Fiji Water faces pressure from various stakeholders regarding its environmental and social impact. The document analyzes Fiji Water's stakeholders, mapping them based on their interest in and power over the company's strategy. Key stakeholders exerting pressure include environmental groups, media, governments, and industry associations. In response, Fiji Water has emphasized its "carbon negative" campaign, but critics argue it engages in "greenwashing". Moving forward, the document recommends Fiji Water improve transparency, focus on sustainability efforts, and strengthen relationships with the Fijian government and local communities.
1. MASTER IN BUSINESS STRATEGY
COURSE 2010-2011
Fiji Water and Corporate Social
Responsibility:
Green makeover or âGreenwashingâ?
MODELS FOR STRATEGIC ANALYSIS
Case Study
David Soriano Mc Guinness
2. Introduction
Fiji Water is a natural artesian water bottled at the source in Viti Levu (Fiji islands)
founded by David Gilmour in 1993. It is sourced from this artesian region of the Fiji Island,
packaged, shipped and sold to distributers across the world in various sizes. In 1997 it was
introduced to the US in the California and Florida markets. Today, its headquarters are located
in Los Angeles.
With more than 500 employees in 11 countries, Fiji Water became the nation of
Fiji's leading exporter in 2008, and its operations are vital to Fiji's economic development.
More than 300 Fijians are employed at the plant in Yaqara, holding some of the highest-
paying manufacturing jobs in the country.
Fiji Water is committed to quality and excellence in its product, people, profitability
and strategic partners. The company is also dedicated to communicating the passion and
unique properties of its brand to consumers worldwide. [3] [4] [5]
The aim of this report is analyzing the stakeholder mapping of Fiji Water, assessing and
mapping the level of interest and power of each one in order to understand better the main
stakeholders that could affect Fijiâs strategy.
This stakeholder analysis will help to the identification of the Stakeholders' interests,
identify who are the Key people to be informed about the project, which are the potential risks
and who are negative stakeholders as well as their adverse effects on the project.
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4. o Island chill, dispute between the two companies in U.S.A and Australia
because of similarities in bottle shape and label design. Island chill is a very
important stakeholder, as an example, Fiji water use Island chill as a lever of
success in different markets like Australia, where Island chill entered it before
Fiji water. Moreover, Island chill has very high interest but low power to
influence on Fiji Waterâs Strategy, even they have several disputes about the
bottle shape and label design.
Consumers: consumer preferences have been very important to explain why had
changed the trend from traditional beverages to âNew ageâ products; Consumers now
are fitness oriented and very health conscious. Consumers have low power, but they
are interested in Fijiâs strategy,
o VIP customers: Even within general consumers we can differentiate another
type of consumers such as Hollywood celebrities and popular singers; I would
say that they have more influence over Fijiâs Strategy than normal customers.
Suppliers: Such as âGolden manufacturerâ which is the company who made the
cartons for Fiji, their power is very low because they depends on Fiji water production
and his level of interest is middle, the more production from Fiji, the more benefits to
the suppliers.
Distributors: Enable the brand to be well placed, the product was sold by numerous
distributors from wholesalers to drugstores in contradiction of the productâs luxury, in
2000, exclusive distributorship agreement with Cadbury Schweppes was crucial in the
U.S market. For this reason, distributors have a high power and his level of interest is
high as well, so we can classify them as key players to Fijiâs success.
Subsidiaries: The different subsidiaries that Fiji water has in different countries
allowed Fiji to sign exclusive distribution agreements. Fiji must keep their different
subsidiaries informed and involved in their strategy.
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5. 2. External Stakeholders,
Environmentalist and conservation groups: They took up the war against bottled
water and formed by political leaders and government officials.
These kinds of groups have high interest and also have influence over Fiji strategy, so
we can identify this group as a key player due to Fijiâs strategy it is fully oriented to be
environmentally friendly, therefore Fiji must keep committed with its project as a
partners.
Some of these groups against Fiji Water are,
o World wide fund for nature: Publishing a research study, which found that
bottled water is environmentally unfriendly and a waste of money.
o Corporate accountability international, with his campaign called âThink outside
the bottleâ, promoting tap water.
o Greenwash brigade: Examining Eco- friendly claims by companies.
o Conservation groups
Media: From Newspapers to TV channels and so forth were against the company. They
are very important players , because they have high interest and maybe not direct
power but it was confirmed that they have strong influence in all the customers (e.g.
Media caused the backlash in the U.K market)
o Advertisements in favor of bottled water as a healthy alternative to soft
drinks.
o BBC was also against bottle water.
o Several news articles, claimed that they were not convinced that every drop is
green.
o Study of the cost of bringing a litre of Fiji water to America expose Fiji Water.
o A research study called âThe true cost of waterâ showed the complexities
about transfer pricing.
Governments: There is doubtless that the governments are key players in Fijiâs
strategy, depends on the government Fijiâs success. Fijiâs government has a strong
power on the Fijiâs strategy because they have the control of its strategic resources
and they are very interested people as well. we can differentiate an unequal behavior
among them,
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6. o UK government wanted to turn to tap water instead of bottled water on all
mineral water exports, because they claimed that tap water was among the
highest in the world.
o U.S conference of mayors, which represented some 1.100 American cities,
they are promoting the consumption of municipal tap water.
o Fiji government: on July 2008, imposed 20 cents per litre export duty to
stimulate conservation of their natural resources. After that, on 25 July 2008,
they drop the new tax but In November 2008, Fiji government re-introduced
the water tax in a different form (water resource tax) a progressive tax
depending the amount of water extracted.
o FIRCA (Fiji islands revenue & customs authority) decided to take action against
Fiji, they claimed that Fiji was selling the water shipments produced in Fiji at a
very low price to the company headquarters in Los Angeles.
o Chicago Mayor Imposed a five cents bottle tax on plastic bottles to
compensate for the financial burden bottled water.
Industry Associations: Consisted of ten bottled water companies, which mounted a
campaign against the new tax imposed by Fijiâs government. This new industry
association has a very high power and also is interested In Fijiâs strategy.
Other influential groups: Moreover, there are other influential groups, not so large to
affect Fijiâs strategy individually but they are also important such as,
o Key decision makers, trade unions and local chiefs
o Village leaders: there are five neighboring on the island. Most of its workforce
is from these villages.
o Members of the military council, who were against the FIRCA.
Once we have identified all the stakeholders who are in contact with Fiji, we can display
them graphically in the tables above according to their impact on the action and the impact
the action will have on them. While map A represents the most likely situation, Map B
represents the companyâs most preferred situation.
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7. Figure 1: Fiji Waterâs Stakeholder Mapping.
Source: Self-made
We are showing advocates and supporters in green, critics in red, and others who are
neutral in orange, through this way we can differentiate graphically all the stakeholders
involved in Fiji Water Strategy.
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8. Referring to Map A and as a conclusion, we can observe how the likely situation it is
not so beneficial from now on, where several powerful stakeholders are located as a key
players and also are against Fijiâs Strategy. There is a huge danger keeping these stakeholders
in the same position; the main priority is to change their orientation or at least get a neutral or
even positive orientation toward Fiji Water.
In the case of Map B, we have presented as the preferred situation, so, comparing
both maps, and taking a look the mismatches between them, we can see the main concerns,
Fiji government, who is considered the main stakeholder and who is capable to affect the
whole Fijiâs strategy Is situated against Fiji but in a desirable situation this stakeholder is
located as a partner, collaborating with Fiji. Others stakeholder against Fij such as Chicago and
London Mayors are in the same situation however, the preferred location for them is a players
who must be informed.
Overall, the desirable situation is where Fiji Water counts on the support of the main
stakeholders or at least where their opponents are in neutral situation.
A brief summary of all the stakeholders could be found in figure 2.
Figure 2. Stakeholder summary.
Stakeholder Level of power Level of interest
Internal Stakeholders
Employees LOW HIGH
Shareholders MEDIUM HIGH
Competitors LOW HIGH
Costumers LOW LOW
Suppliers LOW LOW
Subsidiaries MEDIUM-HIGH LOW
External Stakeholders
Environmentalist groups MEDIUM- HIGH HIGH
Media MEDIUM MEDIUM-HIGH
Governments HIGH HIGH
Industry Associations HIGH HIGH
Other influential groups LOW MEDIUM
Source: Self-made
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9. 2. How can these stakeholders affect to the interests of Fiji Water?
Depends on the type of stakeholder that we have identified in the former question, we can
differentiate or grade them on the basis of the level of impact that they have with Fiji Water.
As we can see along all the case, there is doubtless that the main stakeholder would be the
different governments, specially the Fiji government at first and therefore all these
governments which they are against Fiji Water strategy.
For instance, Fiji government imposed to Fiji water a water tax therefore this action
changed the whole Fiji waterâs strategy. The power of the government to affect Fiji was
enormous.
We can sum up the different ways that the stakeholders have to affect the interests of
Fiji Water,
o Governments may constrain or restrict Fiji Waterâs actions through water taxes or
export barriers.
o Media is a very powerful force, they could influence customers to not buy Fiji water
due to their high carbon footprint or on the contrary positively influence on
customers.
o Shareholders could increase or decrease their investments in terms of his willingness
to believe in Fijiâs strategy.
o Environmentalists groups can keep more pressure on Fiji
o Unless they do not come to an agreement, FIRCA could halt the Fijiâs exports.
o Government mayors could influence customer to tap water consumption in favor of
bottled water.
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10. 3. What is your assessment of the response of Fiji Water to the stakeholderâs pressure?
To face the stakeholderâs pressure Fiji water had implemented several actions to cope
with these attacks against them.
The most important action that Fiji water had taken in response all of this was his
famous campaign âCarbon negativeâ which itâs means their commitment to the environment
reducing its carbon emissions across every stage in the product lifecycle.
The result of this marketing campaign it was not the desirable, several
environmentalist and conservationist groups started to claim against this Fiji water promotion
because they consider that it was not reliable, there was a clear mismatch between the action
and the stakeholderâs expectations, consequently to Fiji Water was an unwanted result.
There is another important response that Fiji water carried on in the past, when Fiji
government imposed to the company a water tax, the firm tried to reduce the new tax impact
trough reducing the transfer price between its subsidiaries in order to reduce the amount of
money to pay. It is beyond all doubt that this response was just a measure of pressure.
Nevertheless it had strong negative impact over Fiji Water, transmitting a very adverse image
outward.
Thus, any of the responses that Fiji Water had taken in the recent years had not the
expected result.
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11. 4. What will be the main stakeholders that Fiji Water will need to consider in the next
future? What would you recommend Fiji Water?
Firstly, it is clear that the Fiji government will be the main stakeholder for years to come,
considering Fiji government as the key on Fiji Water strategy, is doubtless that Fiji had
contributed to the economic and social growth on the island, hiring inhabitants from Fiji to
their factories, because of this reason, I would recommend Fiji water to get better relations
with the government, trying to balance company and government interests such as
cooperation agreements to hire or expand touristically the name of Fiji, for instance, putting
labels illustrating different parts of the island in exchange of less taxes and a better treatment.
It is very clear that the lifestyle had changed in the recent years and it will keep changing
to more health conscious and fitness oriented in the coming years, for this reason, customers
will be the key to promote this change and absolutely match with Fijiâs strategy.
Another aspect that Fiji must work on it, it is the fact that consumers do not believe in
Fiji green, in spite of all the marketing efforts made by Fiji water in recent years, people keep
thinking if is it real or just a Greenwashing1 campaign. Fiji water needs to reduce the gap
between his current CSR and the stakeholderâs expectations.
In order to face new challenges in coming years, there are some recommendations to
Fiji water:
o Commitment with recycling in order to keep committed with the environment
preservation.
o More transparency with all stakeholders is needed in order to achieve reliability
among them.
o It is essential get better relations with Fiji government through investments in local
economy, contributing to the local communities and Fijiâs economic development.
o Fiji had put in practice several programs related with protect the environment in
order to balance the damage that they would be causing to the environment
o Take advantage of the new lifestyles and the exponential growth trend in bottled
water to promote bottled water consumptions instead of carbonated soft drinks
among customers.
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A superficial or insincere display of concern for the environment that is shown by an organization.
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12. o Try to reverse the negative relations with Fiji Government to cordial and positive
as at the beginning, otherwise, they would be forced to abandon his production on
the island and transfer it to other countries.
o Better industry agreements in order to get more bargaining power just in case
another âWater bottled crisisâ.
o Negotiate a new balanced tax with Fiji government, where both sides be profited
of it.
o Keep taking care of its Fiji inhabitantâs workforce, because they are its main human
capital.
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13. References and bibliography
[1] Scholes, K. (1998). Stakeholder mapping: A practical tool for managers.
[2] Ambrosini, V. et al. (1998): Exploring Techniques of Analysis and Evaluation in Strategic
Management, Prentice Hall.
[3] Reference for business 2010, âFiji water descriptionâ. Available at:
http://www.referenceforbusiness.com/history/En-Ge/Fiji-Water-LLC.html [Accessed on 23
of December 2010]
[4] Roll International available at: www.roll.com/about-us.php). [Accessed 28 of
December 2010]
[5] Case resolution: Fiji Water and Corporate Social Responsibility: green makeover or
âGreenwashingâ? Available at: http://www.fijiwater.com/
[6] Stakeholder mapping template, Available at:
http://www.csrvaderegiotoolkit.net/index2.php/5/104 [Accessed 28 of December 2010]
[7] Alternative channel 2010, âFiji Water a green role model for bottled water companiesâ
Available at:
http://www.alternativechannel.tv/blog/en/comments/fiji_water_green_role_model_bottl
ed_water_companies/ [Accessed 2 of January 2011]
[8] Janet Larsen, âBottled water Boycotts, âEarth Policy Instituteâ 2007 Available at:
http://www.earth-policy.org/index.php?/plan_b_updates/2007/update68 [Accessed 4 of
January 2011]
[9] Cover logo: Available at: http://www.fijiwater.com/company/newsroom/
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