Kingfisher School of Business and Finance

Mac Arthur Highway, Lucao District, Dagupan City 2400

An Analysis Paper on
Crystal Clear Water Store under Solerex Water Technologies Inc.

Submitted by:
Dadacay, Erica N.
Cruz, Zarina Liezel C.
Ferrer, Sylvester A.
Ilumin, Marixi S.
Joaquin, Jolina V.
Melchor, Celine Joyce D.
Ocampo, Jofel Vincent A.
Oliveras, Jayvil M.
Padaoang, Jamaica E.
Sarmiento, Rochelle M.

Submitted to:
Ms. Maybelle Ann S. Lopez, MBA
Sir Daryl Ejeil F. Sinlao
Sir Leo P. Mamaril
 Table of Contents
I. Introduction 4
II. Company Background
A. Mission, Vision and Company Objectives 4
B. History and Products/ Services Offered 5
C. Brand name, Trademark, and Significant Awards/ Certifications 6
D. Business Location and Branches 6
E. Franchising Information 6
III. Global Market Analysis
A. Company’s Trading Area 7
B. Regional Trading Blocs 7
C. Economic and Political Environment 8
D. Cultural and Ethical Environment 10
E. Product Development and Global Marketing Strategies 12
F. Intellectual Property Rights Protection 13
G. Corporate Social Responsibility 13
IV. Conclusion 14
V. References 15
VI. Appendix (Exhibits) 17
 Executive Summary
Solerex Water Technologies Inc. is a distinguished organization with a pleased and
unmistakable history. It is established back in 1990 and had initiated its well-known brand in the
Philippines named “Crystal Clear” in 1997, carving out its unique identity. Its mission is to
convert resources and assets into capital and cash flows in a profitable, innovative, equitable,
and sustainable manner. With the continuing creativity, innovation, and improvement, Crystal
Clear Water Stores network is to survive, profit, and grow in a rapidly changing and highly
competitive world.
Crystal Clear is engaged in the sale, franchising, and management of water refilling
stations, producing safe potable water through the use of its latest technology. The company
assures to provide the highest quality purified water as the components used in the process
were assembled in the USA, under the strictest specifications, tailored to suit the condition in
the Philippines, and passed FDA standards. The company was able to offer superior equipment
at a relatively low cost, building the 3rd most extensive water franchise store network in the
Philippines after only two years, having expertise and supplier channels in reverse osmosis,
water filtration, and purification systems. And now, there are over 500 water store franchise
networks nationwide, and Crystal Clear expanded its operations in countries like Indonesia,
Malaysia, Singapore, Hong Kong, Guam, Papua New Guinea, and hopefully in Sierra Leone,
Africa. Some of the well-known clients of Crystal Clear Inc. are big companies in the Philippines,
including City of Dreams Manila, Megaworld Lifestyle Malls, Okada Manila, Privato Hotel, and
Florabel.
Over the years, Crystal Clear received various commendations and awards from several
prestigious organizations, including the Most Outstanding Water Technology System, Most
Outstanding Purified Drinking Water Brand, and a Franchise Excellence Award “Outstanding
Filipino Franchise Hall of Fame.” Its services and product excellence are continually recognized
as it reaches its goal to be the country’s premier provider of world-class drinking water geared
towards globalization, equipped with competent professionals imbued with dedication and
integrity.
I. INTRODUCTION
Since globalization hits the world, businesses entering and expanding their operations in the
international setup become widespread. It is mainly because entering the foreign markets
provides better opportunities for businesses to widen their market reach, increase profit
potential, have greater access to experts and talents, reduce business’ costs, and gain stability
through diversification. Several strategies, such as exporting, licensing, franchising, joint
venture, direct investment, and wholly-owned subsidiary, are used by those businesses in order
to enter the global markets. The group learned that one of the businesses that grow locally and
internationally is Solerex Water Technologies Inc. It is established back in 1990 and had
expanded its operation in 1997 by initiating its well-known brand in the Philippines named
“Crystal Clear.” It operates not just in the Philippines but also in countries like Indonesia,
Malaysia, Singapore, Hong Kong, Guam, Papua New Guinea, and hopefully in Sierra Leone,
Africa soon.
This paper will contain discussions on how the chosen company made its move towards
its global expansion. Specifically, it targets to assess the steps taken by Crystal Clear in
entering the global market and identify the factors it has taken into consideration in engaging in
cross-border operations. All the information is obtained through web searches of the Internet
and the official website of the company.
In conclusion, this paper would give us ideas on what to consider and implement when
going to a globally competitive business. It will provide in-depth information about the potential
of the business, its expertise and quality supplier channels, and relatively cheap priced
equipment, which made the franchising strategy ventured by the owners to become successful.

II. COMPANY BACKGROUND

A. Mission, Vision and Company Objectives
Mission Statement
To convert our own and our members/ franchisees’ resources and assets into capital and
cash flows in a profitable, innovative, equitable and sustainable manner. Our profitability will
establish our similarity with other companies in the water improvement industry. But our
commitment to innovation, equity and sustainability will establish our radical difference from
them and also to provide affordable Purified Drinking Water. We believe that our continuing
creativity, innovation and improvement is imperative if our Crystal Clear Water Stores network is
to survive, profit and grow in a rapidly changing and highly competitive world.

Vision
To be the country’s premier provider of world class drinking water geared towards
globalization, delivering excellent product and services; equipped with competent professionals
imbued with dedication and integrity.

Crystal Clear’s Objective

Crystal Clear aims at producing safe potable water through the use of its latest
technology. According to their website, Crystal Clear Purified Drinking Water is a product that
utilizes only the highest quality materials, stringent manufacturing standards, and strictest
quality control measures.
Furthermore, they make sure that the source water is refined into a pollutant and
contaminant – free product using the latest state-of-the-art-purification technology. Their process
also goes through a series of microfiltration to remove suspended solids and other particulates.
Lastly, the product undergoes closed loop re-circulating Ultra Violet Irradiation and Ozone
Diffusion for final decontamination.
Through their use of proven technologies, they produce healthy great tasting water that is
made fresh daily. As a recognition of its excellent production process, Crystal Clear surpasses
the standards of US-Grade Quality Bottled Water.

B. History, and Products/Services Offered

Company History

Crystal Clear, INC. is a domestic corporation in the Philippines engaged in the sale,
franchising, and management of water refilling stations. For more than two decades in the
industry, it firmly established itself as a competent and trustworthy supplier of water filtration,
sterilization, and purification equipment.
Crystal Clear, INC was originally established in 1986 as an operating division of a hotel
interior design company under Designmasters, Inc. Subsequently, it took charge of the design,
engineering, fabrication, testing, and installation of all water treatment, conditioning, purification,
recycling, and sewerage systems and/or equipment of the company’s clients.
The enormous growth of the demand for its services and products independent from that
of its mother company lead Crystal Clear, INC to spinoff on October 17, 1990. It was
incorporated under the laws of the Republic of the Philippines as a separate, independent
business entity after four years. And it was able to expand its client base by 60% and sell 600
gallons a day of its bottled water. In 1997, Solerex Water Tech ventured into the water refilling
stations business. The company was able to offer the market superior equipment at a relatively
low cost by utilizing its expertise and supplier channels in reverse osmosis, water filtration, and
purification systems. Solerex launched the “Crystal Clear” brand, which expands at a fast rate.

Product and Services Offered

Crystal Clear, INC. engages in the sale, franchising, and management of water refilling
stations. It supplies water filtration, sterilization, and purification equipment. It has also been
bottling and delivering water to businesses and homes. The company assure that they provide
highest quality purified water all the time as the components used in the process were
assembled in the USA, under strictest specifications, tailored to suit the condition in the
Philippines and passed FDA standards.
The process of Crystal Clear surpasses the US-Grade Quality Bottled Water and used
the best proven technologies to produce healthy great tasting water. The company also offers
customized private labeled bottled water for all types of business and events. This custom
private label bottled water has been serves as a creative way of marketing or advertisement for
their clients and considered as a “Walking Billboard” that leaves the customers’ company name
and logo message in the hands of those who will consume the customized bottled water. The
customers can order online and design their bottled water by selecting the desired cap color and
bottle type and clicking on “Add logo” to upload an image for the label or clicking on “Insert text”
if there’s no image to upload. They also offer customized bottle for any occasions such as
wedding, birthday parties, holidays and even family reunions. Crystal Clear labeled bottle water
is a one-stop shop, giving their customers with a fully integrated services from
conceptualization, design, and implementation.
 Some of the well-known clients of Crystal Clear Inc. are big companies in the
Philippines, which includes City of Dreams Manila, Megaworld Lifestyle Malls, Okada Manila,
Privato Hotel and Florabel.

C. Brand name, Trademark, and Significant Awards/ Certifications

Solerex Water Technologies, Inc. is responsible for managing its Crystal Clear franchised
network and company owned water stores; sales and marketing of HACH Analytical Instruments
and Manufacturing, and distribution of Crystal Clear Bottled Water. It is also reliable for large
scale projects involving desalination plants, waste water treatment, commercial and industrial
projects. This company was able to venture outside the Philippines especially with its well-
known product with the brand name “Crystal Clear”. Their processes and operations comply
with regulations and standards implemented on various countries.
With its expertise and supplier channels in reverse osmosis, water filtration, and purification
systems, the company was able to offer the market superior equipment at a relatively low cost.
This, coupled with the strong name recall of the “Crystal Clear” brand, enabled it to expand at a
fast rate, building the 3rd most extensive water stations franchise store network in the
Philippines after only two years. Its trademark was recently updated last May 20, 2010 which
includes its brand name, logo and its tag line “All drinking water should be… Crystal Clear”. The
company’s water purification system is registered on the Department of Health and its products
have certification from Food and Drug Administration. It also has environmental permit to
operate, and business and registration permits issued by Pasig City government.
By the year 2003, various commendations were given to Crystal Clear by several prestigious
organizations. The National Consumers Affairs Foundation awarded Solerex for Most
Outstanding Water Technology System and Most Outstanding Purified Drinking Water Brand for
Crystal Clear. The Department of Trade and Industry (DTI) and Philippine Franchise Association
(PFA) granted the company a Franchise Excellence Award “Outstanding Filipino Franchise Hall
of Fame”. A lot more awards were given to both Solerex and Crystal Clear recognizing its
services and products excellence.

D. Business Location, Headquarter and Branches

Solerex Water Technologies Inc. is located in the Philippines with its head office situated
in Pasig City. Crystal Clear’s franchise network maintains over 500 water stores franchise
nationwide. It has also expanded internationally, with Indonesia acquiring the Master Franchise
of Crystal Clear Water Refilling Stations. After a few years, it has grown to Malaysia and
Singapore as well. Currently, it also has reached Africa, Saipan, Guam, Papua New Guinea and
Hong Kong.

E. Franchising Information
Crystal Clear Water currently has franchise fee of P100,000 while its projected total
investment ranges from P600,000 to P800,000. For franchise construction and site preferences
there are some guidelines to be followed. A proposed site ought to have a central avenue
facade, should be noticeable, and open space prerequisite is in any event 25 square meters.
The site should have households and workplaces that in any event not less than 300. Water
refilling stores rivalry should not be close by, and lastly have a sensibly valued raw water source
either neighborhood water utility or profound well.
 Crystal clear stores are intended to fulfill the guideline of the Department of Health. Just
after the store is fabricated, Crystal Clear Water Store will prepare it to set it up for the opening.
The plan and development of the station will be composed by the organization, with its licensed
workers for hire or even your own. There is a sure standard that should be trailed by each
franchisee so the consistency is kept up inside the whole establishment organization.
Owners of Crystal Clear franchises must attend and complete the training provided by
the company. It covers all aspects of store operations, including recruiting and managing
employees, accounting procedures, local marketing, and the framework for providing the
company's world-class customer service. The franchisee will also be guided by the company’s
franchise expert team during the first few days of the business.
The franchisee will receive ongoing assistance from the organization and the company
offers other factors such as customary visits to guarantee of the proficiency and execution,
updates on new item improvement, gear upgrades, store plan, limited time openings in addition
to other things, Publicizing, Local Promotions and Buying – the organization haggles with its
providers and ensures that the establishment store gets serious costs, great credit terms and
sensible least orders to accomplish ideal edges.

III. GLOBAL MARKET ANALYSIS

A. Company’s Trading Area

Indonesia is one of the countries in Southeast Asia, the country ranked fourth as the
most populous country in the world with a total population of 264 million and claim as Southeast
Asia largest economy. Indonesia is facing an issue on its water supply as 24 million of its
population lack safe water. As for its international trading policy, in accordance with the reviews
conducted by World Trade Organization, Indonesia's medium-term trade policy objectives are to
increase the export of non-oil products, strengthen the domestic market and manage the
availability of basic products; and to strengthen national distribution channels. Water falls under
the category of basic products that the country wants to increase in terms of its availability.
Crystal Clear, INC. expand its market in different countries including the country of Indonesia
through franchising, Rabana Group have seen the need for clean and safe water in the country
that’s why it avails the franchising offered by the Crystal Clear as it provides high quality
products and services with a justifiable franchise fee or cost.

B. Regional Trading Blocs

Crystal Clear was originated in the Philippines and later expanded with franchises
located in countries of Indonesia and Malaysia. These three countries were considered as Asia
tigers and are all members of Association of Southeast Asian Nations (ASEAN) Free Trade Area
(AFTA), the third largest trading bloc in the world. A trading bloc provide special deals for trading
for its members , thus promoting free trade by eliminating barriers to trade on all goods coming
from other members. Being a member of this trading bloc, poses a lot of advantages with it
comes to the economic sector of a nation. This ASEAN bloc has substantially cancelled all
import and export duty taxes on the traded items between the members. Furthermore, ASEAN
has entered into several free trade agreements with the other Asian Countries to further gain
advantage in trading and promote free flow of goods, services, investment and capital. As a
result of free trade, there was an increase competition in the market which is a driving force to
reduced prices and making it more affordable for consumers. Also, because of its cost benefit,
there are numerous investment opportunities between the members paving the way for
globalization. This is what the Crystal Clear Company did, where it first seize the opportunity to
go global by selling a franchise in Indonesia. Indonesia have a lot of potential for investment ,
for it was a growing power house in the region and has the largest GDP which stands at US$1
trillion, the largest in the region. Being stated, regional trading bloc provide assistance in doing
business. However, governance of nation members must still be observed for there are also
risk affiliated for being a member of a trading bloc such as there is a risk of influx of cheap
imports which may dominate the local markets and slowly crashed the local sector.

C. Economic and Political Environment

The largest economy in Southeast Asia, Indonesia has charted impressive economic
growth since overcoming the Asian financial crisis of the late 1990s. Today, Indonesia is the
world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing
power parity, and a member of the G-20. Furthermore, Indonesia has made enormous gains in
poverty reduction, cutting the poverty rate by more than half since 1999, to 9.78% in 2020. Prior
to the COVID-19 crisis, Indonesia was able to maintain consistent economic growth, recently
qualifying the country to reach upper middle income status. Considerable development
challenges remain in Indonesia. In addition, the global crisis caused by the COVID-19
pandemic brings unprecedented complications for Indonesia to achieve its development goals.
Between March and September 2020, official statistics reported an increase in the national
poverty rate from 9.78% to 10.19%, translating into an increase in the number of poor from
26.42 million to 27.55 million, out of a population of 270.2 million – turning back three years of
progress in poverty reduction. Furthermore, although Indonesia was able to reduce the stunting
rate to 27.7% in 2019, more remains to be done. Such efforts are critical to ensure Indonesia’s
strong and productive human capital. At the moment, according to the World Bank's Human
Capital Index, Indonesia's next generation will only be 54% as productive as it could have been
with full health and complete education. (World Bank, 2021) This country is among those
prosperous nations having high development. There had been constant growth in their
economy.

Indonesia’s economy is forecasted to contract by 1.0% this year amid the corona virus
disease (COVID-19) pandemic before rebounding to 5.3% growth in 2021, according to a new
report released by the Asian Development Bank (ADB) today. The Asian Development Outlook
(ADO) 2020 Update says the country’s economic recovery next year will be supported by the
global economy and domestic reforms boosting investments. The contraction in 2020, which
would be the first decline in the Indonesian economy since the Asian financial crisis of 1997–
1998, is against a backdrop of overall negative growth projections in developing Asia, including
Malaysia (-5.0%), the Philippines (-7.3%), and Thailand (-8.0%). The countries’ consumption
contracted in the first half of 2020, as households cut spending and businesses postponed
investments. Demand for the country’s exports shrank apace with lockdowns around the world.
The government responded by delivering wide-ranging policy responses to mitigate the impacts
of the pandemic, including income support for vulnerable households and workers,
improvements in health care, and economic relief to businesses. The report expects household
spending to remain low in the near term, with social restrictions imposed to control the spread of
the virus. As global and domestic demand stays weak in 2020, trade and investment activity will
remain subdued. But the report projects a swift recovery, with pent-up domestic demand lifting
the manufacturing purchasing managers’ index above the threshold of 50 in August. Confidence
should also rise as the government provides financing support for investment and business
operations. With weak domestic demand in the near term, the inflation forecast for Indonesia
this year is revised to an average of 2.0%, down from ADB’s April forecast of 3.0%. As
household and business spending recovers in 2021, inflation is expected to rise to 2.8%.
Meanwhile, the decline in capital goods imports has outpaced the contraction in tourism and
commodities export earnings, with the current account deficit now set to narrow to an equivalent
of 1.5% of gross domestic product in 2020. (Asian Development Bank, 2020)

With regards to their currency, the Indonesian rupiah was seen to be weakened. The
“debt burden sharing arrangement” between the Indonesian government and the central bank,
Bank Indonesia, involves the latter buying 397.6 trillion Indonesian rupiah ($26.97 billion) worth
of bonds. That debt, issued by the government, will help to finance a larger budget deficit
resulting from increased spending to fight the corona virus. But an increasing number of central
banks in emerging markets, including Indonesia, the Philippines and South Africa, have adopted
some form of quantitative easing or QE after their economies were hit hard in the pandemic.
Since Indonesia announced its version of the program last month, the rupiah has lost more than
2% of its value against the U.S. dollar as investors became worried that the move would expand
the monetary base and eventually result in a weaker currency. So far this 2020 the Indonesian
rupiah, currently termed as worst-performing Asian currency has weakened by around 6%
against the greenback. (Lee, 2020)

In terms of the flow of goods, Indonesia had a total export of 180,215,034.44 in

thousands of US$ and total imports of 188,711,171.62 in thousands of US$ leading to a
negative trade balance of -8,496,137.18 in thousands of US$. The Effectively Applied Tariff
Weighted Average (customs duty) for Indonesia is 2% and the Most Favored Nation (MFN)
Weighted Average tariff is 5.89%.The trade growth is 2.57% compared to a world growth of
3.50%. GDP of Indonesia is 1,042,173,300,600 in current US$. Indonesia services export is
28,002,536,921 in Balance of Payments (BoP), current US$ and services import is
35,070,666,252 in BoP, current US$. Indonesia exports of goods and services as percentage of
GDP is 20.97% and imports of goods and services as percentage of GDP is 22.06%. (World
Integrated Trade Solutions, n.d.). For the Indonesia Bottled Water Market, According to a study
reported by Mordor Intelligence, there is a projected Compounded Annual Growth Rate (CAGR)
of 16.15% during the forecast period. Factors such as changing customer preferences and
growing demand for clean and safe drinking water aid the exponential growth of the bottled
water market in Indonesia. Rising disposable income in the country is driving the market, thus,
enabling higher sales revenue for the market players.

Indonesia booked a trade surplus of US$2.09 billion in May, 2020 as imports fell steeper
than the export slump against the backdrop of social restrictions worldwide and supply chain
disruption, Statistics Indonesia (BPS) announced Monday. Exports plunged 28.95 percent year-
on-year (yoy) in May to $10.53 billion, the lowest since July 2016, due to falling exports of coal,
coffee, palm oil, as well as oil and gas, according to BPS data. Meanwhile, imports fell even
faster by 42.2 percent to $8.44 billion, the lowest since 2009, due to weak domestic demand for
consumer goods, raw materials and capital. From January to May, the country booked $64.46
billion in exports, a decrease of 5.96 percent, while imports amounted to $60.15 billion from
January to May, a 15.5 percent yoy decrease. Indonesia recorded a trade surplus of $4.31
billion during the first five months of the year, compared to a deficit of $2.68 billion in the same
period last year. Several countries, including China, the United States and Japan, among
others, remain Indonesia’s largest trading partners. Lockdowns and social distancing measures
associated with the corona virus pandemic have sapped global commerce and growth,
disrupted supply chains and closed factories and stores. Several regions in Indonesia have
implemented large-scale social restrictions (PSBB) to curb the spread of the virus, forcing
businesses to close and people to stay home. This has reined in consumer spending as people
are worried about job prospects and have become pessimistic about economic prospects,
according to a consumer confidence index survey published by Bank Indonesia on Friday. The
World Trade Organization (WTO) projected that global trade would shrink between 13 and 32
percent as the economic impact of the health crisis remained uncertain. The WTO has forecast
a rebound in the 2021 global goods trade of between 21 and 24 percent, depending largely on
the duration of the outbreak and the effectiveness of policy responses. (Akhlas, 2020)

D. Cultural and Ethical Environment

INDONESIA’S CULTURAL ENVIRONMENT

Figure 1. The image illustrated below shows the estimated score of Indonesia in the five
dimension of culture as developed by Geert Hofstede. (Hofstede Insights, 2020)

 Power distance
This dimension refers to the level of equality in authority that can be observed among
the people in a society and how much they embrace hierarchy. High power distance means that
people embraces hierarchy and believe that there exist a superior who have more authority.
Low power distance means that people are more likely to be treated equally regardless of the
position they hold. In Indonesia, it is estimated by the Hofstede Insight that the level of the
power distance is 78 which is relatively high. This indicates that hierarchy is valued by people in
an organization and it is important to properly address the people you are dealing with to
succeed with business deals. As they highly respect people with higher power, having personal
contacts or connections with them can also dictate to the success of business dealings. Power
in organizations is more likely to be centralized. Therefore, there members are most probably
dependent on the instructions of their leader as they believe that he/ she has the authority and
power to direct the organization.
 Individualism vs. Collectivism
This dimension refers to the level of interdependence that is within an organization. It
also refers on how the society values the worth of an individual versus the value of a group.
Indonesia’s score in this dimension was estimated to be 14 which means that they give more
likely to be on the side of collectivism. This can be observed with how they give prominence to
personal relationships and establishing good business relationships. Long-term relationship
based on trust and familiarity is significant when doing business in this country.
 Masculinity vs. Femininity
This dimension refers to the level of how society values traditional masculine attributes
like competition, achievement and success or the traditional feminine attributes like caring for
others and quality of life. The country’s score in this dimension was estimated at 46 on
masculinity. This score shows that people in this society perceive status and visible symbols to
be important as indicators of success. However, with this score, it also shows that they have a
femininity side which indicates that they value parity, camaraderie and quality in their working
lives.
 Uncertainty Avoidance
This dimension refers to the extent of a society’s tolerance of risk. It shows the level of
how they feel towards ambiguities or uncertainties of events. Indonesia’s score in this dimension
is estimated to be at 48 which show that they have low preference for uncertainty avoidance.
This reflects that can be hesitant in entering business operations that they perceive to have high
level of uncertainty. This is also depicted with their behaviour of having desire to maintain a
harmonious relationship in workplace and avoid uncertainties that can eventually lead to
confrontations.
 Time-Orientation
This dimension shows the level of preference for long-run or short-run orientations. With
Indonesia’s relatively high score of 62, it shows that they have high preference for long-term
commitments. This indicates their capability in adapting with traditions that varies depending on
changing conditions, to adapt traditions easily to changed conditions, a high inclination to save
and invest thriftiness and perseverance to attain favourable results.
INDONESIA’S ETHICAL ENVIRONMENT

 Communication
People of Indonesia tend to place a more attention to the body language and non-verbal
communication. They usually prefer high context and indirect style of communication. It is
important to be careful with choosing appropriate words and restrained from speaking directly
what’s in the mind.
 Consistency with business rule
 For businessmen who have establishes business relationship with Indonesian
businessmen, it is very essential to obey the business rules that has been initially set in the
agreement to reach the business goal. Consistency with what has been prepared and agreed
upon must be followed.
 Confidentiality and Loyalty
Like how organizations in other countries value confidentiality, members of organization
as well as business partners must keep the information delicate to company protected.
Maintaining the loyalty to the organization is an essential business ethics.
 Religion
As most of the people in Indonesia are Muslim, with approximately 90% of its total
population, religion is one of the important ethical factors that must be considered when entering
or doing business in this country.
 Respect for others
Respect is not limited to people with certain positions but instead, applicable to any
organizations of every society. As Indonesia’s economy has been emerging, business teams are
most likely to be composed of people from different nations that values different culture.
Regardless of these differences, respect should always be observed in order to reach ultimate
goals of the whole organization.
 Negotiation
Negotiating in every business plan is also an essential business ethics. When having
Indonesian business partners, discussion and negotiation of plans must always be done. This is
to make arrangements and agreements of business clear before it is actually executed.

E. Product Development and Global Marketing Strategies

Crystal clear proved its worth as a water provider by introducing itself as a cheaper and
healthier option for consumers. The key feature of their product is the utilization of the process
called “reverse osmosis” although they were not the ones who pioneered such a method, they
are probably the ones who did it better. Reverse Osmosis drinking water systems reduce
harmful contaminants and turn tap water into fresh, quality water. Its advantages include: High
effectively at removing contaminants, provides clean water On-demand, energy-efficient,
removes unwanted minerals, and results in better-tasting food.
Along with population growth, the demand for potable water has increased in the
Philippines and along with this is its price, The former mainstream water filtration methods used
by businesses in the country cost more and takes longer to produce, resulting in its
inaccessibility and the process of reverse osmosis, although already existing is not well
marketed. Crystal clear entered the market as the resort for this troubled industry and a more
convenient choice for common Filipino households who are already burdened by the growing
prices. With their name “crystal clear” to further emphasize a sense of security about the
cleanliness of their water for the consumers they succeeded in penetrating the industry and
gaining a portion of its market, leading to them being one of the top service provider of water
filtration in the Philippines
 Like the Philippines, Indonesia and Malaysia did not immediately utilize reverse osmosis
in their water filtration industry. As such, they also have experienced the same encumbrances
experienced by the Philippines from that choice. Crystal Clear saw an opportunity from this
scenario and pursued extending their franchises in those countries, introducing itself again as a
safer and cheaper substitute.
The turning point of Crystal Clear’s success as a business ironically is not because of
the water that is sold under their name but rather on how they acquire this water which is the
reverse osmosis process. This made franchising a better object to focus their eyes on rather
than manufacturing the product and selling it themselves, after all, water is a necessity that is
widely consumed, and given the situation, it would require more effort, cost, and risk if they were
going to carry all this burden when going with the business, therefore, it is the best choice to just
transfer the task of distribution to their franchisees so that they can focus on maintaining and
improving the quality of the product they provide to which in the first place is of most importance
for this kind of venture.

F. Intellectual Property Rights Protection

Solerex Water Technologies, Inc. has registered its brand name, logo, and tag line “All
drinking water should be ... Crystal Clear”. Based on the information available in the Intellectual
Property Office of the Philippines Trademark e-Gazette, Solerex has filed its registration on
October 13, 2009, and was approved on May 20, 2010. Trademarks have 10-year duration upon
the issuance of a certificate of registration, thus its trademark is expected to expire and be
renewed on May 20, 2020. However, currently, it is removed from the register in the IPO due to
its non-filing of the fifth DAU (Declaration of Actual Use).

G. Corporate Social Responsibility

Water is fundamental to human life and society that is why it is natural that this is
identified as a central issue for companies to manage responsibly through their Corporate
Social Responsibility (CSR) practices to the benefit of the local populations in which they
operate.
The Crystal Clear Purified Drinking Water of the Solerex Water Technology Inc. help the
people in terms of providing them an access to safe and quality water for their families and to
protect them from water-scarcity related diseases. Its advanced water treatment technology
enables to treat water collected from rain, wells, streams and other potential water sources and
make it more potable and safe to drink. Aside from these, the company did their fair share for
the improvement of the society and joined into several campaigns here in the Philippines. Some
of these are listed below:
1. “Kapit Bisig sa Ilog Pasig”

Along with other Philippine companies and organizations, it donated funds or facilities for
this campaign to be possible. It is a massive Pasig River cleanup that aims to revive the river in
seven years- a goal that has a clear intent, but more important, a definitive deadline.
2. “Mommy Milkshake Marathon”
 It is a 3K and 5K fun run in support of the campaign advocating “Breast is best” for the
celebration of Breastfeeding Month of August. Knowing fully well that hydration is essential to
the health of breastfeeding mothers, Crystal Clear Water joined this annual event by providing
water stations for all the participants and educating them on the fundamentals of hydration with
regard to breastfeeding.
3. Enhanced Community Quarantine

During this pandemic, the company has been working closely with various organizations
including Department of Health, Philippine Red Cross, and Kapuso Foundation by donating and
supplying them with bottles of purified drinking water for redistribution to frontliners and affected
citizens.

As the company extended its global market reach, its social responsibilities also widen.
Surely the Solerex Water Technology Inc. is still committed in providing the stakeholders in
compliance with its Corporate Social Responsibility programs in partnership with the local
government and/ororganizations in the different countries it operates with, especially with the
group’s chosen trading area of Indonesia, just like how it is committed in fulfilling its mission and
vision.Unfortunately, due to the limited information and resources, the social programs of the
company in Indonesia cannot be stated here specifically.

IV. CONCLUSION

In this analysis on the product and services offered by Solerex Water Technologies Inc.,
it was able to get a clear picture of the past and present and get into the presumptions about the
future of the product. The brand “Crystal Clear” has been sold successfully and has created a
good position and demand in the market in the past two decades. Facing the tight competition in
the water improvement industry, Crystal Clear fights by committing to innovation, equity, and
sustainability that establish radical differences with others.
Using proven technologies and utilizing its expertise and supplier channels in reverse
osmosis, water filtration, and purification systems, the company provide affordable purified
drinking water at a relatively low cost, made fresh daily. Crystal Clear surpasses the standards
of US-Grade Quality Bottled Water. It solidly settled itself as a competent and dependable
provider of water filtration, sterilization, and purification equipment as it extended its operations
internationally, arriving at an ever-increasing number of nations.
Finally, it should note that the company may have to face threats in the coming years,
including political threats, legislation threats, ongoing economic crisis, changing lifestyle of the
individuals, and more. If the company can overcome all these threats and deal with the
problems in an advanced manner, it can accomplish significant development in this
exceptionally globalized competitive world.
V. REFERENCES

6 Key Benefits Of Reverse Osmosis Water. American Home Water & Air. (2020, September
25). https://americanhomewater.com/6-key-benefits-of-reverse-osmosis-water/.

Akhlas, A. (2020, June 15). Indonesia's exports, imports nosedive in May as COVID-19
restrictions hit trade. Retrieved from The Jakarta Post
https://www.thejakartapost.com/amp/news/2020/06/15/indonesias-exports-imports-
nosedive-in-may-as-covid-19-restrictions-hit-trade.html

BB WTO Trade Policy Review: Indonesia . (2021). Retrieved 5 May 2021, from
https://www.intracen.org/BB-WTO-Trade-Policy-Review-Indonesia/

Communicaid Group Limited. (n.d.). Challenges of Doing Business in Indonesia. Communicaid.

Retrieved May 1, 2021, from https://www.communicaid.com/cross-cultural-
training/blog/challenges-of-doing business-in indonesia/#:%7E:text=Indonesian
%20society%20is%20very%20collectivist,placed%20above%20individ als%20or
%20business.

Crystal Clear | About Us. (2021). Crystal Clear. Retrieved April 8, 2021, from
https://crystalclear.com.ph/about-us/

Crystal clear (bottled water brand). (2021, January 10). Retrieved from
https://en.wikipedia.org/wiki/Crystal_Clear_(bottled_water_brand).

Crystal Clear |Franchise (n.d.). Crystal Clear. Retrieved April 9, 2021, from
https://crystalclear.com.ph/franchise/

Crystal Clear Joins Fun Run for Breastfeeders. (2011, October 18). Retrieved April 30, 2021,
from Philstar Global: https://www.philstar.com/lifestyle/health-and-
family/2011/10/18/738118/crystal-clear-joins-fun-run-breastfeeders
Cruz, P., Nieva, A., & Teodoro, R. (2016). Strategic Paper on Crystal Clear Water Store under
Solerex Water Technologies Inc. College of Business and Accountancy, Our Lady of
Fatima University.

Devonshire-Ellis, C. (2014, February). Understanding ASEAN’s Free Trade Agreements.

ASEAN BRIEFING. Retrieved from https://www.aseanbriefing.com/news/understanding-
aseans-free-trade-agreements/

Francorp Philippines. (2020, January 8). Success Stories. Retrieved April 9, 2021, from
https://www.francorp.com.ph/post/success-stories

Francorp Philippines. (2020, April 17). Crystal Clear. Retrieved April 9, 2021, from
https://www.francorp.com.ph/amp/crystal-clear

Fatmawati, Y. (2017, November 13). Business Ethics in Indonesia. FactsofIndonesia.com.

Retrieved from https://factsofindonesia.com/business-ethics-in-indonesia

Hofstede Insights. (2020, August 12). Country Comparison. Retrieved from

https://www.hofstede-insights.com/country-comparison/indonesia/

Indonesia Bottled Water Market - Growth, Trends, Covid-19 Impact, and Forecast, (n.d.).
Retrieved from Mordor Intelligence https://www.mordorintelligence.com/industry-
reports/indonesia-bottled-water-market-industry

Indonesia Trade Statistics, (n.d.). Retrieved from World Integrated Trade Solutions
https://wits.worldbank.org/CountryProfile/en/IDN

Indonesia’s Economy to Contract Amid Continuing Disruptions from COVID-19, (2020).

Retrieved from Asian Development bank https://www.adb.org/news/indonesia-s-
economy-contract-amid-continuing-disruptions-covid-19

Indonesia's Water Crisis - Indonesia's Water Problems In 2020 | Water.org. (2021). Retrieved 5
May 2021, from https://water.org/our-impact/where-we
work/indonesia/#:~:text=Indonesia's%20water%20and%20sanitation%20crisis&text=For
%20many%20households%2C%20water%20sources,access%20to%20improved
%20sanitation%20facilities

IPOPHL Philippine Trademark Database. (n.d.). Intellectual Property Office of the Philippines.
Retrieved April 26, 2021, from https://www3.wipo.int/branddb/ph/en/

J. (2014, June 26). Crystal Clear Franchise. Franchise Manila | Franchise Manila Is a Guide to
the Franchise Business in the Philippines. It Includes a Food Cart Franchise List and
Other Franchise Opportunities Available in the Country.
https://franchisemanila.com/2013/11/crystal-clear-franchise/

Jack, By, Entrepreneur, J. I., Jack, & Entrepreneur, J. I. (2014, June 26). Crystal Clear
Franchise. Retrieved from https://franchisemanila.com/2013/11/crystal-clear-franchise/

Lee, Y. (2020, August 20) Indonesia has a ‘surprising’ way to fund a larger government deficit
 — but its currency suffers. Retrieved from Consumer News and Business Channel
https://www.cnbc.com/2020/08/21/indonesian-rupiah-weakens-as-central-bank-partly-
funds-government-budget.html

Osorio, B. R. (2009, March 02). Save a River, Save a Race. Retrieved April 30, 2021, from
Philstar Global: https://www.philstar.com/lifestyle/business-life/2009/03/02/44428/lifestyle

Solerex Water Technologies Inc. (n.d). Retrieved April 9, 2021, from

https://www.jobstreet.com.ph/en/companies/508658-solerex-water-technologies-inc

The World Bank in Indonesia, (2021, April 6). Retrieved from World Bank
https://www.worldbank.org/en/country/indonesia/overview#:~:text=Today%2C
%20Indonesia%20is%20the%20world's,%2C%20to%209.78%25%20in%202020

Villar Group Donates Crystal Clear Water to UPLB and Tagaytay Health Office. (2020).
Retrieved from Inquirer.Net: https://www.business.inquirer.net/293837/villar-group-
donates-crystal-clear-water-to-uplb-and-tagaytay-health-office-in-support-of-covid-19-
fight

Whole House Reverse Osmosis.C rystal Clear Water. (2021, April 2). Retrieved from
https://crystalclear-systems.com/our-products/whole-house-reverse-osmosis/.

VI. APPENDIX (EXHIBITS)

FINANCIAL RATIO ANALYSIS OF CRYSTAL CLEAR IN 2016

Liquidity Ratio

Figure 2. CURRENT RATIO

Crystal Clear's current ratio, under Solerex Inc., indicates that ay year end 2014, current
assets covered current liabilities .94 times. This only means that a firm may have difficulty
meeting their current obligations. However, this do not indicate a critical problem.

Figure 3. QUICK OR ASSET TEST RATIO

The acid-test (quick ratio) is a much more rigorous test of a company's ability to meet its
short-term debts. Crystal Clear's quick ratio is .76 times which indicates that the company does
not have the liquid assets to pay their current liabilities and should be treated with caution. Also,
too much risk is being taken by not maintaining an appropriate buffer of liquid resources.
Leverage Ratio

Figure 4. DEBT TO TOTAL ASSET RATIO

In here, Crystal Clear's debt to total asset ratio is 78.13%. This means that 78.13% of
the company's assets are financed by the creditors and therefore, 21.87% are financed by the
owners. A high percentage indicates more leverage and more risk.

Figure 5. DEBT TO TOTAL EQUITY RATIO

Crystal Clear's debt to equity ratio is 357%. The ratio shows the amount of financing that
is provided by sources other than the stockholders. The highly the percentage, the more risky
for lenders to the company. It is also said to be geared (a company that has a large amount of
debt compared to its share capital).

Figure 6. LONG-TERM DEBT-TO-EQUITY RATIO

Crystal Clear's long term debt to equity ratio is 11.93%. This indicates that the greater a
company's leverage, the higher the ratio. Since the ratio is lower than 50%, this means that the
company is less risky because they have more equity and less long-term liabilities.

Figure 7. TIME-INTEREST EARNED RATIO

Crystal Clear's time-interested earned ratio is 1.53 times. This only means that Crystal
Clear company is able to meet its interest payments 1.53 times over.

Figure 8. INVENTORY TURNOVER RATIO

Inventory turnover of Crystal Clear is 7.45 times. Generally, this turnover is highly
preferred because it is a sign of efficient inventory management and profit for the company.

Figure 9. TOTAL ASSET TURNOVER RATIO

 Total Asset Turnover of Crystal Clear is 1.06 times. This only means
that the net sales of a company is higher than the average total assets for the year. In other
words, Crystal Clear is generating 1.06 peso of sales for every peso invested in assets.

Figure 10. FIXED ASSET TURNOVER RATIO

Crystal Clear's fixed asset turnover is 1.06 times. It measures a company's ability to
generate net sales from fixed-asset investments - specifically property, plant and equipment
(PPE) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has
been more effective in using the investment in fixed assets to generate revenues. This means
that the firm must invest more in their long-term assets.
 Figure 11. AVERAGE COLLECTION PERIOD
Crystal Clear's average collection period is very high, garnering a 130 days result. This only
means that having higher average collection period is an indicator of a few possible problems in
Crystal Clear. It may mean that the business needs better communication to their customers
regarding their debts and company's expectation for payment.

Profitability Ratio

Figure 12. GROSS PROFIT MARGIN

Crystal Clear's gross profit margin ratio is 28.32%. This only means that a gross profit margin
of 28.32% suggests that every 1 peso of sale costs the business P.7168 in terms of production
expenditure and generates P.2832 profit before accounting for any non-production costs. As a
general rule, lower the gross profit margin ratio of a business, the higher the sales volume that will
be required to maintain the overall profitability and vice versa.

Figure 13. OPERATING PROFIT MARGIN

Crystal Clear's operating margin ratio is 4.61%. A company’s operating margin often
determines how well the company can satisfy creditors and create value for shareholders by
generating operating cash flow. If Crystal Clear has a 4.61% in net sales they might have difficult
time covering its fixed costs if business declines this year.

Figure 14. NET PROFIT MARGIN

Net profit margin essentially measures the amount of each dollar of sales that a company
has left over after it pays all of its expenses. Crystal Clear's net profit margin for the year is 4.67%.
This means that the company makes .0467 cents of profit for each peso of sales. A high net profit
margin means a company is able to control its costs that buy goods and services at prices
significantly higher than it costs to produce or provide them.
 Figure 15. RETURN ON ASSETS

Crystal Clear's return on asset is 4.95%. It gives an idea as to how efficient management is
at using its assets to generate earnings. The higher the ROA number, the better, because the
company is earning more money on less investment. Crystal Clear should focus more on how to
make profit by doing less investment through

Figure 16. RETURN ON EQUITY

The return on equity ratio (ROE) measures how much the shareholders earned for their
investment in the company. Crystal Clear's return on equity is 4.95%. This means that the higher the
ratio percentage, the more efficient management is in utilizing its equity base and the better return is
to investors its assets.

Figure 17. EARNINGS PER SHARE

Earnings per share is a calculation that shows how profitable a company is on a shareholder
basis. Crystal Clear's earnings per share is 3.19. This means that if Crystal Clear distributed every
peso of income to its shareholders, each share would receive 3.19 pesos.

Growth Ratio
Sales 68,207,986
Net Income 3,186,078
Earnings per Share ₱ 3.19
Dividend per Share ₱ 5.17
Table 5. Growth Ratio

This table represents the summary of Crystal Clear's sales, net income, earnings per share
and dividends per share for the year ended 2014. The company got a high sales but because of its
huge expenses, the income for the year is only 3 million above. That is why, the shareholders will get
a 3.19 pesos earnings per share and 5.17 pesos dividends per share.
 Crystal Clear Franchise
The total franchise cost / investment is Php 550,000.00.
Site Selection:
 A proposed site should have a main street frontage, must be visible and accessible
 Store space requirement is a minimum of 25 square meters
 There should be ample park
 A market that's readily available to cater locally
 Must have households and offices of a minimum of 300
 Water refilling stores competition must not be closed by
 Must have an affordable priced raw water source either local water utility or deep well. If the
latter is chosen, it should be far-off from septic tanks.
The design and construction of the station will be coordinated by the company, with its accredited
contractors or perhaps your own. There's a specific standard that has to be followed by every
franchisee that the uniformity is maintained within the whole franchise network. Crystal Clear stores
are designed to fulfill the quality of the Department of Health. After the store is built, Crystal Clear
Water Store will equip it to organize it for the grand opening.
Crystal Clear Franchise owners are required to attend and complete the training the company will
provide. It addresses the store operations of all areas, hiring and managing staff, accounting
procedure, local marketing, and the system on how to deliver the outstanding customer service the
company is well renowned for. If the store is ready to open, a franchise expert team will be around to
guide and support the franchisee in the critical first few days of the store.
The company ensures that the franchisee receives on-going support in the following areas of
the business:
 Training and Human Resources
 Operations and Financial Accounting
 Marketing
Advantages:
 Regular visits to ensure of the efficiency and performance
 Updates on new product development, equipment enhancements, store design, promotional
opportunities among other things
 Advertising and Local Promotions
 Purchasing – the company negotiates with its suppliers and make sure that the franchise
store gets competitive prices, good credit terms and reasonable minimum orders to achieve
optimum margins.
What does it take to be awarded a Crystal Clear Franchise?
 The candidate must have a positive attitude in life
 Must have outgoing personality
 Must have excellent communication skills
 Must enjoy dealing with people and casual friendly conversations
 Confident and Self motivated
 The ability to work as a team member is crucial
 Most importantly, must meet the financial criteria
The ability to build sales, customer service relations, build – out costs, manage business cost, are all
important factors when it comes to the return on investment. The company recommends that you
consult your Accountant to have an overview of the franchise economics as to its relation to your
financial goals.
Contact Details
Websites: www.crystalclear.com.ph, www.ufranchiseasia.com/#!crystal-clear-franchise/czel
Facebook Page: www.facebook.com/Crystalclearpurifiedwater
Email: solerex@solerex.com.ph, asunsoler@solarex.com.ph
Phone No.: (02)642-4489
Fax No.: (02)642-3448
Address: 369 Dr. Sixto Antonio Avenue, Maybunga, Pasig City, Philippines
24