Thank You Company: Expansion into New Zealand Market

Thank You Company: Expansion into New Zealand Market

The ministry of environment of New Zealand (Figure 2) estimated that drinking water makes up 9 percent of water consumption in New Zealand. This is the second most consumption after irrigation. More than eight million tons of plastic bottles sit at the bottom of the Pacific Ocean each year. This kills the sea’s ecosystem, including turtles, whales, birds, and fish that eat the plastics as food or get entangled and die in masses of water bottles.  MacLennan (1) points out that in 2017, 73 companies had consent to sell 23 billion liters of water in New Zealand. Further, by 2019, 88 permits to sell bottled water from the previous years were eight.

Market Potential of Physical Water Vending Machines

The outstanding problem is that the concept of bottling water ignores major rights for freshwater conservation. The pollution involved in bottling water is tremendous. MacLennan (2) reports an estimate of Otakiri Springwater producing 3.7 million plastic bottles every day, which amounts to 1.33 billion bottles every year. The amount is alarming, considering it is an estimate of one company. A comparison of 88 certified suppliers is unimaginable. Moreover, the expense involved in buying bottled water is too high for everyone in New Zealand to afford. Gunasekara & Nick (1) interestingly noted that some bottled water is higher than the price of alcohol. In contrast, the price of water should be easily affordable to every member of society. Conservation of the environment should be one of the major strategies that the government focuses on. It is paramount to consider a cheaper way of accessing pure drinking water for the growing population in New Zealand. At the same time, a means that takes care of the environment and the major ecosystems in the environment.

Company Description

Thank You, Company is a company that focuses on providing eco-friendly products in the market. We are a non-profit organization that sells over 55 products, including water, in Australia’s various outlets. The company relies on a retail business to sell our products to the public domain. We intend to engage a growing number of customers and investors who are environment-conscious in our business ventures.

Mission

Thank You Company aims to provide cheap, accessible pure water for the growing population in New Zealand. We eliminate plastic bottled water by providing water vending machines and boxed water from which people can drink water.

Market Analysis

Deloitte (17) indicates that the average supply of water to various stations, including supermarkets. Deloitte’s detailed report indicates that Thank You Company faces competition from established companies like Frucor beverages ltd, which owns 19% of shares consent in the market. Coca Cola owns 16% of the market share. Bottled water sold in the market is highly differentiated, and its retail prices depend on its branding. The price of water ranges from $ 5.40 to the lowest price of non-carbonated mineral water at $ 0.80 (Deloitte, 19).

However, 74% of the people in New Zealand think that bottled water is too high for a lot of people to afford (New Zealand water consumption report). A huge number of the urban population cannot afford bottled water, especially with the prevailing conditions in urban centers. It is vital to avail pure drinking water to the urban population due to the high rise in pollution from industrial waste that is poured out into rivers.

Suitable Business Model

Thank You Company aims to avail this information to the public, creating awareness that it is vital to protect the environment from non-biodegradable materials. The effects we pose to the environment are only a cycle that affects the future generations to come. In the long run, the polluted water sources stream to the inland rivers, and the underground soil from which most of the water sources from New Zealand come from. The effect is water is toxic chemicals that get incorporated in water. Unfortunately, since many people from New Zealand cannot afford plastic bottles, they drink directly from underground sources that affect the immune system of the body, leading to complications.

The firms rely on the retail business to sell our products to the public domain. We have carried enough research and are interested in exploring the New Zealand market with 100 percent recyclable materials to sell water that is not bottled at lower prices. We intend to welcome investors into our business to dare venture into the new market with a new concept. Further, we intend to establish physical vending machines at particular mapped locations that would be efficient and accessible to customers. Our first aim is the urban population in Southland and Auckland, the largest cities with water consumption.

Investors will work one-one with our team in New Zealand to navigate the new markets. Also, we invite investors to take a deep- analysis of the impact the company will have in New Zealand in a few years to come. The entire process of the venture is a step-by-step analysis that is easily accessible to our investors. The vending machines provide easy, flexible access to communities with lower prices than the average bottled water. Besides, we intend to introduce boxed water, which is like tetra packs or paper coconut water bottles. Boxed water is a new product, which is unique in the market. It does not pollute the environment. It also has a limited lifespan, which allows the consumer to drink water from the box, and dispose of it in allocated bins in the city that we plan to install. The allocated bins enable us to collect the waste boxes for a recycling process that is certified and practiced by companies such as the Tetra pack.

Financial Considerations, Including Investment Requirements, Potential Risks, and Returns, and Opportunities for Crowd Funding.

The financial considerations that the company should put into consideration are the source of its income and expenditure. The water company may face an economic risk. The economy is constantly changing as the market also fluctuates. When the water company wants to set up its business, it has to put in place economic risks and look at how to avoid the risk of incurring fewer losses. Negative changes to the economy may lead to a decrease in sales of the water. The organization should be keen to watch the changes and trends to identify and plan for the economic downtown for water sales in New Zealand. The organization should save as much as it can from counteracting the economic risks. It can save as much capital to ensure a steady flow of money in the organization when there is a downfall. Besides, the organization can lean to operate with the low budget overhead through all the economic cycles that it may face.

Also, the organization may face compliance risk to water organization to the New Zealand government. These are the abundance of laws and regulations that a company should comply with when starting its business. The organization should be ready to comply with the government rules and regulations that control the water supply in the region. The business organization may face a financial risk and crisis its operation. The organization may borrow a lot of money for its startup and management. It may also extend its credit services to its customers, which may result in a lot of debt loads. Since there are not steady rates of interest due to fluctuations, the organization may incur a lot of money when paying its debt since the interest may increase due to fluctuations. The organization should adjust its business plan to avoid entry into unnecessary debts that may risk the organization’s thriving towards realizing a lot of profits rather than making losses. The organization should diversify its financial sources than relying on one or two sources of funds. Diversification of the source of funds enables the company to have an alternative source of money if one source pulls out.

The material used to make the boxes is plasticized cardstock, a small change to traditional bottled water, which is made from non-biodegradable plastics. These boxes are constructed of approximately 75% of paper, and 25% is plastic. The downside of using paper is the deforestation of forests for the required raw materials. Therefore, a problem may arise where these forests are not managed sustainably. To correct such an error, we are required to incorporate afforestation practice – the rule of falling on the tree and planting three; to prevent environmental defects such as global warming and disruption of the hydrological cycle.

To further promote this venture, our company should market the brand differently by educating the masses on the depreciation of cost and the effect of the product on the environment.  Since the internet creates such a space, the company can put up posters teaching the public how ‘we’ can salvage the environment.  Other brands advertise themselves by providing their unique qualities, but ours, we will push the product forward by communicating its need for a better ecosystem.

Human Resources and Operations

There are essential human resource issues worth considering as Thank You Company Venture into its new market. Some of these include workplace culture, training, competency, employee turnover, workers comp injuries, medical costs, employee benefits, and lost productivity. The most important aspect to consider first is employee turnover. This is because a start-up startup firm’s success relies on the quality and quantity of skilled, semiskilled and unskilled labor available.

Venturing into the New Zealand Market requires that the Thank You Company considers the existing human resource market. The job market in New Zealand is a mixture of both skilled, semiskilled and unskilled laborers. According to the current statistics, it is noted that the economy in the new market grows at a slower rate with job openings galloping. This implies that the firm will have to adapt to the readily available personnel to expand their business. Opening a water vending business does not require many employees; nevertheless, it requires people with appropriate skills to help put the business in place. The plan to get access to quality skilled labor at a cheaper cost would require a proper recruitment process that takes time. As estimated, the firms will require human resource personnel as highlighted below.

From the table above, it can be seen that the firm plans to have a total of 37 personnel to start four water vending points. According to market research, it is revealed that skilled employees in the water industry earn a minimum wage of $234,000 per month, semiskilled $23 per month,000 while unskilled earns a daily wage of $100. This shows that the firm has to prepare with approximately $500,000 per recruiting new employees. Since Thank You Company is a legal firm that adheres to the international and domestic regulations that govern business operations, it will have to maintain the minimum wage or adjust it upwards but not bellow. Further, the process of recruiting new employees in New Zealand requires that certain regulations are adhered to in their totality. According to NZs Leading Employment Services, the hiring process has to follow seven recruitment steps to ensure that the entire process is fair. Employment Law Advice forwards that a foreign company has to employ a given number of New Zealand nationals. Thus Thank You Company has to ensure it has the required number of employees within the country. Important to note is that the National Labor Law Profile, which protects employees’ rights, is derived from statutes enacted by the parliament. It was enacted to ensure that both foreign and local firms address the gap in employee triangular employment situation.

Ethical Consideration, Legal Regulatory Risks, and Challenges

One of the challenges facing business owners like Thank You Company is not engaging legal experts to handle possible new ventures. Venturing into a new venture would need planning for marketing and growing the business and eliminating the legal that may come up in the new ventures? Laws run all businesses, and every entrepreneur must know all about the laws and regulations in the place of establishment.

Businesses are always concentrated on establishing themselves in the market, but risks suffering include the new business’s structure. For Thank You, company New Zealand is a new venture, and its main objective is to outdo other bottling companies by providing water venders. In this case, the company has to know the tax responsibility and its personal liability. This would help save tax and assets in a time of crisis. The absence of the founder agreement is also another risk factor. When it wants to venture into New Zealand, there must be some partners in that country; hence the terms of operation should be clearly stated to avoid future conflicts. The signed document should include how a person’s equity will be dissolved when it wants to exit the market.

Law and regulations differ in every country; therefore, every business should have a proper license to operate in a particular country. Not complying with the regulations can result in legal fights and tassels in with authority. This can result in hefty monetary penalties, which is not good for a new venture company. Ignoring tax laws is one of the significant risks faces by many new venture companies. And as it is always said, ignorance has got no defense; the government would not spare them if they get into such a scenario because there are guidelines to guide them on operations. For instance, for Thank You company to venture into New Zealand, it has to hire a legal expert to learn the applicable taxes and laws and get assistance on compliance matter

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Any company’s ethics and ethos are regulated by the culture and beliefs of people in the country where they won’t put up a new venture. Therefore, if Thank You has to establish and outdo the existing companies in New Zealand, they will have to learn the people’s values in that land to produce the product they desire. They must also have proper documentation of how they would manage their assets, liability, and sale of shares. It may have the proper knowledge of rates of wages, salaries, electricity, water, and land to draw its budget that can meet its operational costs.

Bibliography

Deloitte, Deloitte. “Water Bottling In New Zealand.” More.Govt.Nz, 2018, https://www.mfe.govt.nz/sites/default/files/media/Fresh%20water/water-bottling-in-nz.pdf : 1-65

Gunasekara, F. Imlach, and Nick Wilson. “Very cheap drinking in New Zealand: some alcohol is more affordable than bottled water and nearly as cheap as milk.” New Zealand medical journal 123.1324 (2010): 103-107.

MacLennan, Cat. “Bottled Water Has Reached Its Tipping Point. The Time For A Moratorium Is Now”. The Spinoff, 2020, https://thespinoff.co.nz/politics/05-03-2020/the-bottled-water-issue-has-reached-its-tipping-point/.

Ministry for the environment, Ministry for the environment. “Executive Summary | Ministry For The Environment.” More.Govt.Nz, 2017, https://www.mfe.govt.nz/publications/rma-fresh-water/update-water-allocation-data-and-estimate-actual-water-use-consented-7.

Svagzdiene, R., R. Lau, and R. A. Page. “Microbiological quality of bottled water brands sold in retail outlets in New Zealand.” Water Science and Technology: Water Supply 10.5 (2010): 689-699.