HALL, I., & CHAMPION, T. (2011). MGMT. Toronto, Nelson Education. Read More