Analysis of the Business Environment and Strategy of Sealord Fishing Company Essay Example

health of the sea and the fish species.In the fishing industry there are many alliances and partnerships. Most of these partnerships are focused on improving the fishing industry. Sealord is a member of the DeepWater Group, who focuses on improving and monitoring fishing standards. They research the fish stocks and find way to reduce the by-catch of mammals. Their aim is to improve sustainable fishing.

Bargaining power of buyers Within New Zealand there are only 2 main suppliers to the supermarkets, namely Foodstuffs and Progressive Enterprises. This gives them a large amount of bargaining power.It means that if either one of them would decide not to buy Sealord products, the products would not be available in half of all the supermarkets. It also means that with this power the buyers have been able to keep the prices low for the end consumer. As most of the canned and frozen fish is fairly standardised end consumers are always able to find a similar product. It means for Sealord that their margins on the product will be at the low end of the spectrum.

Threat of substitute products or services Sealord offer quick, healthy and easy seafood. It has the most extensive range on offer.But there is a large threat of substitutes. Consumers are always on the lookout for a better, healthier, cheaper product. Recently canned chicken was introduced; this could potentially replace Sealord’s lunch items. A second threat is that of the fresh fish.

Sealord has no fresh seafood on offer and cannot compete with this product range. A last threat is that of the takeaway lunch or dinner. If consumers find a quick, healthy alternative

it could replace Sealord’s products. Rivalry among existing competitors The fishing industry is a very volatile business. There are many take-overs and mergers within the industry.

Within New Zealand the competition is very strong and currently there are 171 fishing companies registered. Many of these are small companies that are owner operated and will generally on sell their catch to the bigger companies without processing the fish themselves. Their biggest competitor is Sanford, a publicly registered company (Sanford, 2011). However Sanford does not process their fish but sells it via their own market in the Auckland Viaduct. On the other hand there is also a great deal of cooperation within the industry as they are all using the same natural resource.With this cooperation they ensure that the levels of fish are of a sustainable level.

On the level of the end product there is very intense rivalry without a lot of cooperation. Every seafood brand will try to be the preferred brand for its customers. Strategy Sealord sets itself apart from the competition by offering the most extensive range of products. Their strategy is to be the largest provider of seafood products in the New Zealand market. Business Model Sealord sells a broad line of highly standardised products. They catch and process the fish internally and on sell it to the 2 main grocery suppliers.

The customers of Sealord are on sellers to the end consumers in a general market. Sealord is part of an international alliance but operates on a national level with its brand. Sealord has a strong R&D and innovative competence. They are striving to become more sustainable every year.

They focus on quality

and safety and are always on the lookout for new ideas to improve their products and the safety of their people both on land as on the water. Sealord competitive strategy is to set themselves apart by the quality and selection of products they offer.They want to be seen by the customer as the most trusted seafood company. (Sealord, 2011) They do not offer the cheapest products, however they offer a complete range for every taste and associate themselves with exquisite food rather fast food.

They create brand loyalty by offering a community. On the website consumers are able to sign up and receive updates and recipes. They are also involved in community initiatives like “Swim for life”, making people aware of the dangers of the water and encouraging kids to learn to swim. On an economic level Sealord is in a very difficult business.Their margins are low and over the last few years their costs have risen more than their revenues (Aotearoa Fisheries Limited, 2010) Their volumes are high and a lot of their costs are fixed.

In 2009 Sealord invested heavily in their Nelson processing plant. The plant in Nelson has always been their main processing plant. The investment was mainly done to improve their crumbed fish department. This has led to an even more extensive range in the frozen fish department. However in 2011 Sealord has opted to make a great portion of their employees in both Nelson and Dunedin redundant.

Instead of processing their fish in New Zealand they will now process it in China. This is more economical than staying in New Zealand (3News, 2011) Sealord appears to be in a

subsistence model. They are supporting themselves but only at a minimum level. While still generating a profit for both its shareholders Sealord has seen a steady decline in the profits they are making over the years. This is partially due to the weak New Zealand dollar, the capital investments that were made and the increase of the global recession.

The latter has caused a steady decline in demand of the Sealord products.