global war on drugs or tuna
TRANSCRIPT
GLOBAL WAR ON DRUGS OR TUNA?
GLOBAL WAR ON DRUGS OR TUNA???
Snapshot
• Difference of opinion between the two competitors.
• Social boycott• Increase in transportation costs led to
reduction in exports• ATP Act angered ASEAN Members
1. Discuss the different environmental factors having an impact on the tuna processing industry.
2. How can international distribution strategy provide a competitive advantage? Which of the three market players has the best distribution strategy?
International Distribution Strategy
3. In what ways are international trade treaties having an impact on the tuna canning industry?
Tuna
• Lowering tariffs on Ecuadorian Tuna as part of an effort to revive ATP Act
• Reductions were intended to coax the Andean Countries out of the drugs business
• Resulted in a worldwide battle for and against tuna tariffs
Tuna Industry & the canning process
• Began in USA in 1903• Has spread to offshore areas due to low wages
and their proximity to fishing areas• Legislative activity by 1980’s to protect friendly
mammals• Increasing low cost imports led to closure• Eastern Pacific Region became a favored source
for tuna production• Shrinkage of the industry in the continental USA
Distribution of exports of canned tuna, January-November 2010.
Loining Technology
• Located near fishing docks• Subjected to a process of thawing, butchering and
precooking• Cleaning and separating red and white meat• Packed in water or oil, with or without salt• Loins are light, meaty, edible part of the fish• Weighs les than half of a whole fish• Results in reduction of freight costs• Accounts fro 60-80% of the cost of labor• Thus, Canning process gain a significant amount of
savings
MARKET LEADER- STARKIST
Fueling Life’s Everyday Adventures with Exceptional Seafood
Tuna Market Players- StarKist
• A leading producer, distributor and marketer of shelf-stable seafood products in the United States
• The first brand to introduce the StarKist Flavor Fresh Pouch; StarKist Tuna Creations, a line of lightly marinated tuna; and, a dolphin-safe policy
Distribution Strategy
• Locating close to the market • Operations in American Samoa and
Ecuador• Saves the cost of labor• Enjoying lower transportation costs
due to regional proximity to the market
Tuna Market Players- Bumble Bee
• Founded by a handful of dedicated canners back in 1899
• Employs over 1,000 hard working men and women
• Transformed its plants from labor intensive production lines to automated lines
• Assured it means premium quality seafood
Distribution Strategy
• Locating close to the market • Operations in American Samoa and
Ecuador• Saves the cost of labor• Enjoying lower transportation costs due to
regional proximity to the market
Tuna Market Players- Chicken of the sea
• Fishermen referred to the white albacore tuna as “Chicken of the Sea”
• Synonymous with health, nutrition and convenience
• Ensuring a healthy supply of seafood for future generations
• The protection of dolphin are imperative• Supports high standards of stewardship and
management
44%
23%
17%
16%
Market Share
StarKistBumbleBeeChicken of the seaOthers
ASEAN Members joining the battle
• Members face tariffs as high as 35% on Tuna exports
• Exports to US growing to 600% since lower transportation costs
• Low cost of labor in Ecuadorian Region
Proposal
• Lower Tariff Rate • Low Transportation Costs• Government participation in trade like
administrative guidance• Similar Tariff/ raise the tariff of import
THANK YOU