Question

Manzi Natural Valley Limited is a company with a main business line of mineral water production to service the Zambian market. The company operates a plant in Chongwe area of Lusaka and operates a number of sales depots in the country. One sales depot was located in Nkana East of Kitwe which closed down a couple of months ago.

Perform a SWOT analysis to predict why the company closed the Kitwe sales office.

Answer 1

SWOT analysis to know why the company might have closed the Kitwe sales office due to following reasons:

Strength (Internal factors, it means the company can control these factors):

• The company has the potential of generating high ROI in Kitwe.
• The company has the capability of producing & supplying mineral water to every corner of the country.
• The company is already well established in the industry.
• The company has enough resources in the form of manpower, logistics, transport system to timely deliver the supply of mineral water to its customers.

Weakness (Internal Factors, it means the company can control these factors):

• Non-upgradation of technology relating to the processing of water.
• Less focus on cost reduction & cost control which outweighs the profits.
• Non-availability of experienced & well-trained employees.

Opportunities ( External Factors, it means the company cannot control these factors):

• Reduction of water bill charges by the government(local authority) of Kitwe.
• Non-availability of pure water to residents residing in the Kitwe & solely depending on the mineral water for drinking purpose.
• The drastic increase in the number of population of Kitwe which in turn resulted in an increase in number of customers who may be requiring the mineral water.

Threats ( External Factors, it means the company cannot control these factors):

• In coming days threat of non-availability of adequate water due to prediction of less rainfall.
• Probability of cancellation of the license by the government to operate the mineral water business due to violation of rules & regulations.
• Recent experiments which resulted in the development of advanced water filters & purifiers which is affordable & is more effective than mineral water.

To sum up, after conducting the above SWOT analysis the company might be incurring losses & to gain profits in short-run the company might have violated few rules & regulations due to which the government might have cancelled the licence to operate mineral water business in Kitwe.