ST. VINCENT DE FERRER COLLEGE OF CAMARIN, INC.
Institute of Accountancy and Business Administration
STRATEGIC MANAGEMENT PAPER
Submitted To:
PROF. HECTOR SANTOS
Submitted by:
Jose Daniel B. Tamondong
May 2023
1. INTRODUCTION
LF Belbes Water Refilling Station was sole-proprietorship business and registered in
Department of Trade and Industry (DTI) in January 2022. Initially, access to clean and safe
drinking water is essential for human health and well-being. In response to this need,
businesses such as LF Belbes Water Refilling Station have emerged to provide products and
services related to clean drinking water. LF Belbes Water Refilling Station is a business that
purifies and refills water containers, such as bottles and jugs, with safe and clean drinking
water. The business offers various container sizes, including 350 ml, 500 ml, 1 liter, 5
gallons, and 10 gallons of purified drinking water.
In addition to providing water products, LF Belbes Water Refilling Station also offers
delivery services to customers' homes or offices, making it convenient for them to have
access to clean drinking water without the need to travel to the physical store. Moreover, the
business offers water testing services to ensure that the water it provides meets the highest
quality and safety standards.
This strategic management paper aims to investigate the marketing strategies and
operational practices of LF Belbes Water Refilling Station. The business has a monthly sale
between ten thousand pesos 10,000 PhP to twenty thousand pesos 20,000 PhP and primarily
serves the grocery stores and canteens around the community. LF Belbes Water Refilling
Station has established a strong presence in the local market by providing high-quality, safe,
and convenient drinking water products and services to its customers.
Through this strategic management paper, the researcher seeks to understand the factors
contributing to LF Belbes Water Refilling Station's success, including its marketing
strategies, operational practices, and customer service approach. Furthermore, this paper aims
to provide insights for small business owners and entrepreneurs looking to start or improve
their own water refilling businesses. Ultimately, this paper seeks to contribute to the body of
knowledge on small business management, specifically in the context of water refilling
stations, and provide valuable insights into the importance of meeting customer needs and
providing high-quality products and services in today's competitive business environment.
The LF Belbes Water Refilling Station was located on Block 19 Lot 2 Phase 1. Caperyork
st., Greenborough subd., Sabang Dasmarinas Cavite. The business was operated by soleproprietor, Lino jr. Belbes, and as of today the business has five (5) regular employees.
II. RESEARCH DESIGN AND METHODOLOGY
The research design for this study will be quantitative in nature, using macro-economic
data to analyze the performance of LF Belbes Water Refilling Station. The study will use
secondary data sources, such as government reports and published research articles, to collect
information on the Philippine economy, the water refilling industry, and the performance of
LF Belbes Water Refilling Station.
The study will use a combination of desk research and data analysis methods. The desk
research will involve reviewing relevant literature and reports to gather information on the
Philippine economy, the water refilling industry, and the performance of LF Belbes Water
Refilling Station. The data analysis will involve using statistical software, such as SPSS or
Excel, to analyze macro-economic data, such as gross domestic product (GDP), inflation
rates, and employment rates. The study will use regression analysis to identify the
relationships between macro-economic factors and the performance of LF Belbes Water
Refilling Station.
The study assumes that macro-economic factors, such as GDP, inflation rates, and
employment rates, have a significant impact on the performance of LF Belbes Water Refilling
Station. The study also assumes that the secondary data sources used in this study are reliable
and valid. Finally, the study assumes that the sample size and data used in the regression
analysis are representative of the population and accurately reflect the relationship between
macro-economic factors and the performance of LF Belbes Water Refilling Station.
Scope and Limitation
The study focuses on analysing the performance of LF Belbes Water Refilling Station
by using secondary data sources to examine macro-economic factors such as GDP, inflation
rates, and employment rates. The study will also analyse the company's financial statements
and operational data to identify trends and patterns. However, the study is limited to
secondary data sources and does not include primary data collection, does not consider other
factors that may affect performance, and may not reflect recent developments in the business
performance.
III. VISION AND MISSION STATEMENT ANALYSIS
Vision Statement and Evaluation
LF Belbes Refilling Water Station Vision Statement is “Our vision aims to be leading
brand in the region by providing safe and affordable drinking water to communities while
promoting environmental awareness and sustainable practices.”
3.1 Vision Statement Evaluation
Parameter
Does it clearly answer the
question: What do we want to
become?
Yes / No
Yes
Is it concise enough yet
inspirational?
Yes
Is it aspirational?
Yes
Does it give clear indication as
to when it should be attained?
No
Remarks
The statement clearly answers the question of
what LF Belbes Water Refilling Station wants
to become. It wants to become a leading
brand in the region by providing safe and
affordable drinking water to communities
while promoting environmental awareness
and sustainable practices.
The statement is concise yet inspirational. It
communicates the company's goals in a brief
and straightforward manner while also
inspiring readers with its commitment to
promoting environmental awareness and
sustainable practices.
The statement is aspirational. It sets a high
standard for the business to become a leading
brand in the region, which is an ambitious
goal that requires continuous effort and
improvement.
The statement does not give a clear indication
of when the goal of becoming a leading brand
in the region should be attained. However,
this is not necessarily a requirement for a
vision statement, as it is often a long-term
goal that may not have a specific timeline.
Mission Statement Analysis and Evaluation
The mission statement of LF Belbes Water Refilling Station is: “Our mission is to
provide safe, affordable, and environmentally friendly drinking water while promoting
sustainability and responsible business practices, we believe in making safe drinking water
accessible to all and strive to continuously improve our service.”
3.2 Mission Statement Evaluation
Parameter
Yes/No
Customers
Yes
Product and Services
Yes
Markets
Yes
Technology
No
Concern for survival,
growth, profitability
No
Philosophy
Yes
Self-Concept
No
Concern for
Employees/ public
image
No
Concern for nation
building
No
Remarks
The mission statement demonstrates a customercentric approach by emphasizing the company's
commitment to providing safe and affordable
drinking water and making it accessible to all.
The mission statement clearly articulates the
business’s goal of providing safe, affordable, and
environmentally friendly drinking water while
promoting sustainability and responsible business
practices.
The mission statement indicates the company's
focus on serving communities that need safe
drinking water.
Not explicitly mentioned in the mission
statement.
Not explicitly mentioned in the mission
statement, but implied through the commitment to
responsible business practices.
the mission statement highlights the company's
philosophy of promoting sustainability and
responsible business practices.
Not explicitly mentioned in the mission
statement.
Not explicitly mentioned in the mission
statement, but implied through the commitment to
responsible business practices and promoting
sustainability.
Not explicitly mentioned in the mission
statement.
3.3 Recommendations
Recommended Vision
“Our vision is to become the most trusted provider of safe, affordable, and sustainable
drinking water solutions in the region, committed to promoting environmental awareness and
fostering community well-being.”
This revised vision statement is concise, inspirational, and addresses the key elements
that are important to the LF Belbes Water Refilling Station. It captures the business’s
aspirations and goals, while also emphasizing its commitment to sustainability, community
well-being, and environmental responsibility.
Recommended Mission
"Our mission is to provide safe, accessible, and sustainable drinking water solutions
that enhance the health and well-being of the communities we serve. We are committed to
promoting environmental responsibility, fostering economic growth, and maintaining the
highest standards of quality and service excellence."
This revised mission statement is clear, concise, and addresses the key elements that
are important to the LF Belbes Water Refilling Station. it captures the company's core values,
goals, and commitment to sustainability, community well-being, and customer satisfaction.
IV.
EXTERNAL FACTORS THAT HAVE RELEVANCE AND MAJOR IMPACT
ON WATER REFILLING INDUSTRY AND LF BELBES WATER REFILLING
STATION:
4.1 General Environment
a. Economic Developments
Economic developments play a crucial role in the water refilling industry in the
Philippines. Factors such as GDP growth, disposable income levels, and consumer spending
patterns directly impact the demand for packaged drinking water. Rising incomes and
urbanization have led to an increased demand for convenience and safe drinking water,
driving the growth of water refilling stations. Moreover, economic stability, investment
climate, and government policies on entrepreneurship and small business development also
influence the industry's prospects.
b. Political, Legal, Government Aspects
Government Regulations
The government plays a crucial role in regulating the water refilling industry in the
Philippines. The Department of Health (DOH) sets standards and guidelines for water quality,
safety, and packaging. Compliance with these regulations is mandatory, and failure to adhere
to them can result in fines or even closure of the business.
DOH Administrative Order No. 10 series of 2017 incorporates this policy, which
establishes the standards and procedures for drinking water quality to safeguard public and
consumer health.
The PNSDW of 2017 applies to all drinking-water service providers, including
government and private developers and operators, bulk water suppliers, water refilling station
operators, water vending machine operators, and ice manufacturers. Additionally, it applies to
all establishments, including residential, commercial, industrial, and institutional buildings,
that supply or serve drinking water, as well as to water testing laboratories, health and
sanitation authorities, and the general public.
The guidelines conform to set standards for drinking-water quality, water sampling and
evaluation of results upon examination, and are consistent with the WHO's improved
framework for drinking-water safety, which consists of health-based targets, safely managed
water systems, and a system of independent surveillance.
To ensure drinking water safety, there are seven guidelines that must be followed, which
include measuring quality, water sampling and examination, evaluating results, classifying
quality parameters, and implementing quality assurance/quality control for water laboratories,
as well as a water safety plan and quality surveillance.
To implement this policy, various government, and non-government agencies, including
DOH, local government units, water laboratories, and drinking-water service providers and
operators of establishments or buildings, have partnered, each with a defined role in the
undertaking.
https://doh.gov.ph/node/12121
Institutions and policies
The Department of Health (DOH), which is tasked with safeguarding public health, is
the primary agency responsible for protecting the quality of drinking water. The Sanitation
Code of the Philippines mandates DOH to issue implementing rules and regulations that
prescribe sanitary standards for water supply systems, including water refilling stations.
The Center for Health Development (CHD), the regional branch of DOH, provides
technical assistance to local government units and monitors the implementation of DOH
programs, including water quality and sanitation standards. For water refilling stations, CHD
is authorized to issue initial and operational permits.
Local Government Units (LGUs) are mandated by Presidential Decree (PD 856) to
issue various permits and conduct sanitary inspections of water refilling stations, including
sanitary permits, clearance, health certificates, certificate of potability, drinking water site
clearance, closure order (if necessary).
The Water Quality Association of the Philippines Inc. (WQAP) is a private
organization composed of 250 members engaged in the manufacture, sale, and distribution of
water refilling station equipment and supplies, as well as water treatment and purification
equipment and technology. About 85% of its members operate water refilling stations.
The Association of Water Refilling Entrepreneurs (AWARE) focuses on resolving
business management issues faced by its members.
The Sanitation Code of the Philippines or Presidential Decree No. 856 (PD 856) is the
primary law mandating all establishments to comply with existing sanitary standards to
protect public health. The Supplemental Implementing Rules and Regulations on Water
Supply of PD 856 issued in 1999 provides guidelines for operating a water refilling station.
c. Social Factors
The water refilling industry in the Philippines is not only influenced by economic and
technological factors but also by various social factors. These factors encompass cultural
norms, consumer preferences, health consciousness, and the perception of water quality and
safety. This essay explores the relevance and major impact of social factors on the water
refilling industry in the Philippines, shedding light on how these factors shape consumer
behavior, industry trends, and business strategies.
Cultural Norms
Cultural norms significantly impact the demand for water refilling services in the
Philippines. Traditional beliefs and practices related to water consumption vary among
communities and regions. Some communities may prioritize traditional water sources, such
as deep wells or natural springs, due to cultural significance or perceived purity. In contrast,
other communities may be more open to accepting packaged drinking water as a convenient
and reliable alternative. Understanding cultural norms is crucial for water refilling businesses
to tailor their services and marketing strategies to specific target markets and promote cultural
acceptance of their products.
Consumer Preferences
Changing consumer preferences play a vital role in shaping the water refilling
industry. Consumers are increasingly seeking convenience and ready-to-drink products,
driven by busy lifestyles and the need for accessibility. Water refilling stations provide a
convenient solution by offering purified drinking water that can be easily obtained and
consumed. The preference for affordability, reliable sources of safe drinking water, and
reduced plastic waste also contributes to the demand for water refilling services. By aligning
their offerings with consumer preferences, water refilling businesses can attract a wider
customer base and maintain a competitive edge in the market.
Perception of Water Quality and Safety
The perception of tap water quality and safety also influences the demand for water
refilling stations. Concerns about water contamination, taste, or odor can lead consumers to
seek alternative sources of drinking water. Water refilling stations, with their emphasis on
thorough filtration and purification processes, are perceived to provide a higher level of water
quality and safety compared to tap water. Effective marketing campaigns highlighting the
stringent quality control measures, certifications, and regular testing can help alleviate
consumer concerns and build trust in the reliability of water refilling stations.
Health and Wellness Trends
The growing focus on health and wellness has a positive impact on the water refilling
industry. Proper hydration and water intake are recognized as essential for maintaining
overall health and well-being. As consumers become more health-conscious and prioritize
hydration, they seek reliable and accessible sources of purified drinking water. Water refilling
stations, offering convenient access to purified water, cater to this growing trend and position
themselves as a preferred choice for health-conscious individuals. Collaborations with fitness
centers, health clubs, and wellness establishments can further leverage this trend and create
synergistic partnerships.
d. Opportunities
Increasing Health Consciousness
The growing emphasis on health and wellness presents a significant opportunity for
water refilling stations. Consumers are increasingly aware of the importance of drinking safe
and purified water for their well-being. By promoting the health benefits of purified water
and positioning themselves as a reliable source of clean drinking water, water refilling
stations can tap into the expanding health-conscious consumer segment.
Rising Demand for Convenience
The fast-paced lifestyle of urban dwellers in the Philippines has led to a rising demand
for convenient solutions, including access to safe drinking water. Water refilling stations offer
a hassle-free and time-efficient option for consumers to obtain purified water. By strategically
locating their stations in densely populated areas or near workplaces, water refilling
businesses can cater to the convenience-seeking behavior of consumers and capture a larger
market share.
Increasing demand of water refilling stations and stores that sell purified water (opportunity)
Water refilling stations, which sell purified water that conforms to national drinking
water standards and has fewer impurities than traditional water systems, are experiencing an
increase in demand. This is due to the rising cost of household water purifiers and bottled
water, making water refilling stations managed by private entrepreneurs a more affordable
and convenient option. Nationwide, there are approximately 3,000 water refilling stations that
offer purified water of comparable quality to bottled water at a lower price, ranging from P 50
to P 120 per 5-gallon container or about P 2.50 to P 6.00 per liter in Metro Manila.
Most water refilling stations in Metro Manila are connected to the pipes of two
concessionaires, Maynilad Water Company or Manila Water Company, for their source of
raw water. Private deep wells are used in other areas. The water is further purified using
various water treatment equipment, and typical water refilling stations can produce 3,000 to
12,000 liters of purified water per day. To accommodate the convenience of consumers,
purified water is now delivered directly to people's homes in 5-gallon containers. For
instance, Aqua Sure, a water refilling station in Metro Manila, can deliver 5,500 gallons
(25,000 liters) of purified water per day to its 8,000 household clients.
Environmental Sustainability
With increasing concerns about plastic waste and environmental conservation, there is
a growing demand for sustainable solutions in the water industry. Water refilling stations have
the opportunity to position themselves as environmentally friendly alternatives to single-use
bottled water. By offering refillable containers or eco-friendly packaging options, businesses
can attract environmentally conscious consumers who seek sustainable and responsible
choices.
Collaboration with Health and Fitness Establishments
Collaborating with gyms, fitness centers, wellness retreats, and health-oriented
establishments can create mutually beneficial partnerships for water refilling stations. By
positioning themselves as the preferred water provider for health-conscious individuals
engaged in fitness and wellness activities, water refilling stations can gain exposure to a
targeted consumer base. This collaboration can include cross-promotions, joint marketing
initiatives, or exclusive partnerships to maximize brand visibility and customer acquisition.
Expansion into Underserved Areas
While water refilling stations are prevalent in urban areas, there are opportunities for
expansion into underserved or rural areas in the Philippines. Many remote communities still
lack access to clean drinking water. By establishing water refilling stations in these areas,
businesses can fulfill a vital need while creating sustainable business opportunities.
Collaboration with local governments or NGOs can facilitate market entry and provide
support in infrastructure development and community engagement.
Technological Advancements
Embracing technological advancements can enhance the efficiency, convenience, and
overall customer experience of water refilling stations. Implementing automated processes,
online ordering platforms, and digital payment systems can streamline operations and attract
tech-savvy consumers. Additionally, investing in advanced water treatment technologies can
improve water quality and differentiate businesses in the market.
Technological advancements impact the water refilling industry by improving water
treatment processes, enhancing operational efficiency, and ensuring product quality and
safety. Innovations in filtration systems, disinfection technologies, and quality monitoring
systems enable water refilling stations to provide purified and safe drinking water to
consumers. Moreover, advancements in automated processes, digitalization, and online
platforms for ordering and delivery services have transformed the industry's operations and
customer experience.
Catering to Cultural Preferences
Recognizing and catering to cultural preferences can be a key opportunity for water
refilling stations in the Philippines. Different communities may have specific preferences for
container sizes, packaging materials, or traditional water sources. Adapting offerings to align
with cultural norms and local preferences can help businesses gain acceptance and build
strong customer loyalty within those communities.
Educating Consumers
There is an opportunity for water refilling stations to educate consumers about the
importance of drinking safe and purified water. By providing informative resources,
organizing awareness campaigns, or conducting water quality testing events, businesses can
build trust, raise awareness, and position themselves as industry leaders. Educating
consumers about the advantages of choosing water refilling stations over other alternatives
can drive market demand and create a loyal customer base.
Value-Added Services
Water refilling stations can differentiate themselves by offering value-added services
that go beyond providing purified water. This can include additional services such as home
delivery, water quality testing, or personalized water treatment solutions for specific customer
needs. By diversifying their offerings, businesses can attract a wider customer base and
increase customer loyalty.
e. Ecological Aspects
Ecological factors are increasingly relevant to the water refilling industry in the
Philippines. As consumers become more environmentally conscious, there is a growing
demand for eco-friendly practices and sustainable packaging solutions. Water refilling
stations that implement water conservation measures, promote reusable containers, and
minimize plastic waste are likely to attract environmentally conscious consumers.
Additionally, concerns related to water scarcity, pollution, and climate change highlight the
need for sustainable water management practices in the industry.
Demographics
The Philippines is rapidly urbanizing, and the growing cities struggle to provide new
residents with adequate water and sanitation services. This presents an opportunity for water
refilling stations to expand their market. The middle-class population in the Philippines is
growing, and they have become more health-conscious, creating a demand for safe drinking
water.
Water scarcity in the Philippines (threats)
The availability of clean and safe water is critical to the water refilling industry. Drought,
contamination, and over-extraction of groundwater are some of the factors that can affect the
availability and quality of water.
Philippines has, 52% of its 109 million population, or 57 million people, do not have
access to a dependable and safely managed water source, while 39% or 43 million people
lack safely managed sanitation facilities. Despite economic growth, the Philippines still faces
considerable obstacles in addressing the issue of water and sanitation accessibility.
Urbanization is rapidly expanding, and cities are encountering difficulties in accommodating
the needs of new residents by providing adequate water and sanitation services.
4.2 Industry and Competitor Analysis
Porter’s Five Forces Competitive Analysis
Porter's five forces framework is a widely used tool to analyse the competitive
environment of an industry. Here is an analysis of the water refilling industry in the
Philippines using the framework:
Threat of New Entrants
In the case of the water refilling industry in the Philippines, this threat is high. One
reason for this is that the industry has relatively low entry barriers. Unlike other industries
that require significant investment in technology, manufacturing equipment, or distribution
channels, starting a water refilling station requires relatively low initial capital investment.
This makes it easier for new players to enter the market and compete with existing players.
Additionally, the high demand for clean and safe drinking water creates an attractive
market for new entrants. With growing concerns about the safety and quality of tap water in
the Philippines, there is a constant need for reliable sources of purified drinking water. This
demand presents a significant opportunity for new players to enter the market and capture
market share.
Overall, the low entry barriers and high demand for purified water make the threat of
new entrants in the water refilling industry in the Philippines high. Existing players will need
to continually innovate and differentiate their offerings to maintain their market position in
the face of new competition.
Bargaining Power of Suppliers
The water refilling industry relies on three main inputs: water, electricity, and
filtration equipment. The suppliers of these inputs are fragmented, which means that there are
many suppliers available in the market. This fragmentation in the supplier base reduces the
bargaining power of individual suppliers, as water refilling stations can easily switch from
one supplier to another.
Additionally, the water refilling industry has low switching costs, which means that it
is relatively easy and inexpensive for water refilling stations to switch from one supplier to
another. For example, if a water supplier increases its prices, a water refilling station can
easily switch to a different supplier without incurring significant costs or disruption to its
operations.
Overall, the fragmented supplier base and low switching costs reduce the bargaining
power of suppliers in the water refilling industry. As a result, suppliers are less able to exert
influence over the industry and its prices. Therefore, the bargaining power of suppliers is
considered low.
Bargaining Power of Buyers
In the water refilling industry, the buyers are households, offices, and other
commercial establishments that purchase water from refilling stations. These buyers are not
concentrated and they do not have significant influence over the price or quality of the water
supplied by refilling stations.
Moreover, the cost of switching between water refilling providers is low, and the
product is undifferentiated, which further weakens the bargaining power of buyers. With low
switching costs, buyers can easily switch to other refilling stations that offer better prices or
quality. In addition, the product offered by one refilling station is not significantly different
from that offered by other stations, which reduces buyers' ability to demand better quality or
features.
In conclusion, due to low switching costs, undifferentiated products, and dispersed
buyers, the bargaining power of buyers in the water refilling industry is low. This means that
the industry can charge a reasonable price for its product without the fear of losing a
significant number of buyers.
Threat of Substitutes
In the case of the water refilling industry in the Philippines, the main substitutes for
water refilling stations are bottled water and home filtration systems. Bottled water is a
popular substitute for water refilling stations because it is widely available and easy to
transport. However, it is more expensive than water refilling stations, which may make it less
attractive for price-sensitive consumers.
Home filtration systems are another substitute for water refilling stations, as they
allow consumers to purify their own tap water at home. However, these systems require an
initial investment in equipment, which may not be affordable for some consumers.
Therefore, the threat of substitutes for the water refilling industry in the Philippines is
considered moderate. While there are substitutes available, they may not be as convenient or
cost-effective as water refilling stations. However, if prices for water refilling stations were to
rise significantly, or if consumers were to become more concerned about the environmental
impact of plastic bottles, the threat of substitutes could increase.
Rivalry Among Existing Competitors
The water refilling industry in the Philippines is characterized by high competition
with numerous small and medium-sized enterprises competing for market share. These
enterprises have a low level of product differentiation, leading to intense price competition.
As a result, the industry lacks a dominant player, and each firm has a relatively small market
share. The low switching costs for customers also contribute to the high level of competition
among existing competitors.
Moreover, the water refilling industry has low entry barriers and attracts new entrants.
This situation exacerbates the competition among existing players, forcing them to maintain
or reduce their prices to remain competitive.
Overall, the high level of competition among existing players in the water refilling
industry in the Philippines is driven by the lack of product differentiation, intense price
competition, and low switching costs for customers. As a result, firms need to focus on
operational efficiency and cost reduction to remain competitive.
Conclusion
In conclusion, the water refilling industry in the Philippines is highly competitive,
with low barriers to entry and intense price competition among existing players. While the
bargaining power of suppliers and buyers is low, the threat of new entrants is high. The threat
of substitutes is moderate. To succeed in this industry, players need to focus on operational
efficiency, cost control, and product differentiation. Additionally, the industry is highly
regulated, and compliance with regulations is critical to maintaining a good reputation.