Water From Iceland

To import or not to import, that is the

question

Executive Summary

Currently Stan is planning to Currently Stan is planning to choose a full time career at choose a full time career at an investment bank, or an investment bank, or develop a Nordic water develop a Nordic water importing business.importing business.

Issues with importing Issues with importing bottled water to the U.S. bottled water to the U.S. market makes the venture a market makes the venture a difficult undertaking for difficult undertaking for StanStan

A decision has been made A decision has been made to not import bottled water to not import bottled water from Iceland to the U.S. and from Iceland to the U.S. and Stan should accept the job Stan should accept the job position at Citicorpposition at Citicorp

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3

BACKGROUND

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All About Stan

Job in investment banking sector of

Citicorp

Back from a trip to Iceland and impressed

by its great tasting water, he wondered if he could sell it in the

U.S.A.

5

What’s in

Water?

6

Water, Water Everywhere

Sales in U.S. $ Billions and Market Share of U.S.

Non-alcoholic Beverage Sales, 2007

7

70% of bottled water consumers are located mainly

in California, Texas, Florida, New York and Arizona.

CALIFORNIA consumes the most!

Water in the U.S.A.8

Water Drinkers

U.S. Bottled Water Market Volume, 1976-2007U.S. Bottled Water Market Volume, 1976-2007

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Bottled Water Consumption

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TrendsU.S. Per Capita/Year Consumption of U.S. Per Capita/Year Consumption of

DrinksDrinks

Gallon

s,

(Per

cap

ital/

year)

Gallon

s,

(Per

cap

ital/

year)

YearYear YearYear

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TrendsU.S. Per Capita/Year Consumption of U.S. Per Capita/Year Consumption of

DrinksDrinks

YearYear

All Three Types of Beverages

YearYear

Gallon

s,

(Per

cap

ital/

year)

12

ForecastsForecast of U.S. Non-Alcoholic Beverage Forecast of U.S. Non-Alcoholic Beverage

Sales, 2008-2011Sales, 2008-2011

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What’s in your Bottle?

U.S. Market Share of Bottled Water by Segment in 2007 (Volume)

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Trends

Year Year

Volu

me s

old

, m

illion

s o

f g

allon

s

Volu

me s

old

, m

illion

s o

f g

allon

s

U.S. Bottled Water Market by Segments

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KEY ISSUES

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Key Issues Affecting

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Importing Nation: The United States

18

Com

petitio

n in

the U

.S.A

.19

Competitors20

20

08

-20

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Rece

ssion

A report by industry analysts A report by industry analysts found:found:

““Double digit increases, Double digit increases, of bottled water sales of bottled water sales have stopped rising” have stopped rising”

(NPR.ORG)(NPR.ORG)

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Govern

ment

Regula

tion

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Enviro

nm

enta

l Asp

ects

““40 million bottles go into 40 million bottles go into trash and become litter trash and become litter everyday in the US alone, everyday in the US alone, only 30% of those bottles only 30% of those bottles are recycled” (MSNBC) are recycled” (MSNBC)

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Exporting Nations: Iceland

Government Government RestrictionsRestrictions

Joint VenturesJoint Ventures

Financial Financial MeltdownMeltdown

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Government Restrictions

Export controls by the Export controls by the governmentgovernment

Percentage of Percentage of ownership by foreign ownership by foreign firms firms

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Join

t Ventu

res

Risks associated with entering into Risks associated with entering into themthem Potential benefits Potential benefits

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Financia

l Meltd

ow

n Poor financial health may increase risk of Poor financial health may increase risk of

doing business with Iceland doing business with Iceland

It can dramatically affect business planning It can dramatically affect business planning overalloverall

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RECOMMENDATIONS

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Alternative 1: Don’t Import

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Alternative 2: Import but Target

Niche Market

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Alternative 3: Lobbying

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RECOMMENDATION32

QUESTIONS