Influences that affect the business environment of Hydrolife Bottlers Company in Uzbekistan
Estimation of influence of economic growth, level of incomes of the population, the interest rate, inflation and exchange rate on company Hydrolife activity. Hydrolife Company the company which makes potable water and water with useful minerals.
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Hydrolife Bottlers Company is one of the leading producers of drinking water in Uzbekistan. The majority of Hydrolife Bottlers production is water in bottles. Hydrolife Bottlers Company entered the market of production of drinking water in Uzbekistan in 2003. It located in But-14, Erkin town, Zangiyotin district, Uzbekistan. HYDROLIFE BOTTLERS Company has passed whole cycle of the international certified audit, and has got international certificates ISO 9001:2008 «Quality Control System».(hydrolife.uz/about)
According to research of managers of supermarkets in Tashkent the leaders of drinking water market are Nestle, BonAqua and Hydrolife. The part of these companies in drinking water market is nearly 40-45% now. There are also more than 72 brands of drinking water in Uzbekistan, but only 40 of them have production in Uzbekistan and they have nearly 60% of drinking water market.(Jalilov, T.,2010)
Melt water is extracted from glacier of Tjan-Shanja. Water Hydrolife passes through the natural mountain filter thanks to what becomes low-mineralized. The water is produced at the altitude of 1500 meters above sea level; therefore it has no subterranean water impurities.
There are 4 types of drinking water production:
· Aerated water Hydrolife(plastic bottles in 3 variants of value- 0,5;1,0 and 1,5)
· Non- Aerated water Hydrolife(plastic bottles in 2 variants of value- 0,5 and 1,5)
· Non- Aerated water Hydrolife, Eco series(plastic bottles in 3 variants of value- 1,0;1,5 and 5,0)
· Mineral water GEOMINERAL(glass bottles in 3 variants of value-0,33;0,5 and 0,75)
Entry 2 Effect of Economic Environment
In this entry I'm going to analyze how such factors as economic growth, income level of population, interest rate, inflation, and exchange rate have an influence on the demand of Hydrolife Company.
Economic growth of the country leads to the growth of income level of population and this means that level of the lifestyle of population and quantity of needs increase too. Nowadays the majority of population has opportunity to use clear drinking water in household use and such product as mineral water become the integral part of our life. Accordingly demand for the production of Hydrolife Company rise in the same time with economic growth of the country and it leads to increasing of income of company.
As to inflation, it is negative factor of economic progress and unfortunately it situated in many countries and Uzbekistan isn't an exception. Every company considerate the coefficient of inflation in the business plans. But from my point of view inflation doesn't decrease economic characteristics of Hydrolife Company. By inflation it is the rise of prices of raw material, electricity and salary that lead to increasing of product's price. In the same time according to inflation, government increase the salary of citizens and spending power for goods of first priority (drinking water is in this category) of population isn't decrease. This factor doesn't have big influence on the demand of Hydrolife Company.
Exchange rate also doesn't affect the demand of Hydrolife Company very much. Companies that contact import and export of production must take into account this factor for realizing their work. But Hydrolife Company just imported technical equipment from Germany and Italy. And in their production company use local materials and workers and that's why the exchange rate doesn't have inflation on the income of the company.
Interest rate hasn't a big influent on demand of Hydrolife Company. Because of increasing of interest rate in banks customers need to pay more to banks and have less money for buying something. But Hydrolife Company produces the products of the first necessity and that's why interest rate has big impact on company's production.
Entry-3 Effect of Socio-cultural Environment
In each society there are many social and cultural threats, which connected with specific cultural heritage. They influence on the demand of the different production and Uzbekistan isn't exception.
One of the main social threats, which presents at all countries of the world is gossips. On the territory of Uzbekistan it is very important to keep relationship between relatives and friends strong. That's why the negative gossips spread very fast among relatives and friends, colleges and acquaintances. If somebody of familiar people would say something bad about production of Hydrolife Company, it is possible that the informed person would change its choice and buy the production of competitors. Unfortunately sometimes competitors make negative gossips about other companies by themselves.
Another big social threat to producer's companies is Mass Media. The opinion of independent experts of TV programs and article of journal can influence on peoples' choice.
The cultural threat to producers of drinking water in Uzbekistan is using of tap water in the houses. Tap water in our country is from Charvak reservoir storage and it is clean and enough tasty. That's why many people in Uzbekistan get accustomed to drink tap water.
Entry-4 Effect of Industry Environment
Hydrolife Company belongs to the food industry, non-alcohol drinking water. There are more than 70 names of of drinking water producer on the market in Uzbekistan. But the main competitors of Hydrolife Company are Nestle Waters Company and Coca-Cola Company. They have 40-45% of market together. (Jalilov, T., 2010)
I think that the main advantage of Hydrolife Company is a big variety of the value of the bottles (0,5l;1,0l;1,5l;5,0l). All these variants of value of bottles are for different cases. For example: people, who are working or studying whole day, need small bottles of water (0,5l) to feel more comfortable. But in another hand it is more comfortable to buy big bottles of water for home. That's why the best variant for customer in the shop is 5,0l bottle of water of Hydrolife. There is not so big variety of Nestle and BonAqua bottles of water (0,5l; 1l and 1,5l)
Hydrolife Company is one of these three which produce not just clean drinking water but water with useful minerals.
Also Nestle Water and Coca-Cola BonAqua are famous brands in the world. It is unanswerable advantage compare with Hydrolife Company.
Entry-5 Effect of Political and Legal Environment
business environment hydrolife bottler company
The government of Uzbekistan enacts separate legislation of water and it's using. All companies, organizations and farms which use water resources must observe these laws. Hydrolife Company follows all ecological rules and laws when it use and realize water resources and company doesn't break water legislation.
The availability of labor market makes company possible to choose the best specialists and workers in the different sphere of application. Permanent modernization of production needs permanent grows of qualification of workers and depends on labor market of the country.
As every company which produces the products of high demand Hydrolife Company closely couples with customers. Company depends on customer's choices and wishes. That's why company always tries to find new forms, tastes of product for maintenance of high level of demand of Hydrolife Company's production.
Competition is the best stimulus of the grows of the company's quality. If there is no strong competition on the market, company couldn't develop and make its best. Hydrolife Company has 2 strong competitors on the market and always tries to be better.
Entry-6 Effect of Ethical Environment
The company can negatively affect stakeholders by unethical business decisions.
Hydrolife Bottlers CO.Lmt has few shareholders, who invest their money into company but do not lead business activity. That's why any unethical business decisions of the managers and other responsible persons can lead to decreasing of income of company and loosing dividends by shareholders. Serious unethical business decisions can lead to bankrupt and closing of company. It means that shareholders lose their money.
Supplier of production of Hydrolife can be also negatively affected by unethical business decisions of the company. If Hydrolife Company will give to suppliers unqualitative instead of qualitative one, they will lose their clients and income.
Unethical business decisions of the company can lead to financial problems and needs of reduction of workers. Employees will lose their job and income.
Hydrolife Company should ensure responsibility for the quality of cleaning of water to its customers. Customers must not have intestinal diseases after drinking water.
Hydrolife should not have stoppages with deliveries of their production for suppliers, should not increase the price of water and should guaranty the quality of production.
Hydrolife Company must observe labor legislation for its employees. It should pay the hire and bonuses, observe fixed working hours, guaranty normal conditions of working place.
Hydrolife responsible for informing of shareholders about business conditions of the company.
Entry-7 Effect of Technological Environment
As a modern and independent company which is up today Hydrolife Company use in producing department high qualitative technical equipment from Germany and Italy. This equipment is used for cleaning, mineralizing of water and pouring it in the different bottles. After all these water is loaded on the automobiles by autoloaders and production go to customers. (hydrolife.uz/water_born)
I do not think that Hydrolife need some extra new technical equipment, because the company was opened only 8 years ago and still have enough new and good equipment. From my point of view buying of extra new technologies will be the waste of money now.
Hydrolife Company also has its own site which is called hidrolife.uz. On this site the reader or the researcher may find all information about company, producing of all types of water by Hydrolife that he or she interested in. There is also the list of vacancies which are needed for company. The guest of the site can make online order of Hydrolife water of 18,9l value bottle.
I have only one recommendation to the creators of the site. The English part of the site is not very good because of some grammar mistakes.
1. [online]Available from :<hydrolife.uz/about> [Accessed 22 November 2011]
2. [online]Available from :<hydrolife.uz/production>[Accessed 22 November 2011]
3. [online]Available from :<hydrolife.uz/water_born>[Accessed 19 December 2011]
4. Jalilov, T.(2010),Water is not gift- Water is a good now, Zerkalo21,[online] Available from : < http://www.zerkalo21.uz/vnimaniyu_potrebiteley/voda_uje_ne_dar_-_voda_teper_tovar.mgr> [Accessed 22 November 2011]
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