You are the owner of a utility company that supplies water to residents and businesses in an isolated town in South Africa. There are a handful of other utility companies in the area, and you compete aggressively with each other.

The only source of water is a single aquifera "lake" of underground waterwhich has provided water to the area for decades. In previous years, the local government has limited each company to 4 pumps in the aquifer. However, as both the population and the demand for water is increasing, the town is lifting these limitations.

Your pumps have been operating at capacity for quite some time now, so you are happy to hear the limits have been eliminated. This feels like a great opportunity to grow your business. However, given how competitive the industry is, you know that you will need to move quickly. Your objective is to be the most valuable utility company.

You will need to weigh all sorts of factors in determining how many pumps to buy and how much water to pump from the aquifer, including the cost of additional pumps and the quality of the water that you wish to provide. Filtered water is more costly to provide, but you can also charge a higher price for it.

What strategy will you pursue? What do you think is the key to becoming the most valuable utility company in the county?