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Rotoplas: Bringing More and Better Water by John D. Macomber and Carla Larangeira

Part 1. Preparing the story

· Where is this happening? In which country? Describe the business environment of the places mentioned in the case.

Mexico City had suffered several water-related crises, with its population suffering from floods, droughts, water cuts and diseases. Although some access to running water services was practically universal for the residents of Mexico City, the services were limited or discontinuous.

Currently, in Mexico there are about 27 million homes that solve their problems to access the water supply with the purchase of water bottles and bottles, says the director. For this reason, Rotoplas considers that there is a wide potential for market penetration.

· When did it happen? Mention what was going on in the world at that particular time. Private companies were turning to drinking water in the megacities of the world due to the impacts of climate change, including droughts and floods. With more than 30% of the world's renewable water resources, Latin America is the continent with the highest availability of this resource. In the Latin American and Caribbean Region, only 10 countries have a certain degree of services managed safely, that is, located in the home, available when needed and free from contamination.

One of the big problems in the water sector in Europe due to the crisis has been the lack of investment in infrastructure. This is causing an aging of the same with the consequent increase in breakdowns and losses. In addition, in countries such as Spain, the fulfillment of certain commitments and obligations such as the purification of all waters due to lack of investment and maintenance of certain treatment plants has been delayed.

· What is the overall business situation? Describe it at length.

From January to September 2019, Grupo Rotoplas recorded sales of 5,978 million pesos, 4.2% more than the same period in 2018. Meanwhile, during the first nine months of last year, the operating flow was 1,025 million pesos, 9.9 % more than in the same period of 2018, according to the information in your financial report.

Rotoplas has a presence throughout the continent, from Argentina to Canada. Part of the success is that the countries of the region have, more or less, a purchasing power and growth possibilities similar to that of Mexico. So Mexican companies can have good opportunities in that market, but you have to know how to take advantage of them. Rotoplas has eight plants in Mexico, in addition to presence in Guatemala, El Salvador, Honduras, Costa Rica, Nicaragua, Ecuador, Peru, Argentina, and Brazil.

· Define the problem and list all the variables that affect it, explaining why?

Could Rotoplas services be part of the solution to the water crisis in the capital of the country? What changes in prices and regulations could lead to financial and technical solutions to the water crisis in Mexico City?

• Mexico continues to be the company's main sales force, generating more than 70% of the total, although its prices are 30% more expensive than those of the competition.

• The presence of larger competitors such as Suez and Veolia.

• As well as pricing and unfavorable regulations, they could slow future growth.

• Currently, the sufficient supply of drinking water for human consumption is at severe risk due to climate change, and there is a crisis of (in) water security.

· Who else is involved? Mention all the people, companies and institutions that are involved in the whole situation, explaining the existing connections between them. Once you cover everything, this first part sho uld be at least three pages long.

One of its great advantages to achieve its growth is an agreement with Infonavit. The agreement promotes, through preferential conditions for the developer and a subsequent certification of the Institute, the installation of pipes, water tanks, filters and septic tanks of Rotoplas in homes financed by the agency.

For Francisco Gutiérrez, Marketing Director of Rotoplas, in recent years the company has gone from being a manufacturer of water tanks to dedicate itself to improving and storing water.

Part 2. Drafting the story

In order to re-draft a storyline for the business case you selected in Part 1. Once you have a good grasp of it, try to rewirte the business case in the terms we have reviewed thus far:

· Business environments.

Millions of people use water every day in their daily activities, but behind each drop, there is a different story. Whether you use the water to take a shower after a long day at work or to give your baby your first bath, we all have something in common: we need to be certain that the water that reaches us is water from the Best Quality.

Rotoplas helps to achieve this, because all its products have the latest in innovation and technology to offer you excellent services and goods, which will bring you more and better water.

· Clusters and local economies.

Most of the water consumed in urban areas throughout the country comes from groundwater, but in the central and northern areas it is very common that the capacity of the aquifers is exceeded. In the Valley of Mexico this problem has caused water to be extracted from greater depths, aggravating the subsidence of the land.

The cities of Bajío are also in need of pumping deep water, but due to the soil conditions, this may contain significant concentrations of fluoride and arsenic. Fluoride can cause dental and skeletal fluorosis, as well as a decrease in cognitive abilities in children, while arsenic has carcinogenic, neurotoxic and diabetes prevalence effects.

· Elements of the primary, secondary and tertiary sector.

If we start with the primary sector, the most immediate and most popular relationship between water and agriculture is irrigation. Farmers often form irrigation communities to share and enjoy a public good such as water.

Within the secondary sector, water is used as raw material or auxiliary for processes, which is essential to control the water needs of the product life cycle and ensure a lower water footprint throughout the chain, while also seeking minimizing the impact of the flows returned to the environment.

The tertiary sector is, in turn, one of the major stakeholders regarding its relationship with water as a facilitator of business opportunities. For this sector, its clients can dive, swim or simply contemplate blue gold in all its splendor.

Due to all the reasons stated above, the three primary, secondary and tertiary sectors are unaffected and threatened by the hydrometeorological extremes that can cause economic losses with the consequent job losses.

· Culture, diversity, and demographics.

In historical terms, water management in Mexico has been oriented to meet demand and has faced the challenges inherent in population growth with large investments in hydraulic infrastructure. Thus, a problem reflected in overexploitation, pollution, conflicts, low efficiency of infrastructure, lack of social justice in access to resources and services, and the absence of understanding of values and costs of water was created - no not only economic, but also ecological and social. In other words, we have a crisis in the management system, where the actions have had a vision reduced to technical intervention, which does not involve the population, nor does it consider ecosystem aspects.

The culture of water can be interpreted as a continuous process of production, updating and individual and collective transformation of values, beliefs, perceptions, knowledge, traditions, aptitudes, attitudes and behaviors in relation to water in everyday life. In that sense, we have always had a water culture, or rather, a hydraulic culture. In general, the population is not susceptible to the problem, it does not know the necessary processes for the water to reach its home and the procedures used for its treatment and, therefore, it does not recognize the economic value of the water service, it does not save And he doesn't pay for this one. Mexico City had suffered several water-related crises, with its population suffering floods, droughts, water cuts, and diseases.

Although some access to running water services was practically universal for the residents of Mexico City, the services were limited or discontinuous. Currently, in Mexico there are about 27 million homes that solve their problems to access the water supply with the purchase of water bottles and bottles, says the director. For this reason, Rotoplas considers that there is a wide potential for market penetration.

· Financial frameworks.

In the report before the Mexican Stock Exchange (BMV), the company reported that until the third quarter of 2019 capital investments represented 4% of sales, and of these resources, 75 million pesos were allocated to treatment plants and water recycling

According to its report for the first quarter of this year, Mexico is the most mature market for Rotoplas, as the country consolidated 57% of the firm's total net sales, while Argentina ranked second.

· Politics and policies

In our country we manage a series of permanent regulations for the good management of our purification processes. The most important role is to properly apply them. The main and most important standards managed by the water operating agencies are:

Official Mexican STANDARD NOM-180-SSA1-1998, Environmental Health. Water for human use and consumption. Domestic type treatment equipment. Sanitary requirements.

The objective of water supply programs for human use and consumption is to guarantee that the entire population reaches an adequate supply of good quality water. In Mexico, in practice, these goals have not been achieved, so a certain number of users resort to intra-household methods to remedy deficiencies in the quality of the water supplied at the municipal level.

In short, what do you see there and what you do not? Your write-up should be at least three pages long.

You will be evaluated based on the thoughtfulness of your story, the relevance of the main points you can make, the chosen characters, the setting, the business strategy, taking into account what we have seen in the course so far about business environments, cultures, and attractive economic poles and industries in the region.

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