value-chain innovation in the seafood sectordocs.business.auckland.ac.nz/doc/case-study-value... ·...

Value-Chain Innovation in the Seafood sector

Naga Meghna Karody Student ID # 3442189 28th February 2005

A research essay presented to the University of Auckland in partial fulfilment of

the requirements for the Degree of BCom (Hons) in information Systems and

Operations Management.


Abstract

The concept of value chain has been perceived to be a catalyst to identify and analyse

innovation in the seafood sector. Besides R&D and technology, market-orientation

has been found to be an important element of innovation in the value chain.

Innovation in the value chain of the seafood sector has been studied as a form of

conceptual research by analysing the literature from three perspectives: Firstly, by

examining innovation in the food industry as a whole, secondly by studying

innovation in seafood and related industries and finally by analysing innovation at

farming end of the industry. The analysis of which has brought about an

understanding of different facets of value-chain innovation both currently exploited

and potential. Thus, aspects for further research in value chain innovation have been

identified in the form of a set of questions to stimulate research in this arena.

2


Contents

1. Chapter 1 – Introduction…………………………………………………...4 2. Chapter 2 – Methodology………………………………………………….9 3. Chapter 3 – Literature Review……………………………………………13

a. Value Chain……………………………………………………….14 b. Product/Process innovation in the food industry…………………18

c. Innovation in seafood and related industries……………………..28

d. Innovation at farming end of the value chain…………………….38

4. Chapter 4 – Discussion…………………………………………………..45

5. Chapter 5 – Results………………………………………………………55

6. Chapter 6 – Conclusion………………………………………………….62

7. References……………………………………………………………….67

3


Chapter 1

Introduction

4


Aquaculture has been defined as the “science of raising fish or aquatic plants”,

(Querna, 2004). It has been a growing industry in the past quarter centaury (Eagle,

Naylor & Smith, 2003). In New Zealand alone it is estimated that in 20 years the

annual exports have tripled1. Most countries (Norway, Canada, New Zealand etc.)

have therefore undergone rapid changes in processes and management of fishing and

aquaculture especially due to the increased export markets2. Yet it is considered that

modern aquaculture is at an early stage of development but aquaculture production

has been booming, (Anonymous, 2003b). In fact the term blue revolution

(Anonymous, 2003b) is used to describe to the evolution of aquaculture. Aquaculture

provides the basis for the seafood industry as science catering specifically to the

sector.

Increasingly, value-addition is visualized as the means of growth in the primary

sectors, such as seafood and aquaculture, in New Zealand and rest of the world; in

lieu of harvesting and exporting more 'raw material’. Downstream innovation in the

value-chain is the focus of leading enterprises in these sectors with increasing role of

marketing. Authors such as Traill & Grunert (1997) state that in companies such as

Royal Greenland, “the need simultaneously to increase the number of new products

and adapt to specific market preferences as well as to add value to the raw material

requires strong development resources both in relation to product development and

production facilities”. Thus, to innovate and market the innovated produce and

possessing the required infrastructure and development resources are critical to

// 1 http://www.business.auckland.ac.nz/seafood/ 2 http://www.dfo-mpo.gc.ca/aquaculture/aquaculture.htm

5


innovation in value chain in the seafood sector for increased efficiency and

productivity.

“Innovations are considered to be crucial to business growth and even to the ability to

survive in the market”, (Traill & Grunert, 1997, Ch. 7). Traill & Grunert, (1998)

consider innovation to be the outcome of invention once commercialised. Firms have

to not just cater to the existing markets and out beat competitors but have to consider

expansion and increasing market share. Innovation is considered an important aspect

for a company’s growth. In fact, Fearne & Hughes, (2000), Harmsen et al (2000),

regard “innovation as the only long-term source of competitive advantage”. The main

aspect of innovation as Barrier (1994) states is that, “its value is in the continuing

vitality it can give to a business, by helping that business serve its customers better”.

Thus understanding the process of innovating successfully is vitally important, (Traill

& Grunert, 1998).

Interestingly authors have had varied opinions on innovation in the value chain; while

some authors have focussed on technology (Bradley et al, 1995) as the main driving

force others have stressed on the importance market orientation (Chaston, 1997 and

Traill & Grunert, 1997, etc) or integrating both. In fact firms are always trying to add

value and increase their market share. It is an accepted fact that they have to

constantly strive to not only just maintain their standards but also strive to provide

customers with something new and different – be it in terms of packaging, or just the

appearance to make the product more appealing or something as introducing a new

product or just changing internal processes which may not even have any impact on

6


the end customer; new product development, innovation or research and development

however it maybe known as.

The present research has been motivated from a recent New Zealand case study by

Sankaran (2004) on ‘Value-Chain Innovation in Aquaculture’ which is in turn based

on an ongoing FRST project “Determinants of innovation and growth in the sea food

sector” in which the author (J. Sankaran) is a co-investigator. Based on the above, the

main goal of this research is to stimulate innovation in the value-chain for seafood and

to develop a conceptualization of the literature relating to value-chain innovation and

integrate those findings into a template for further research. Especially, it is to

motivate the present research in New Zealand context and to develop a multi-

dimensional categorization and review of the available scholarly literature.

This research essay begins with a brief overview on Porter’s concept of value chain

and value chain analysis. Followed by the literature review based on the following

perspectives adapted from Sankaran, (2004):

Firstly the product and process innovation in the food industry has been analysed in

terms of understanding the aspects involved in innovation in the industry as a whole.

This helps analyse the seafood sector as a subset of the food industry.

Secondly, through the perspective of understanding the value chain in the seafood

sector, current literature on seafood and related industries has been analysed.

Finally by studying the innovation at farming end (of the industry), which helps

analyse the current stance of innovation in the seafood industry at the level of

management of aquaculture resources.

7


This research therefore aims at situating value-chain innovation against a broader

backcloth of value-chains to analyse the seafood industry. Thus, integrating the

insights from the literature review into a useful mechanism for further research (a list

of items as part of an academic research schedule) and mapping out relevant

directions for future research has been presented. Thus, this research aims to provide a

step towards understanding and creating interest (Hovgaard and Hansen, 2004) in the

seafood sector and furnish answers to the following questions which form the basis

for this research essay:

What are the various forms of value-chain innovation in the seafood industry?

(Sankaran, 2004)

What are the empirically observed aspects in the sea food industry?

What are the prospective areas for further research (academically and for the

industry)?

8


Chapter 2

Methodology

9


Considering the motivation of the study as mentioned in the earlier section. An

exploratory research technique has been adopted primarily focusing on the purpose of

the research, which is to gain insight into the innovation in the seafood sector. “In

exploratory research the focus is on gaining insights and familiarity with the subject

area for more rigorous investigation at a later stage”, (Collis & Hussey, 2003). In

terms of conducting a literature review on the value chain innovation in seafood

industry it was found that empirical data was limited (Sankaran, 2004) and hence in

line with FRST project since the main aim of this research is to contribute to

innovation in seafood industry [in New Zealand], a thorough literature review has

been done to serve as a base for future research.

This research focuses mostly on the process of innovation in the industry as opposed

to finding facts and causes and establishing theories. Hence a qualitative approach has

been adopted as “the approach to the research is usually very open and concentrates

on gathering a wide range of data and impressions”, (Collis & Hussey, 2003). More

over the aim of the research is to capture the (complex) phenomena (of innovation in

seafood industry) rather than to find a single measure, (Collis & Hussey, 2003) in

other words, “the research process is not oriented towards a final answer that limits

further research”, (Aarset, 1999). Hence it is this analytical perspective to research

objective that makes qualitative analysis more suitable in conducting research.

There has also been no deliberate attempt to define ‘innovation’. The literature review

thus has covered a wide range of authors with different perspectives and studying

different (but related to seafood) industries. This has led to a more open analysis and

drawing future research directions.

10


The research aims to identify and discuss most of the aspects of innovation in the

value chain from the literature under study. Thus, the main theme is to identify the

innovation aspects which in turn determines and reflects the (direct or indirect) value

chain activities of the industry involved in innovation.

However there are certain limitations to this research.

• Firstly, the ‘open analysis’ as discussed above does not necessarily bring

uniformity in discussion on innovation. It has been thus, assumed that

innovation includes all those aspects discussed by authors whose research has

been utilised to conduct review and an attempt to define innovation has not

been made.

• Moreover, this research is limited to a literature review, the aspects and issues

discussed include only that part of the information that has been obtained from

published sources.

• The 3 different perspectives which the literature review is based on do not

entirely focus on the seafood industry in totality. Studying the food industry

and related industries hence make the application of some issues less specific

to the seafood industry and the mechanism to draw parallel with these

industries is not necessarily suitable.

• Moreover even the literature based on the seafood sector was more specific to

a particular specie like salmon or catfish and literature based on the seafood or

aquaculture sector in its entirety was scant.

11


Thus, this is a conceptual research, which basically aims to add value to the seafood

sector in terms of innovation and research, by thoroughly evaluating and analysing the

literature and trying to identify the gaps that the current literature does not touch

upon. Moreover the future research directions (in the form of research questions)

which is takeaway of this research, is based on the, research findings of the literature

reviewed, analysis of this research essay, and based on the strategic aspects of the

industry, (Aarset 1999 pp. 184).

12


Chapter 3

Literature Review

13


Value chain

Porter (1985) defines ‘value’ as “value is the amount buyers are willing to pay for

what a firm provides them”. This includes not just the mass commodity type

products, but also the class of niche products for which the customers are willing to

pay a premium price. “Value is measured by total revenue, a reflection of the price a

firm’s product commands and the units its can sell”. Thus, the ability not just to

produce standard quality output to maximise revenue but also the ability to customise

and provide what the customer wants is an important aspect in today’s competitive

environment. Porter’s cost leadership strategy and differentiation strategy in other

words. Kippenberger, (1997) identifies the concept of value chain as a tool used to

diagnose and enhance competitive advantage. In this all the activities of the firm are

identified as value creating (of course assuming that the firm is only performing value

added activities). The value chain activities create interrelationships between different

actors in an industry.

The figure (1) below depicts the Value Chain of the Norwegian seafood industry

(Iversen, 2004), which consists of primary activities, support activities and margin.

14


Figure 1 (Iversen 2004)

“Primary activities are the activities involved in the physical creation of the product

and its sale and transfer to the buyer as well as after-sale assistance”, (Porter, 1985),

such as inbound logistics, operations, outbound logistics, marketing & sales and

service. The primary activities are considered as vital value-creating activities and can

differ for different firms depending on the nature of the industry.

“Support activities support the primary activities and each other”, (Porter, 1985), such

as firm infrastructure, human resource management, technology development and

procurement. This facilitates the primary activities and can prove as an area of cost

advantage. “Margin is the difference between total value and the collective costs of

performing the value activities”, (Kippenberger, 1999). In a value chain thus all

activities from production till the end process of distribution links are created among

the activities. “The value chain disaggregates a firm into its strategically relevant

activities in order to understand the behaviour of costs and the existing and the

potential sources of differentiation”, (Porter, 1985). Thus, Porter’s value chain is

about understanding these interdependencies and linkages among the activities and

15


not it’s complete disaggregation, (Kippenberger, 1999). Firms can thus identify

distinctly those activities that add value and make optimal decisions by identifying the

linkages between the different activities.

Value chain innovation

Fearne and Hughes, (2000), in terms of studying the factors driving ‘culture of

innovation and value creation’ identify that, innovation drives value creation.

Research and Development – (R&D), is usually seen as a value adding/creating

activity in the value chain. Kippenberger, (1999), defines value activities as activities

that are technologically and strategically distinct. Technology has thus definitely

become an important attribute in adding value to the existing activities. ‘Technology

development’ is usually seen as the tool to carry out innovation. Although innovation

itself or technology development for that matter can be either a primary or support

activity, Kippenberger, (1997) interestingly states that “Porter defines it (technology

development) is wider than R&D. It includes engineering and process development

and, while usually associated with an engineering or development function, is also

dispersed”. In fact Porter (1985) states that “R&D has a too narrow connotation to

most managers”, hence he uses the term technology development rather than R&D”.

Technology and innovation are so closely intertwined that perhaps it has led to this

association. Nowak (1997), views R&D as a trigger of quality and innovation

processes and as an innovation process it should involve widening some R&D

activities or processes throughout all elements of value chain in order to accumulate

knowledge and skills already developed in other components of the value chain and to

transfer it forward, towards commercialization, while Traill & Grunert (1997) view

R&D as just one of the several aspects for successful innovation. R&D and market

16


orientation and the way they co-ordinate, are regarded as major determinants of

innovation, (Traill & Grunert, 1997) instead.

Thus, Porter’s technology development – a support activity includes innovation

though it may not be necessarily be used synonymously. However for this research

innovation in value chain will not be restricted to any one of the above mentioned

definitions, as stated in the methodology section. In fact innovation in the seafood

industry in general will be studied thoroughly from different perspectives –

technological aspect, R&D aspect and others. Authors like, Bradley et al (1995)

divide innovation into five types: new products, new processes, new markets, and

changes in the law and changes in the methods of business organisation. Innovation

can thus occur in any part of the value chain and be performed by any actor involved

in the value chain. And hence any activity and actor in the value chain can incorporate

and benefit from such innovation. This research exactly aims to depict this very aspect

in the seafood industry – to study the different forms of innovation conducted in

different parts of the value chain and that’s what the term value chain innovation

represents in this context.

17


a. Product/Process development in Food Industry

One way of studying the literature in understanding innovation in seafood industry

can be by analysing the food industry as a whole and then to utilise this to study to

understand the seafood sector as a subset of the food industry. This section thus

reviews innovation aspects in the food industry.

The food industry is as such extensive but literature with regards to innovation in the

food industry is limited, (Traill & Grunert 1997). There are 2 different facets observed

in terms of empirical research (Harmsen et al, 2000, pp. 151) conducted. (1) While

authors such as Rudder et al, (2001), Harmsen et al (2000), focus primarily on the

importance of interaction between innovation and marketing in the food industry, (2)

others like Bradley, et al (1995) stress on the importance of advances in technology

which includes innovation itself, in the food industry.

Authors Trail & Grunert (1997) and Harmsen et al (2000) present two views on

innovation. They link innovation to technological change, and R&D as being the key

factor to technological change and the other being “market-orientation” i.e. in terms

of meeting the needs of the customers through innovation.

18


Innovation

Technological change Marketing skills

R&D skills

Figure 3

As depicted in figure 2 innovation interacts with technology and marketing, while

R&D though is a key factor to technological change, but “the R&D-marketing

coordination is crucial to achieve innovation success”, Gupta et al (1986) as cited in

Traill & Grunert, (1997). Thus, R&D through co-ordination with technology and

marketing contributes to innovation. Besides R&D is considered as a part of the

innovation process itself as stated in the 1980 Frascati Manual (OECD, 1981) as cited

in Harmsen et al (2000). However, Traill & Meulenberg, (2002), conducted 12 case

studies in the food industry, noticed that R&D and market orientation is not supported

in most cases even if there were really successful in terms of sales growth. But how

long firms can sustain this sales growth without R&D and marketing is unknown.

Grunert et al, (1997) thus propose ‘orientation’ that pervades organisations namely,

product orientation, process orientation and market orientation. And they state it is co-

ordination and balance between these orientations that is important. Especially since

the traditional theories of “demand-pull” versus “technology-push” are not

sufficiently representative of the food industry anymore, (Traill and Meulenberg,

2002). The role of retailers closer to the customers has become important and

19


innovation at this end indeed has gained considerable importance, as it is the point of

contact to customers “The modern view is that the food chain is increasingly

consumer and retailer led, rather than production led” (Traill & Grunert, 1997, Ch. 2).

This is primarily because of the focus on processes downstream that are closer to the

end product. And according to Guillotreau (2003) there has been a huge consolidation

witnessed at the retail end as a result of the structural changes within the seafood

value chain in Europe.

Innovation can include a vast list of new introductions – either a new product design

or maybe modifying the existing products, or maybe processes, but “product research

because of its importance is most researched type of innovation” (Hovgaard and

Hansen, 2004). Traill & Harmsen, (1997) consider process development and product

development to be linked. Indeed when there is a new product development either the

processes are also specially introduced or modified appropriately and vice versa. Like

in Brioche Pasquier (Traill & Grunert, 1997, Ch. 4), the company that sold pre-packed

pastry primarily focussed on process innovation, yet “process innovations demanded

complementary product innovation”. Traill & Meulenberg, (2002) consider the

private label suppliers being more process oriented and also produce large number of

new products though not necessarily considered as highly innovative. They also state

that in their study they found private label suppliers to be process oriented while co-

operatives more involved more in process innovation than product innovation. Also,

incremental innovations were found to be most common in the food industry as a

whole, (Grunert et al 1996, Ch. 7). Interestingly, though even though innovation is

considered a long term means to survival (Sankaran, 2004, Engle, 2003), the food

industry seems to be balancing the two.

20


In terms of private labels (as mentioned earlier), a lot of well-known food brands also

trade under private labels. “Supplying private-label products to multiple retailers is a

significant trend in the modern food industry”, state Traill & Grunert (1997, Ch. 14).

Interestingly companies like Tholstrup Cheese use ‘different production techniques’

for their private labels to maintain ‘distinctive profile’ of the company, (Traill &

Grunert, 1997, Ch. 3). While investigating the fresh produce industry Fearne &

Hughes, (2000), state that label products seem to have elevated the industry. It has

been studied that, product introductions for branded manufacturers are far more

expensive than for private-label suppliers, (Traill & Meulenberg, 2002), especially it

maybe because of the pressure to succeed and constantly appending to the list of

patents exists; it all in the brand name ultimately. Iversen (2004) states that “One way

to differentiate the products is to build a brand [another to base a product’s profile on

its’ origin]”. Especially, since “brand strategy is now considered to be a natural

complement to innovation” (Traill & Grunert, 1997, Ch. 3). On the contrary Traill &

Grunert (1997, Ch. 8) when studying Bulmer a British drink company state that “the

company does not patent any of its findings estimating that there is little to be gained

and much to be lost as it would tell everybody, especially competitors what Bulmer is

doing”, hence, adopting a concept of secrecy.

Product differentiation is thus an important aspect to the industry and from an

innovation perspective. Kinnucan et al, (2003) when studying aspects regarding

product differentiation, market integration and generic advertising, state that “product

differentiation is a condition in which similar products are perceived by the consumer

to be unique in at least one dimension of the spectrum of product attributes”. Good

21


example of product differentiation in aquaculture is salmon from Norway, which is

rated superior to others, while in France it is product labelling that is differentiating

factor, hence in Japan farmed salmon has increased market share at the cost of

Alaskan salmon. (Kinnucan et al, 2003). Interestingly, the mark up price for salmon

from Norway for Japanese market is more than the French market (though the cause is

not known if it is just price discrimination or product differentiation), (Guillotreau,

2004).

Food companies thus, have to constantly innovate and differentiate themselves and

not stagnate in producing the regular commodity-type products, which typically

involves production in high volume and products with low margins. Precisely, Fearne

& Hughes, (2000), state that “investing in product innovation (and processing

capacity to deliver them) is the only way in which fresh produce suppliers can break

out of the commodity trap”. Commodity type industries are usually considered to be

those that only compete on price. “However the shortening life-cycles and lead times

for introducing new products and new technology, which reduce entry barriers – the

process of commoditisation – keeps the market moving” Fearne & Hughes, (2000).

Maybe one of the ways some food manufacturing companies avoid this

‘commoditization’ is by evading larger markets and ‘deliberately following a niche

strategy’, but yet remaining innovative (Traill & Grunert, 1997). For example 50 %

of New Zealand King Salmon – NZKS, New Zealand based company that farms only

King Salmon, exports mainly to Japan, and almost the rest of it is consumed

domestically (Anonymous, 2001). However, Traill & Grunert, (2002) state that

companies involved in small national markets or domestic markets are less

innovative, apparently, though the industry itself is characterised to have a niche

22


nature as stated by Sankaran, (2004). This could be true as demand is concentrated in

some countries like Japan for salmon. Companies like NZKS which grow Chinook

salmon as opposed to Atlantic salmon, despite latter being easier to manage, do not

consider themselves to be in the ‘commodity business’ and instead focus on the

higher end, value-added sector, and hence following a niche strategy (Anonymous,

2001).

Trail & Grunert (1997), Harmsen et al (2000), Traill & Meulenberg (2002), also refer

to the food industry as being ‘low-tech’ industry primarily due to lowest R&D to sales

ratios which are relatively low in comparison to the other industries such as drugs,

electronics etc. They perceive that the food industry has low R&D intensity as the

technological innovations are imported from other industries. Yet usually in the food

industry there are high failure rates, as once again identified by Trail & Grunert

(1997) and Harmsen et al (2000). And even though the food industry as a whole may

account for being quite innovative i.e. they put large number of new products or

invest considerably in process development, their level of R&D is still notoriously

low, (Traill & Grunert, 1997). Grunert et al (1996), claim that in fact there is warning

against heavy investments in innovation and product development in the food sector

indicating differences in tastes and food customs which are slowly changing and

giving limited room for innovation. However things are changing now and “most

firms no longer rely on producing a stable range of traditional foods”, (Traill &

Grunert, 1997, Ch. 2) and avoiding in getting stuck perhaps in the ‘commodity trap’

as mentioned earlier.

23


The other facet of the food industry as mentioned earlier is technology. In terms of

technology, Bradley et al (1995) state “Technological advances have come to be

recognised as probably the most important source of improvement in the productivity

and competitive strength of companies.” Interestingly though in the poultry and dairy

industries seem to be better utilising their finances and grants for technological

purpose. Even Trail & Meulenberg, (2002), state even though traditionally termed as

low-tech food industry is now increasingly becoming more technology intensive.

Apparently they identify “diffusion” as one of the three distinctive stages in

technology transfer (the other two being invention and innovation).

Diffusion is defined as the “spread of new technique from one firm to another, where

both firms are in the same sector” (Bradley et al 1995). This is an interesting subject

where in technology ultimately gets shared and equates the companies in the

industries. This is what some firms refer to as the spill over. Technology transfer can

be from laboratories and research centres (which maybe managed by another firm) to

field technicians and through them or directly to the end users, mainly farmers and

entrepreneurs, (Pillay, 1994). When firms have partnerships with one another it is

possible they in turn have such partnerships with competitors as well. And when there

is research and innovation involved in such partnership it is but natural in some

relationships the firm may want to share it with other partners especially to make seek

returns on its investment. This is referred to as spill over. In fact, Wilson & Sankaran

(2001) state how the firms conveyed that concentration of one’s business with just

one other is not necessarily a good thing, even though the supplier maybe small a

monopoly situation is risky. Hence collaboration with more than one firm is but

natural. But the boundaries depend on the firm’s pact. Learning can spill over from

24


one firm in an industry to another, through mechanisms such as suppliers, consultants,

ex-employees, and reverse engineering of products. Where spill over of learning

among firms is high in a value activity, the rate of learning may stem more from total

industry learning than from the learning of one firm, (Porter, 1985). Asche et al

(1999) also point out when studying the Norwegian salmon industry that R&D never

proved a competitive advantage to salmon producers as because of the large R&D

costs the new innovations were on the market to other producers Therefore R&D was

dependent on private agents.

Interaction between R&D and Marketing and then technology alone in innovation has

been discussed. But marketing itself is an important medium in the industry. Harmsen

et al (2000) define, market orientation as a way of thinking in terms of customers and

markets and putting this thinking first: market competencies are knowledge and skills

concerned with market aspects, and finally manifest behaviour refers to the specific

activities carried out to collect, disseminate and respond to market information.

Rudder et al (2001) like Trail & Grunert (1997), when examining different new food

product development strategies, state that perhaps “the main motivation [for many

food processors] is that of the potential profits to be made from marketing and selling

successful products.” This could be especially because innovation as such is scarce in

the food industry and most innovations involve modifications of existing products and

are demand-driven innovations i.e. the innovation process had been triggered by

retailer demands or by consumer research as stated by Trail & Grunert (1997).

“Market orientation has become a widely-discussed concept in the food industry”,

(Grunert et al 1996). Especially since simply new product development and

innovation is not sufficient but the product has to cater to the requirements of the

25


market. Blois et al (2000) discuss about marketing channel structure. They say the

channel is short if manufacturers sell directly to customers and long if intermediaries

such as wholesalers etc exist.

“Market channels for aquaculture products are governed mainly by the nature of the

products, the end consumers and the characteristics of the farms”, (Pillay, 1994).

Marketing of aquaculture Pillay (1994) claims came into being mainly because of the

export markets especially for salmon and trout. Aquaculture he says has evolved to a

market-oriented production than production-oriented marketing. Changes occurring in

the marketing systems which are “the development of shorter marketing channels, the

development of integrated relationships and the increasing marketing disadvantages

of smaller producers, (Shaw in Heen, Monahan &Utter, 1993). Engle (2003) also

states that “market-oriented agribusiness approaches to catfish marketing are likely to

become the norm”.

Harmsen and Trail (1997), when studying the Royal Greenland A/S (featured in Trail

and Grunert, (1997) as one of the case studies presented for the product and process

innovation in the food industry) believe that the company under study had increased

emphasis on new product development to broaden the product base and strengthen the

sales and marketing activities. This shows that not only does marketing-orientation

trigger innovation but innovation such as product development influences sales and

marketing activities. Thus, undoubtedly though it is obvious that marketing is

essential in the whole innovation process in the food industry ‘marketing literature

pays more attention to non-technological aspects of innovation’. This could be due to

the fact that as per the tenets in marketing “R&D does not guarantee innovative

26


success”, (Trail & Grunert, 1997). Moreover, even though companies may not really

have new product development they can grow by ‘market development’, (Trail and

Meulenberg, 2002). Jim (1999) states how John Risley, the person who turned a tiny

shop into an international sea food giant, used the strategy of, applying technological

innovation to support relentless marketing strategy, and was successful.

But when it comes to analysing seafood on similar lines to that of food industry as a

whole, it can be a different gamut. Tverteras & Kvaloy (2003) state that the difference

between agricultural or other food sectors and salmon aquaculture (assuming salmon

aquaculture represents seafood sector) is that fish is generally more perishable, than

other kinds of meat. Salmon is mostly traded internationally and lastly it is expensive

to monitor external inputs in the production process in offshore aquaculture. Even

though. The main constraint for the fishing industry is one type of raw material

available for operation, (Chaston, 1997). Thus leaves a limited scope for innovation.

In seafood industry perhaps the distinguishing feature is the importance of farming

and processing, in comparison to others. These 2 segments are intertwined as opposed

to other industries for example the beef industry where rearing is isolated (in

comparison to sea food) to that of the slaughterhouses, (Nielsen and Jeppesen, 2001).

Thus, the above section provided a review on the different aspects discussed in

literature in relation to innovation in the seafood sector: the main essence being

interaction between technological development – a support activity and marketing and

sales – a primary activity leading to product and process development through

attributes such as private labels, product differentiation, niche strategy and diffusion.

27


b. Innovation in seafood and related industries

This section reviews innovation in the value chains of seafood and related industries.

‘Related industries’, here includes industries that have some feature in common to the

seafood industry, which may or may not belong to the food industry. Related

industries could be industries such as wine, poultry and others, which require

considerable amount of time to mature or farm before it is ready for consumption or

perhaps dealing with easily perishable products like in the Dutch flower industry.

Seafood industry is characterised by both time involved in harvesting and easily

perishable quality. Similarly, analysis of other products in the Primary industry (along

with seafood) such as Forest products etc. allows us to analyse the seafood industry

by borrowing aspects from other industries. In fact Hovgaard & Hansen, (2004), in

their study confirm that “part of being innovative is looking at other industries and

innovatively applying what those industries do well”. And hence this would definitely

benefit studying innovation in seafood value chain.

The seafood industry is a globally competitive industry. Iversen (2004) in terms of

studying the innovation in terms of changes that take place due to globalisation in the

Norwegian Sea food industry determines that Globalisation has its threats, challenges

and opportunities the globalisation is taking place both in the input and output market

of the seafood industry. Even, Guillotreau (2003) when examining the large-scale

technological change in the European seafood industry finds globalisation as an

important factor influencing the sector. This has undoubtedly led to a whole lot of

advantages such as cost reduction, increase in output and one important aspect is that

it has led to, is the restructuring of the supply chain as a whole, through vertical

28


integration, alliances, partnerships etc. In fact Kvaloy & Tveteras, (2003) state that

“vertical coordination and integration in the salmon supply chain have been caused by

technological and information characteristics of production and distribution processes,

both upstream in farming and downstream in retailing”. And as stated in Sankaran

(2004) to adopt a vertical integration strategy is one of the reasons why NZKS – the

company under study focussed on one specie – King Salmon (besides of course

differentiating strategy). According to Kvaloy and Tveteras, (2003), even though

“transition towards increased vertical integration has been driven by the firms

upstream and there has been tighter vertical integration in the salmon supply chain”.

Iversen (2004) refers to these as “developments affecting the competitive environment

of the sea food industry”. Hence, innovation to the existing products and the processes

benefiting the seafood industry has undoubtedly seen a lot of progress. In a study

conducted by Sea Grant3, the US sea food industry, regards ensuring food safety,

ensuring sea food quality, improving processing technology, adding value and

expanding supplies and markets as important aspects to attend to in the global

competitive environment. Thus, indicating the vast expanse of attributes involved due

globalisation.

Kvaloy & Tveteras, (2003) also state that horizontal integration has been witnessed

with a lot of mergers and acquisitions in the Norwegian salmon supply chain. Such

consolidation has led to large organisations, with high capital requirements,

sophisticated technology investments etc. However, in contrast Iversen, (2004)

specifically referring to the seafood industry, feels that perhaps that the value chain

// 3 www.SGA.seagrant.org/ThemeTeams

29


has become more wide spread and distributed in terms of the actors in the value chain

becoming larger and access to value chain getting restricted. Perhaps to which

alliances and collaboration can be one of the solutions, as discussed in the later part of

this section.

In terms of effects of globalisation on the competitive environment, firms either do

best at what they are good at – maybe for example focus on cost reduction or try to

expand by entering different markets and countries, whatever maybe the strategy,

infrastructure is a key requirement for the industry today. Iversen (2004) stresses the

importance of infrastructure for aquaculture, such as having veterinary services,

transportation, slaughtering etc. He believes that starting from the scratch can be a

cumbersome affair and in such cases, companies have no choice but to either expand

or get into alliance and collaborate with other firms. This maybe especially true for

smaller companies, which cannot easily invest in infrastructure, as the seafood

industry, has become more consolidated due to changes in supply chain and less

fragmented. Even Engle (2003) states even for new industries like that of catfish

development of infrastructure for smooth flow of product through market channels is

essential. The firm also has to build the internal structure as a network with frequent

interaction between levels and value chain parts, (Borch, 1998 pp. 25).

Globalisation and changes in the supply chain have perhaps brought about one other

aspect – brand names. Whether it is through private labels, or well-known

international ones, brand names can command a premium price. Though the industry

is comparatively young and is still establishing “brand consciousness” in customers.

Nielsen & Jeppesen, (2001) state, that it is perhaps brand consciousness that has led to

new product development thus linking marketing and innovation. According to Aarset

30


(1999) brand names allow industry to take advantage of diverse market-segments.

Moreover it can be specifically an advantage to establish niche market segments.

Interestingly Charles and Paquotte, (1998), point out that in the oyster industry in

France almost three quarters of the labels under study were associated with their

geographic origin. In fact even distributors gave priority to quality by linking product

to its geographical origin rather than mere production process. As mentioned earlier

by Iversen (2004) that another way to differentiate products is to base a product’s

profile on its origin. Example ‘fish from the Arctic’ (Iversen, 2004). Interestingly,

another means of branding could be based on quality. Charles & Paquotte, (1998)

state that one of the means to enlarge the market for oysters and mussels is to

introduce grading like “green”, or top grade quality, certification of origin and quality

etc.

But there is also downside to this. Charles & Paquotte, (1998) state that in their study,

market share of labelled products for oysters and mussels are weaker than in wine,

cheese and poultry. Indicating that the seafood industry is comparatively young and

concept of brand strategy is still growing. Over time when maximum product/process

development has taken place Iversen (2004) states the branded products turn into

commodity type products ultimately. Indicating that innovation in value chain is

inevitable as there is a saturation point for every brand or product. Especially in terms

of differentiation strategy if a firm is looking for premium priced product if “more

producers start supplying these specialised products, they are no longer so special”,

(Iversen, 2004). However in terms of the salmon industry Aarset (1999) interestingly

mentions at the time in Norway when the industry was expanding salmon was losing

its status as an exclusive commodity. So even with expansion of industry the

31


exclusivity of the product can be lost. This is of course not just a limitation associated

with seafood industry.

Considering limitations of the seafood industry, like any other industry it has its set of

limitations, such as seasonality, limited availability of raw material or just unstable

supply (Kvaloy & Tveteras, 2003, and Iversen (2004). Especially since carnivorous

fish like salmon also is fed with fish, it puts pressure on marine life, (Anonymous,

2003b). However, Iversen (2004) states there are two advantages that occur with this

limitation. One, he states this limitation leads to different strategic responses being

employed by the actors in the value chain. As the limitations stated above constitute

the very nature, hence actors are forced to adapt to this very characteristic of the

industry itself. This is actually also supported by Dreyer (1998) who remarks that

“firms that achieve sustained competitive advantage in the fish processing industry

have developed different types of flexibility in response to different factors of

uncertainty”. Secondly according to him this proves as an advantage especially for

farmed fish, “farmed fish can be harvested by market demand” so for species such as

salmon uncertainty is considerably reduced (Iversen, 2004). It would also be

interesting to mention extending the first point on the aspect of different strategic

responses that a firm can employ are: Lowering costs; Obtaining a price premium:

branded goods and regionalised markets; Organisation of production – global

distribution systems; Markets and trade regulation and finally Local embeddedness in

a globalised world, (Iversen, 2004). These responsive actions create, predictability

and control over the other parts of the value chain which are critical for success,

(Borch, 1998, pp. 23). To meet market demands and existing competition firms have

to be therefore flexible in every part of the value chain, (Borch, 1998 pp 23). Hence,

according to Borch (1998) the firm under study that’s why outsourced the primary

32


value chain and administrative levels and was successful. Especially external resource

links were created simple networks for the primary value chain.

Interestingly as Bryce Gilchrist4 points out for the salmon company New Zealand

King Salmon - NZKS, even though it takes two years to grow the fish, planning

decisions have to be real quick as they are dealing with fresh products. And this they

are able to cope with implementation of technology for planning. NZKS has in fact

concrete e-business plans to integrate online business with the supply chain. This

strongly indicates that limitations actually create opportunities for new process (and

product) development.

Thus, we see that firms in this industry either have to live with their limitations and

just do best what they are good at or be highly innovative and work around their

limitations. Blois et al (2000) state that any (business) network has to operate in an

integrated fashion and one of the reasons is because they may have to handle product

in a consistent way so that it reaches the consumer in the best condition [especially in

relation to fresh foods]. However not all firms can overcome their limitations as easily

- size of the firm can be an important influence on the firm’s capacity to innovate. In

general it seems very obvious that larger the firm, more the resources it has and hence

higher innovation capability. In fact Bradley et al (1995) state in their study,

“preliminary analysis indicated that the average number of innovations introduced

increased with the firm size”. But Traill & Grunert, (1997) when studying the

company Tholstrup Cheese, state there is no major difference; however it is an

advantage in terms of being small and innovative. Shaw & Gibbs (1996) also state

that the advantage of large farm size for fresh produce like fruits and vegetables is

// 4 www.istart.co.nz 2002

33


they can have their own marketing. Hovgaard & Hansen, (2004) also agree that for

small firms it’s difficult to handle innovation themselves. Yet, as Borch, (1998) states

that for smaller firms it is undoubtedly always a challenging task. They have to be

flexible, low cost bearing yet have an innovative setting. Especially there is pressure

in the salmon industry catering to fresh fish consumers and smoking industry. “The

advice usually given to small firms with larger competitors in the same sector is to

seek specialist market niches where they can cater for the special needs of small

market segments, avoiding head-on competition with larger companies” and

constantly restructure to replicate the larger firms, (Shaw in Heen, Monahan & Utter,

1993).

Hence, collaborative management is the next major frontier for improving process of

product innovation and development, (Anonymous, 2003a). Partnerships and alliances

help firms a great deal to innovate and conduct R&D in a stable environment and also

sharing the risks and establishment burden at the same time. “The drivers behind this

move toward collaboration are typically centred on faster time-to-market and

improved innovation – not cost reduction. Innovation is the primary motivator for co-

development in large companies and faster time-to-market is the primary motivator

for small companies” (Anonymous, 2003a). Thus, through partnering small and large

firms gain. Bowonder et al (2003) – when studying Dr Reddy labs, a pharmaceutical

company which carries out extensive R&D, state that “this has been achieved through

building internal competencies and through leveraging strategic alliances, supported

by competition monitoring and analysis of market dynamics”. Shaw, (as cited in

Heen, Monahan & Utter, 1993 pp. 270) also states that working relationships has its

advantages. Trends have been observed even in the Norwegian industry where closer

34


co-ordinated and planned relationships are developed especially between salmon

farmers and exporters. This in turn creates a competitive advantage, and as stated by

Kippenberger, (1997) earlier that this serves as tool for value chain innovation. Borch

(1998) interestingly states that one of the ways through which the Norwegian firm

under study was successful in a short period in terms of “reduced uncertainty as to

contract and know how both upstream to the suppliers and downstream to the market

[was] through strengthening the links toward cooperative relations”, thus, creating a

win-win situation through strategic alliances.

However, collaboration and exporting products for further processing is not easy for

all firms. For example the pelagic species as Iversen (2004) points out has low value

per kilo, and most primary processing takes place close to the farming end. It is

impractical to outsource any primary processing because of this. However, a company

in another industry has turned this into an advantage. The Dutch flower industry

“innovated at every step in the value chain, creating technologies and highly

specialised inputs that enhance resource productivity and offset the country’s natural

disadvantages”, (Anonymous, 1995). Despite the land and climate proving a

disadvantage they have used high-tech greenhouse cultivation and have thus

overcome the disadvantage.

Innovation has been influenced by collaboration, brand strategy, strategic responses

etc. as discussed, which in turn have been affected by globalisation. There is one other

attribute which has been affected and that is - price. Price is an important determinant

for a product. Activities in the value chain integrate with market forces in pricing a

product. There is always a distinction between low cost – standardised commodity

35


and premium priced quality products. Iversen (2004) states that in terms of strategies,

firms (in Norway) would need to use ‘technological development’ to lower the costs

or alternatively is “to charge a price premium, differentiated goods must be offered”.

In fact in Norway there exists a system of setting a minimum selling price, which is

mandatory to stabilize prices, (Heen, Monahan & Utter, 1993). According to Charles

& Paquotte, (1998) when the industry relies basically on balancing supply and

demand the producers mostly are the price takers since fresh products are more

important in this industry than frozen or chilled, industrialisation of the process is

hence also quite less and this can lead to limited innovation. On similar lines

Guillotreau (2003) states that price volatility can be high for fresh fish than processed

fish, as the latter has more stable supply. Interestingly, Charles & Paquotte, (1998)

state that since the demand of oysters is variable, as they are not considered as a main

component of a meal and it is priced high. This has led to a decrease in price of

alternative substitutes such as smoked salmon or salmon-trout in some markets,

(Guillotreau, 2003). So this shows how technology can be deployed to overcome

limitations, which in turn influences the price.

“Aquaculture has brought two crucial changes to the seafood industry: consistency of

supply and lower prices”, (Anonymous, 2003b), yet it is observed that in comparison

to other animal products like poultry, beef – seafood prices have actually plummeted

owing to the increase demand and shortage in supply, (Anonymous, 2003b).

However, Heen, Monahan & Utter (1993) state that “Changing demand conditions

lead to rapid price adjustment and individual farmers do not have scope for producing

sufficiently different products from those of their competitors to protect themselves

from adverse general fluctuations in trading conditions”.

36


But of course price is not the only determinant. “Market orientation thus means

market oriented value adding. Price information has a role in this, but it is clearly not

enough” Grunert et al (2004). Charles & Paquotte, (1998) state that in their study

“molluscs enter a market where the products are evaluated by the consumers not only

according to the price but also to different aspects like convenience or the image”

(Charles & Paquotte, 1998). Even according to Orr (1999) quality is the important

competitive priority for wine producers followed by product costs. However, “the

competitive priority of rate of innovation, although also likely to be influenced by

technology, was found to be much less important”, (Orr 1999). Wilson & Sankaran

(2001) when studying the importance of supplier partnering also state that

relationships are not just based on price but also on performance. It is important what

a supplier can actually deliver. This also encourages the firms to collaborate even

further; of course the relationship between firms, especially, the retailer and

downstream firms has to be mutually beneficial.

Thus, “Access to resources, and how this may change in a globalising world, is a

major driver of strategy in the seafood industry”, (Iversen, 2004). From this

perspective globalisation and innovations and its impact as seen whether on price,

infrastructure or collaborations, which seem to be responsible for the changing facets

of the seafood industry. Finally, like in any other industry, seafood sector has to

balance. Bowonder et al (2003) state the strategy of DRL (the firm under study) has

“been to drive synergy through leveraging its brands, distribution networks,

manufacturing infrastructure and regulatory compliance”.

37


c. Innovation at farming end

Innovation at farming end can be another means of studying innovation in the value

chain. This section analyses that part of the value chain that is involved with the

actual fish farming. Innovation is commonly known to be market-driven. Definitely

with the retailer being the point of contact to the customer as mentioned,, their

(retailer’s) perception on being innovative or innovation is considerably important but

innovation at farming end can be perceived as ‘innovation at source’, which is an

important part of the value chain. As innovation done downstream (retailers’ end)

technically definitely should have an impact upstream (farming end). An upstream

member provides the raw materials or finished goods that are put into the business

process, while a downstream member consumes the output, (Craig, 2000). Moreover

with increasing emphasis on raw material supply of innovation at farming end is

exactly what is needed. This section thus examines the current progress of the

industry in this section of the value chain.

“Aquaculture which has grown rapidly over the last decades has provided the

possibility of a much higher degree of control with the timing, quantity and quality of

raw product supply than conventional fisheries”, (Kvaloy & Tveteras, 2003) thus

encouraging research at the farming end. Innovation at the farming end could include

either a simple process improvement or major changes like implementation of

sophisticated technology or major changes in processing or farming of the raw

materials itself. However, freshness is the basic quality of farmed products, (Pillay

1994) and due to this very characteristic, it is perceived that innovation in production

- at farming end becomes all the more important. Asche et al (1999) state that the

38


aquaculture industry is different from any other industry especially “since salmon

farmers are affected more directly by their own production activities than producers in

other industries”. Production in the seafood industry thus requires farming to be done

with considerable care, Asche et al (1999) state that especially due to the close

interaction between aquaculture production and the environment, several factors can

be out of the control of the farmer.

The most important emphasis of innovation at the farming end has found to be on

costs. Traill & Grunert, (1997, Ch. 3&4) state that in the food industry downstream

flows command upstream flows, and downstream it mainly relies on its products

being so good that consumers will want them, while upstream it relies on the

motivating power of a good price. Aarset, (1999) also states that ‘production method

ensures profitability’. This shows that as a standard business, the upstream end

focuses on reducing costs and considering the limitation of supply of raw material,

firms are induced to innovate to either increase supply or improvise by reducing costs

of the existing processes and products involved. Pillay (1994) also states that

production technologies may have to be altered to reduce production costs. As

production processes usually depend on productivity (Asche et al 1999) perhaps theer

is emphasis on costs.

Trail & Grunert (1997) consider the food industry to be a major ‘carrier’ industry’, as

it uses the new technologies developed in the upstream high-tech industries,

downstream. However, Koku (1998) states “upstream industries play a vital role in

innovations for commodity type industries”. This holds good in terms of the emphasis

on costs at the framing end as discussed above, as all commodity type products –

39


focus on reducing costs and hence focus on the price of end product to be competitive.

In fact the niche products also differentiate themselves based on costs. Koku (1998)

states that downstream industries like retailers play important role in commodity type

because not much differentiation is required and marketing becomes all the more

important, but for niche products it is not so. Hence, innovation at farming end

becomes all the more important for niche products. Also, market-orientation is more

focussed at the downstream, as a downstream-primary-activity that supports the

upstream activities such as production methods. Thus, downstream and upstream

innovation can be seen as mutually dependent, especially the downstream-innovation

triggers innovation upstream by generating market intelligence for upstream

innovation. In fact Trail & Grunert (1997) state that there are feedback effects

between “downstream and upstream phases of innovation” which keeps the process

going.

Aarset (1999) in terms of studying the Norwegian salmon and Arctic char, adds that

its quite a paradox that while arctic char has had many advantages as farmed species

yet it has not been a source of industrial development’. This could be either because it

was considered a niche product it was ignored as opposed to more commoditized

products. Or simply because of the fragmented farming end of the industry, industrial

development received a set back and production side did not improve, thus,

emphasising the integration of research and industrial activities. However in his study

Aarset, (1999) states that “lack of orientation of research activity” and the fact that the

“industry was unable to communicate their needs to the research system” were the

main reasons for the setback of this farmed species.

40


Engle (2003) examines Catfish - the leading aquaculture industry in the US in which

new product development, market development and infrastructure development are

still part of the growing industry and relates costs more to be a barrier to entry. She

states that “Managing the levels of investment and operating capital required in

catfish farming adds to the complexity of the catfish business” (Engle 2003). With

increasing innovation and use of sophisticated technology etc capital requirements at

the farming end are rising. Asche et al (1999) draw our attention to the fact that

incentive to invest is not the only issue in terms of bolstering the innovation activities.

Specialised technical expertise, capital and risks are some major issues as well.

According to Kvaloy & Tveteras, (2003) with regards to salmon farming state,

increasing capital requirements and risks and need for economies of scale has led to

horizontal integration at farming end especially with exit of smaller farm owners.

There are a number of issues at the farming end. Especially as the Norwegian salmon

aquaculture industry has been characterised by large number of small independent

farm operations it has precluded private R&D [on feed and fish diseases], (Asche et

al, 1999). This is again as was mentioned earlier when discussing about size of the

firms in the food industry, that larger firms have greater risk because of the pressure

to innovate and innovate successfully. Another issue is maintaining quality of the

products. Engle (2003) refers to the fish rejected by plants due to being “off-flavour”

and states that due to this comparatively productivity has not increased as rapidly and

production cost has hence risen. Even Asche et al (1999) discuss the environmental

problems relating to salmon aquaculture, especially problems being identified at the

production end of the farms. The lack of internalisation of the environmental effects

(due to relationship between the environment and productivity) and lack of treatment

41


of diseases seem to be the main problems (Asche, et al, 1999, pp. 19). Engle, (2003)

also states in terms of knowing the ‘accurate inventory or handling volume of data

involved’ have great scope for process improvement. The farmers according to the

research literally erase records to adjust inventory records.

But constant innovative activities (research and development) are slowly trying to

offset the problems. For example, Sealords in New Zealand was the first to acquire

organic certification for its mussel farms, (Donoghue, 2004). The interest in the

product since than has considerably increased worldwide. Besides as Aarset (1999)

states salmon-farming research is goal-directed and hence has been successful, he also

states that “organised aquaculture research” has played significant part in the success

of Norwegian salmon farming. Similarly the aquaculture industry has to be goal and

research oriented at a larger scale. Traill & Meulenberg (2002) also state the

importance of having clear orientation to determine their strategies and direct the

process of competence formation.

In terms of analysing the innovation at the farming end it is also interesting to know

the kind of product developments that take place at the farming end. Asche et al

(1999) indicate that “both the feed and feeding technologies have reduced potential

problems, partly because the innovations primarily targeted productivity were good

for the environment”. They also specify the occurrence of diseases in the aquaculture,

which also significantly demands for the introduction of new improved medication for

the fish. “Antibiotics were mixed into all the feed as a kind of insurance”, (Asche et

al, 1999) they state. Besides other health problems like ‘salmon lice” etc. also demand

attention. Once again it is not needless to say that with limited supply quality at

42


source becomes all the more important. Aarset (1999) states that the best example of

“an effective applied research effort within aquaculture is probably the development

of effective vaccines”. Besides new feeding technologies and net-pen technologies

also have reduced potential problems according to them, “research on fish feed and

breeding technology has resulted in improved growth”, (Aarset, 1999). Even due to

the general technological advances in the industry the yield has increased over the

years, (Engle, 2003). Interestingly while aquaculture on one hand can be low-

intensive catering to small markets especially in developing countries – it is the

modern aquaculture that involves specialised conditions and a great deal of

knowledge (Anonymous, 2003b). With genetic modification a lot of development is

yet to happen and be witnessed.

Management of aquaculture resources is another aspect of focussing the innovation at

the farming end. The department of aquaculture defines aquaculture as “the

cultivation of the natural products of the water such as fish, shellfish and plants under

control conditions. Aquaculture can be regarded as the agriculture of the oceans, lakes

and rivers”5. Since, “fish is recognized as the most perishable foodstuff” (Grunert et

al 2004) the aquaculture as science has gained considerable importance. Technology

in terms of management of resources yet again plays an important part. Heen,

Monahan & Utter, (1993) discussed various aspects that involve maintaining the

resources like use of technology at the sea cages to protect the harvest, sea water

supply and distribution, technology sued for fish transport and handling, feeding

techniques and equipment etc.

// 5 http://acuicultura.cicese.mx/english/definicion.htm

43


Interestingly Aarset (1999, pp. 179) studies the industry and research systems by

breaking down into three concepts – production technology – attributes achieved by

investment, production costs and political power –farmer’s ability to shape political

and social environment for the enterprise. Thus, more and more of scientific

techniques to increase harvest are being used. Another important aspect besides

technology transfer is “diagnosis and control of communicable diseases” states Pillay,

(1994). One example being the shrimp farming industry in Taiwan, which collapsed

due to the economic impact of diseases, (Pillay 1994). Incidentally, Chaston (1997)

states that mistakes have been made in the aquaculture industry, which is not paying

heed to potential problems and continuing development. For example when there was

a culture technology research conducted in Europe for flatfish species, development

was continued for a prolonged period even when it was obvious culture costs would

exceed market costs, (Chaston, 1997).

The above section throws light on the current situation at the farming end of the

seafood sector. It is observed that it is typically driven by production costs (especially

for commodity type products) and ‘aquaculture’ from a perspective of a science of

studying management of seafood resources is the value additive.

44


Chapter 4

Discussion

45


Rudder et al (2001) in their study discuss various steps involved in new food product

development right from conceptual stage through, until commercialisation. And state

that innovation and introduction of new food is important to gain advantage in the

market. The increasing demand for fresh and unfrozen fish has thus contributed to the

industrialisation and hence innovation of the fish supply chain. The above literature

review has thus, touched upon various aspects that have had an influence on

innovation or which are a result of innovation in every aspect of the industry’s value

chain. Some of them have been discussed below which lead on to the next section of

this research essay - which is the future research directions.

• First and foremost being to understand the value chain and the role of its

actors and optimally integrating the value chain functions. According to Blois

et al (2000), “The value chain represents the linkages and interdependencies

between suppliers and intermediaries”. Innovation and research must not

overlook this aspect. In fact the upstream and downstream links to resources

(Borch, 1998, pp. 23) is important. No activity can be performed in isolation

even if the firm is vertically integrated; interdependency with other actors and

being proactive in the value chain is a must. It is interesting to note the

literature reviewed above ahs no clear-cut answer as to where innovation

would fit in, in the value chain, in fact any process and every process can

include and involve innovation. It also indicates that interdependencies and

integration become all the more necessary.

• There is also thus no clear-cut demarcation as to what includes innovation. It

varies from firm to firm. For example what may be defined, as innovation in

46


one firm may not necessarily be perceived so by other firms or other actors in

the value chain such as retailers and/or for that matter, by customers. Nowak

(1997) rightly states, “Value increase is (also) a qualifier that makes it possible

to distinguish between genuine innovations from other, non-innovative

technological improvements”. As long as value is added it is a genuine

innovation.

• Indeed some kinds of innovations can be perceived as adding high value in

some firms while not so in others. For example, “many companies now realize

that the packaging is a component of the total concept and in certain instances

represents an integral element during final usage and fulfils the promotional

function” Chaston, (1997). But maybe for some firms packaging is not

necessarily value adding. At the same time a firm can expect to add value in

the most unexpected process/product changes that can enhance development

and growth of the company. Iversen (2004) considers growth on on-board

freezing facilities an important technological shift in the Norwegian industry.

• Interestingly, though considerable research seems to have been with regards to

vaccines, fish medicine and so on, innovation in terms of medication seems to

be having limited research. Indeed as Asche et al (1999) draw our attention

that “market for salmon medication is limited and fish biology is a relatively

new area so considerable research may or may not happen”. Pharmaceutical

industry for the aquaculture industry is an interesting and new concept but can

the industry bear the costs of establishing such an industry is questionable.

47


• There is perhaps one other important method of innovation, which is

successful at the moment and has not, been discussed. Innovation of new

meals from fresh products in different forms. For example Sealord in New

Zealand has introduced vacuum-packed greenshell mussels in white wine and

garlic sauce, which is a ready-to-heat-and-eat, which won the seafood product

Gold award, (Donoghue, 2004). This was deliberately not discussed as this is a

market induced – and a substantially retailer-embraced innovation just as

packaging mentioned earlier. Anything which directly affects the consumer

indeed steals the show.

Firms should not however restrict themselves to new product development and

research only induced by the retailers (or any particular actor in the value

chain). Market orientation and hence innovation induced from the market is

very important but this can lead to (over) importance of retail sector and hence

innovations induced by retailers under the garb of as if it were being induced

from the market can become an issue. Traill & Grunert (1997, Ch. 8) when

studying Bulmer Holdings a large British drink company observed that “the

technical directors was of the view that product development had become too

much under the control of marketing side of the business” and the need for

widening the scope of involvement of even upstream part of the industry was

observed.

• It is also interesting to note that besides the fact that innovation is relative to

different firms in the industry, authors, Traill & Meulenberg, (2002) have

actually used the phrase ‘highly innovative’, thus introducing a kind of degree

of how innovative a product or process can be. This adds a further distinction

48


of the ‘level of innovation’ – perhaps using metrics such as level of investment

or response rate of customers etc. Thus, this calls for product, process and

market orientation should be balanced (Traill & Meulenberg).

• It is also evident from the literature review that collaboration between the

value chain actors is a very important aspect, which can be developed a lot

more. It is however important that appropriate measures are established to

bring clarity in the role and performance of activities. For example, Grunert et

al (2004) state that animal welfare; traceability, safety and new product

development are the main parameters against which retailers measure their

suppliers. Similarly for other actors in the value chain parameters exist.

However Grunert et al (2004) also state “the relative weight between these

parameters can vary between the chains”. As the parameters among the actors

can vary it is possible that it can also differ and collaboration and alliances in

which case can be challenging. Thus, relationship between entities should be

well established with clearly defined roles, responsibilities and benefits that

accrue. A ‘goal directed research’ as Aarset (1999) claims is in the salmon

farming is what the entire seafood industry should adopt – clear strategies, and

clearly defined benefits and roles of partners.

• Even though marketing orientation seems to be a popular topic of discussion

in literature, Chaston (1997) claims that the marketing oriented philosophy has

limited acceptance within the fishing industry – due to the constraint of

seasonality and location etc. He states new product development should be a

marketing function as with rapid change in technology products in mature

49


stage need not necessarily be a source of profit in the future, (Chaston, 1997).

Icelandic fish is an example of a success story, which has a well-integrated

marketing programme according to him. Even though innovation as such is to

meet the changing needs of the market, innovation as a value chain activity

itself needs to be constantly changing whether in its means, approach or

process. Globalisation has also made marketing essential and a necessity. This

indeed seems to be an area which seafood industry has to pay considerable

attention to.

• Another interesting aspect related to globalisation is competition that seems to

be a driving force for innovation. “Even if the firms don’t make any profits,

you still have to make products in order to keep the customer interested”, state

Grunert et al (1997). Many firms just to keep up the image just innovate

whether any benefit is realised or not perhaps to maintain innovation as any

other ongoing business function, which is not necessarily a pragmatic

approach. As mentioned earlier it is a constantly evolving process. But as per

Royal Greenland (Grunert et al, 1997), a firm should balance innovativeness

as some segments of customers are conservative and tend to dislike too

innovative products. Of course this is again a marketing perspective and

depends on the target market identified depending how conservative the

market maybe etc.

• It is also appreciable how firms in the industry have demonstrated that

limitations and threats can be made into an opportunity through constant

product-process innovation. For example any shortage in raw materials supply

50


etc, can be balanced by innovation in farming industry as a whole. In fact this

is well supported by Guillotreau (2003) who states that if the over all market

price of salmon has decreased it is because of the technological advancement

and economies of scale in the industry. This he says also shows the control

over production that has been achieved.

• There have been considerable limitations observed by authors in the industry

as stated. Engle (2003) pointed out the issue of off-flavour and difficulty in

managing large volumes of data in farms. And interestingly the author states

that due to technological advances yield has increased over the years this is

natural and not a big achievement. Maybe especially if you consider how

much poultry industry for example has seen decrease in prices, seafood

industry has to grow a lot. Iversen (2004) sees the main threats as being supply

of raw materials, competition from low wage countries, competition from

substitutes and countries entering into a trade bloc. These seem to be the

important aspects, which the firms in the seafood industry need to focus on.

With considerable increase in China’s production the developing nations seem

to be fast catching up. Moreover even though there is less empirical evidence

yet it seems innovation at farming end needs to be induced. Problems in

rearing systems, transportation and feeding, besides nutrition and diets,

environmental factors – pollution, genetic problems, medication during before,

during and after harvesting are some of the issues which involve and will

require intensive research in the future, (Heen, Monahan & Utter, 1993).

Environmental costs are also borne usually by salmon farmers (Asche et al

1999) so great scope for clarity in this area. R&D in terms of environment has

51


greater impact on farmers and hence more incentive and solutions to improve

productivity should happen.

Then there is always the challenge to meet the growing demand for fresh

seafood. Fearne & Hughes (2000), interestingly point out one aspect of the

fresh food industry that, perhaps due to the family owned businesses (which

are most common in the fresh produce industry) there is limited innovation.

After substantial globalization etc perhaps lot of consolidation of the

fragmented industry and vertical integration and alliances etc has led to huge

organizations and R & D has gained considerable importance. They also point

out that lack of branding etc has created no entry barriers to the industry –

hence technology available is pretty standard to the industry and easy to

replicate, (Fearne & Hughes, 2000). Though aspects like branding, innovation

can be a challenge to smaller firms; it would make the industry stronger as a

whole. It can also be seen that brand name has seen a lot of growth – and will

be there perhaps in the future even more.

• In terms of size of the firm as mentioned above, the difference in size of the

firm influencing the research and development aspects is inevitable. Large

companies have substantial market presence yet are in search of new

technologies and products to complement existing offerings, (Anonymous,

2003a). Small companies are often founded on innovative technologies, but

sometimes lack resources and market presence to fully commercialize a

product. With all this it seems that pressure to innovate at farming end is more

for larger companies – smaller companies may try and be more economical -

However, according to Asche et al (1999) ‘Individual farm producers could

52


not obtain competitive advantage’. This may not be applicable to vertically

integrated large firms –– small farms may find the need to sell the idea in the

market to make innovation more economical – spill over – issue as discussed

in the literature review.

• Being environment conscious is an extremely important aspect. Asche et al

(1999) state, “All aquaculture industries are closely linked to and dependent

upon the environment”. Considering the technique of farming environment

plays a very important role. In fact Asche et al (1999) state that “If aquaculture

production is not environmentally friendly the productivity of the marine

environment at farm locations will be negatively affected, and in the worst

case the operations of the farms has to cease”, incentives in aquaculture

industries for farmers, to be environmental friendly is therefore more than in

other industries. They say that the feed is the common contaminant, as what is

not consumed becomes pollutant from the farm. Considerable research seems

to be happening in this area and undoubtedly it will remain a potential area for

further technical research. “However, since a farmer’s actions have an impact

upon the ecological system in which the farm is operating, the farmer can

indirectly affect these factors”, Asche et al (1999). Most problems affect the

farm’s production process whether environmental or legal. Firms have to

realise that targeting productivity simultaneously environmental impact is

required if the latter is negative then subsequently it will have negative impact

on industry. Yet as Asche et al (1999) states concludes that there are yet

certain environmental issues that remain unresolved.

53


• Even though there are considerable differences between seafood and other

industries as mentioned in earlier section, for example poultry and beef are

said to be heavily vertically integrated (Katz and Boland, 2000) – yet sea food

industry is relatively young and should draw parallels and learn especially

how prices are falling, brands created. Other industries can provide a

guideline.

• In terms of pricing as Engle (2003) points out in terms of the catfish industry

the challenge is to “coordinate adoption of new higher-cost technologies with

demand increasing market development to sustain farm price levels”. Though

economies of scale and costs are basic components that need focus in any

firm. Seafood sector seems to have not yet reached that maturity and stability

which other industries have. Even Borch (1998) in his study observed that

tremendous success was achieved due to cost competitiveness. It is important

to understand that pricing is on a continuum the more value added the more

differentiation pushed at the end of the supply chain more the premium,

(Sankaran, 2004). For example for NZKS, the Japanese market also

commands a sizeable premium due to additional value added such as for

salmon dips or smoked salmon, (Sankaran, 2004).

Finally, to sum up as Heen, Monahan & Utter (1993) state “The success or failure of

any industry is ultimately dependent upon economic factor”.

54


Chapter 5

Results

55


Research Questions

As a result of the literature review and analysis a set of questions has been prepared.

This also provides as a recapitulation of the literature review and analysis presented

above and helps identify the gaps in literature. Thus, this method has been adopted as

it primarily provides a template for further research. The questions below thus cover

the wide range of aspects discussed in his research and are very broad. It is intended

that questions below bring out the, main concepts which require further research and

can even serve as an interview questionnaire.

1. How is R&D conducted in firms? – What is the process flow and which

business units are involved within and outside the firm?

a. What are the conflicting issues of concern to the firms?

b. How do the firms (especially smaller firms) manage risk

diversification?

(A comparative study between small and large firms would be an advantage.

Though this is however not just an issue for seafood industry and it is an

understood fact that size and R&D have a trade-off. Grunert et al (1996) state

larger the organisation more formalised is the innovation process and it is not

possible to manage innovation successfully in an informal way. Smaller firms are

more flexible and co-ordinate activities better. A comparative study would benefit

the industry in understanding managing innovation combining aspects from

different firms).

56


2. What are the marketing techniques used for new product introduction or any

new changes in existing products and what is the current market channel structure

adopted by the firm?

a. What is the relationship between the marketing unit and R & D

units in the firm? How well is it integrated?

b. Would the firm consider itself to be responsive enough to the

changing likes, tastes, emerging markets etc? How?

c. How do firms determine the consumer value perception?

d. How does market orientation influence the performance of new

product development?

3. a. What is the definition of innovation according to the firm?

b. Would the firm regard itself as being more product oriented or process oriented

or both? And why?

c. Is there a distinction between incremental and short term innovation? If yes, what

is the difference in approach adopted for incremental and short term innovation?

(A comparative study on perception of firms towards innovation would be useful in

studying the differing approaches also adopted by the firms)

4. What role has technology played innovation in the firm? And/Or how has

technology been deployed in innovation and research?

5. a. Which seafood product/s sold by the firms are substitutable?

b. Do firms keep track/monitor of the substitutable products (such as price trends etc)?

c. What efforts are made to overcome issues with substitutable products?

57


d. Do niche products as King Salmon of NZKS etc have substitutable products or are

only standardized (commodity type) products a prey to this?

6. a. Do firms have the ability to switch to alternative species (as in some firms in the

Philippines stated by Pillay 1994)?

b. Is this achievable? How easy/difficulty is it to switch?

c. Have firms tried this switch and what has been the outcome?

7. a. How important is branding to the firm?

b. Does the firm sell through private labels? If yes, what is the strategy adopted

for private labels?

c. Is there distinction in type of innovation for branded and private labelled

products? On what basis do private labelled products compete mostly on? (price?)

d. The theme of brand names attached to geographical locations seems to be

popular. What steps do firms in the seafood industry take to achieve this kind of

image? What is involved in maintaining this image in terms of innovation in the

company?

8. a. How important is patenting during innovation? Do firms strongly support

patenting?

b. What is the success rate in terms of the patents actually being marketable?

(ratio of total patents in a year to what was marketable?) Is number of patents used

as a KPI – key performance indicator?

58


9 a. What kind of collaboration has the firm undertaken with 1. Other firms in the

value chain 2. Universities

b. Which actor/s does the firm, in the value chain have maximum collaboration

with and why?

c. Is spill over an issue? How is it handled?

d. Is collaboration done with firms in another country? There maybe differences in

culture, approach etc all these aspects influence the partnerships – what efforts are

made to overcome such barriers? (for example NZKS is NZ based with exports to

Japan).

e. Is the relationship between the entities in distribution chain formal or informal?

How would they like it to be?

10. a. What drives innovation at the farming end? And what are the factors

involved?

b. Is there a full control of quality at the farming end?

c. How is it communicated to the retailers and what roles do the retailers and other

actors in the value chain have in such innovation at farming end?

11. a. Knowledge Management - KM is a widely known aspect in term of

development of an organization. How is this integrated with innovation in the

value chain? (Intellectual property?)

b. KM seems to be important for retaining and capturing especially intangible and

tacit knowledge of the company. Though there has been no mention of KM in the

literature review is there a process close to KM adopted by the firm and if yes

how?

59


12. a. Do firms always have set target beneficiaries when collaborating?

b. Objectives of the ‘innovation’ (invention) must communicate the target

audience - specifically the farmers at the farming end if they are the beneficiaries?

How is any kind of communication done to the beneficiaries?

13. a. How does competition influence innovativeness of a firm in the seafood

industry?

b. What are some of the strategies firms in the industry have employed to beat

competition? Which of these were considered to be innovative according to the

firms?

14. What are the perceived (potential) bottlenecks in the innovation process?

15. What view does the firm have of a co-operative structure for the sea food

industry in their respective country? Especially in smaller countries with

fragmented markets is this structure considered beneficial?

16. a. What are the KPI’s of the firm as a whole? (Is innovation one of them?)

b. What metrics are used to determine success/failure of research? Are there

instrumental ways of measuring some of the most important (market-oriented)

quality characteristics?

c. How does a company measure its performance of marketing activity – for

example its market image created as a result of its innovation/R & D activities?

60


d. Traill & Meulenberg (2002) state that especially the marketing literature though

has developed scales as a measure of the market orientation concept, work is

needed to quantify product and process orientation. How is this done?

(Studying the effect of marketing policies on innovation is an important aspect).

17. Hovgaard & Hansen, (2004) in their study found that respondents found the

need to have both commodity products and niche and speciality products. And

in fact that’s what innovation is - to balance both. Further research on this

aspect especially on niche products would help in understanding the focus of

innovation in the industry.

61


Chapter 6

Conclusion

62


“Innovation makes life interesting, but not easy”, (Traill & Grunert, 1998).On similar

lines Traill & Meulenberg (2002) state that with advent of biotechnology revolution

pressure for control and economies of scale, food safety, nutritional quality, and

consumer demands for convenience, variety etc and finer market segmentations, have

increased demand for research in the [food] industry. Globalisation and related

aspects has created increased pressure for greater efficiency in production and

marketing (Heen, Monahan & Utter, 1993 pp. 272). Hence firms have to “upgrade

marketing competencies as well as scientific R&D” (Traill & Meulenberg 2002). And

also have to understand that innovation provides a new vista for expansion of

production - of the firm and subsequently the industry.

The research thus aims to throw light on different facets of innovation in the value

chain, in the seafood industry. By understanding the value chain of the industry and

different aspects of innovation from the literature review conducted (figure 3), it is

expected that firms can analyse and extend this further in understanding the industry

as-is and analysing areas of potential research. However, evidence from published

sources is still scant and academic research can create a great deal of interest. One big

advantage of such an analysis for the firm allows it to identify the best practices is an

integrated approach to improvement (Mann et al 1999). Besides, it also benefits the

firms in understanding that introduction of new products can improve profitability and

increase sales, (Chaston, 1997). However it must also be remembered as stated by

Traill & Meulenberg (2002) that a ‘one size fits all’ approach is inappropriate. And

approaches and issues differ from firm to firm even within the same industry.

63


Value- chain innovation Seafood sector

Food industry

Seafood and related industries

Farming end of the industry

Private labels Globalisation Production costs

Product differentiation Branding Capital

Niche strategy Strategic responses Aquaculture

Spill over Collaborations

Pricing

Figure 3: Depicts over view of the literature review and aspects discussed

Besides, as mentioned earlier collaboration is an important element in research. As

Sankaran, Samson & Wilson (2003) state that the firms under study gained mutual

benefit through full-fledged research excellence. Traill & Grunert, (1997) when

conducting a study on Royal Greenland observe that “good relationship with both

retail and catering customers is partly built on the ability continuously to present new

products that are innovative and competitive”. At the same time mere introduction is

not sufficient as failures often take place the ideas should be progressed through to

market launch, (Chaston, 1997). As Grunert et al (1996 Ch. 12)), state that product

64


innovations itself is one strategy but “another strategy is to introduce new product

concepts which create new markets”. After all firms have to realise that, “to sell in

different markets means selling in different cultures”, in such cases companies end up

building partnership and partner’s supplementary competences become important.

Grunert et al (1996) also state that “building ‘intercultural competence’ is also

essential. Thus, it is important to remember that collaboration and marketing seemed

to be the catchphrase and yet they are to be skilfully exploited. Heen, Monahan &

Utter (1993) state that “If the rapidly growing salmon aquaculture activity is to mature

into a persistent and healthy industry, the growth must be accompanied by

assimilation of efficient and innovative technologies in many areas”. This is also

applicable to the aquaculture industry at large.

The above research thus focussed on contributing to encourage further research on

seafood sector. Firstly understanding the concept of value chain (Porter, 1985) and

analysing how well innovation fits in to the value chain (value chain analysis). The

literature review has been conducted in three parts (figure 3). Firstly, understanding

innovation in the food industry as a whole, secondly analysing the literature on

innovation in seafood and related industries and finally, by studying innovation at the

farming end of the value chain. The analysis of the literature review has then been

presented to aggregate the different facets of innovation observed in the value chain

as seen relevant to the seafood industry. Finally, a set of research questions in the

form of a research questionnaire has been prepared. This not only identifies the gaps

but presents ideas for future research. Thus, contributing to the possible future

avenues for the existing literature. The diversity of literature review and analysis of

different aspects of the industry it is an intention to present the current issues of the

65


seafood and aquaculture industry (based on empirical evidence) and identify future

research directions.

Hovgaard & Hansen, (2004) state that the critical success factors in innovation are:

high quality new product process, clear well-communicated new product strategy and

adequate resources for new products. As Wilson & Sankaran (2001) also state – it is a

matter of understanding your capabilities and your partners. To sum up, Barrier

(1994) states that “what counts, ultimately, is not a single innovation-a “magic bullet”

that immunizes a company against the competition-but a climate of innovation that

leads to one small triumph after another and makes possible the occasional real

breakthrough”. Thus firms must try to strengthen the value chain by collaboration

and integration and also incorporate strategic aspects innovation is bound be

successful.

66


References

67


1. Aarset, B. (1999) “Aquacultural development, institution building and

research and development policy: Norwegian salmon and Arctic char farming

as cases,” Aquaculture Economics & Management, Vol. 3, No. 2 (August), pp.

177-191.

2. Anonymous (1995) “Innovating to be competitive: the Dutch flower industry,”

Harvard Business Review, Vol. 73, No. 5 (Sep/Oct), pp. 130-131.

3. Anonymous, (1997), “The Value Chain – The Original Breakthrough”, The

Antidote, Issue 8.

4. Anonymous, (2001), “Salmon company reels in a solution”,

http://www.istart.co.nz/index/HM20/PC0PVC197/EX232/CS2210

5. Anonymous, (2003a), “Moving innovation beyond the four walls – The

strategic importance of collaborative development”, Strategic Direction, Vol.

19, No. 7, pp. 36-39.

6. Anonymous, (2003b), “The promise of a blue revolution”, Economist, Vol.

368, No. 8336, pp. 19.

7. Asche, F., Guttormsen, A.G., & Tveteras, R. (1999) “Environmental

problems, productivity and innovations in Norwegian salmon aquaculture,”

Aquaculture Economics & Management, Vol. 3, No. 1 (April), pp. 19-29.

8. Barrier, M. (1994), “Innovation as a way of life – includes related article –

Cover Story”, Nation’s Business, U.S Chamber of Commerce.

9. Blois, K., Shaw, S., and Ennis, S. (2000), “Marketing-Channel Management”,

Textbook of Marketing.

10. Borch, J. O. (1998), “Competitive Advantage through Virtual Organisation of

Aquaculture Enterprises”, Eide and Vassdal (eds.) Proceedings of th 9th

68


International Conference of the International Institute of Fisheries Economics

and Trade, Norway.

11. Bowonder, B., Thomas, T. M., Rokkam, M. V., and Rokkam, A. (2003),

“Managing strategic innovation: an analysis of Dr. Reddy’s Laboratories”,

International Journal of Technology Management”, Vol. 25, Nos. ¾, pp. 247-

267.

12. Bradley, A., McErlean, S., and Kirke, A. (1995), “Technology transfer in the

Northern Ireland food processing sector”, British Food Journal, Vol. 97, No.

10, pp. 32-35.

13. Champion, D. (2001), “Mastering the Value Chain”, Harvard Business

Review, pp. 109-115.

14. Charles, E., and Paquotte, P., (1998) “Product differentiation and quality

approach in the French market for oysters and mussels”, Eide and Vaasdal

(Eds.), Proceeding of the9th International Conference of the International

Institute of Fisheries Economics & Trade, Norway.

15. Chaston, I. (1997), “Marketing in Fisheries and Aquaculture”, Fishing News

Books, Great Britain.

16. Cockburn, I. (2004), “The changing structure of the Pharmaceutical industry”,

Health Affairs Chevy Chase, Vol. 23, No. 1, pp. 10-22.

17. Collis, J. and Hussey, R. (2003), Business Research: A practical guide for

undergraduate and post graduate students, Great Britain, Palgrave

MacWilliam.

18. Craig, R. (2000) “Value chain management industry trend or event”, [Online]

19. Curtis, H, (2004) “Seafood Industry Value Chain Analysis - Cod, haddock and

nephrops”, Report by Seafish.

69


20. Department of Aquaculture, Mexico, [Online]

http://acuicultura.cicese.mx/english/definicion.htm

21. Donoghue, T. (2004), “Sealord snags prize”, The Independent.

22. Dreyer, B., (1998), “Uncertainty, flexibility and sustained competitive

advantage: An empirical study of the Norwegian fish processing industry”,

Proceedings of the 9th International conference of the International Institute of

Fisheries Economics & Trade – Tromso, Norway.

23. Engle, C. (2003) “The evolution of farm management, production efficiencies,

and current challenges to catfish production in the United States,” Aquaculture

Economics & Management, Vol. 7, Nos. 1/2, pp. 67-84.

24. “Ensuring Global Competitiveness of the US Seafood Industry”, Sea Grant.

[Online]

http://www.flseagrant.org/program_areas/safer_seafood/publications/seafood_

tech_theme.pdf

25. Fearne and Hughes, (2000), “Success factors in the fresh produce supply

chain: Insights from the UK”, British Food Journal, Vol. 102, No. 10, pp.

760-772.

26. Fisheries and Aquaculture Management – Canada (2004) http://www.dfo-

mpo.gc.ca/aquaculture/aquaculture.htm September 16th 2004

27. Food and Agriculture Organisation – Fisheries Information Centre, [Online]

http://www.fao.org/fi/default.asp

28. Grunert, K. G., Baadsgaard, A., Larsen, H. H., and Madsen, T. K (1996),

“Market Orientation in Food and Agriculture”, Kluwer Academic Publishers,

USA.

70


29. Guillotreau, P. “How does the European seafood industry stand after the

revolution of salmon farming: An economic analysis of fish prices”, Marine

Policy 28, pp. 227-233.

30. Gupta, A. K., Raj, S. P., and Wilemon, D. (1986), “A Model for studying

R&D-marketing interface in the product innovation process, Journal of

Marketing, 50, 7-17.

31. Harmsen, H., & Traill, B. (1997) “Royal Greenland A/S: from fish to food.” In

Traill, B., & Grunert, K.G. (Eds.) Product and Process Innovation in the Food

Industry (1st edition), Blackie Academic & Professional, London, pp. 147-162.

32. Harmsen, H., Grunert, K.G., & Declerck, F. (2000) “Why did we make that

cheese? An empirically-based framework for understanding what drives

innovation activity,” R&D Management, Vol. 30, No. 2, pp. 151-166.

33. Heen, K., Monahan, L. R. & Utter, F., (1993) “Salmon Aquaculture”, Fishing

News Books, Great Britain.

34. Hovegaard, A. and Hansen, A. (2004), “Innovativeness in the forest products

industry”, Forest, Products Journal, Vol. 54, No. 1, pp. 26-33.

35. http://www.findarticles.com/p/articles/mi_m0FOX/is_1_5/ai_60369862,

January 12th 2000.

36. Hulm, P. “2004), “The Value Chain Revolution”, International Trade Forum,

Issue 1, pp. 22-24.

37. Iversen, A. (2004) “Responding to Globalisation: strategic options in the

Norwegian seafood industry,” European Business Journal, Vol. 16, No. 1 (1st

quarter), pp. 32-45.

71


38. Jim, M., (1999), “The new shell game: John Risley has turned a tiny Halifax

lobster shop into an international sea food giant”, Canadian Business, Vol. 72,

No. 7, pp. 50.

39. Katz, P. J. and Boland, M. (2000), “A new value-added strategy for the US

beef industry – The case of US Premium Beef Ltd”, British Food Journal,

Vol. 102, No. 9, pp. 711-727.

40. Kinnucan, H. W., Asche, F., Myrland, O., and Roheim, C. A. (2003),

“Advances in economics of marketing and implications for aquaculture

development”, Aquaculture Economics and Management, Vol. 7, No. 1/2, pp.

35-53.

41. Koku, S. P., (1998), “Innovations and information management in the food

industry”, British Food Journal, Vol. 100, No. 6, pp. 278.

42. Lancaster, G. and Walters D. (2000), “Implementing value strategy through

the value chain”, Management Decision, 38, 3, pp. 160-178.

43. Mann, R., Adebanjo, O., and Kehoe, D., (1998), “Best practices in the food

and drinks industry”, British Food Journal, Vol. 5, No. 3, pp. 184-199.

44. Nowak, A. (1997), “Strategic relationship between quality management and

product innovation”, The Mid – Atlantic Journal of Business, Vol. 33, No. 2,

pp. 119-132.

45. OECD (1981), The Measurement of Scientific and Technical Activities, The

Frascati Manual, 1980. Paris: OECD

46. Orr, S., (1999), “The role of technology in manufacturing strategy:

experiences from the Australian wine industry”, Integrated Manufacturing

Systems, Vol. 10, pp.45-55.

72


47. Pillay, T. V. R. (1994), “Aquaculture Development – Progress and Prospects”,

Fishing News Books, Oxford, Great Britain.

48. Porter, E. M. and Linde, C. (1995), “Green and Competitive”, Harvard

Business Review, pp. 120-134.

49. Porter, M., E. (1985) “Competitive Advantage Creating and Sustaining

Superior Performance”, Coller McMillan Publishers, London

50. Querna, E. (2004), “Fixing Fish Farms”, U.S News and World Report, Vol.

137, No. 5

51. QuickMBA.com - Internet Center for Management and Business

Administration [Online] http://www.quickmba.com/strategy/value-chain/

(1999-2004)

52. Rainbird, M. (2004), “A framework for operations management: the value

chain”, International Journal of Distribution & Logistics Management”, Vol.

34, No. ¾ pp. 337-345.

53. Rudder, A., Ainsworth, P., and Holgate, D., (2001), “Case Study, New food

product development: strategies for success?”, British Food Journal, Vol. 103,

No. 9, pp. 657-670.

54. Sankaran, J. K. (2004), “Value – Chain Innovation in Aquaculture - Insights

from a New Zealand Case Study”, [Contract # UOAZ0303] University of

Auckland and Foundation of Research, Science & Technology.

www.business.auckland.ac.nz/comwebContent/docs/SeaFood/Valuechain%20

innovation%20in%20aquaculture.pdf

55. Sankaran, J.K., Samson, D.A., Wilson, T.H. (2003) “Vendor-Manufacturer

Partnerships in Oligopolistic Industries: Insights from Australasian process

73


industries,” Proceedings of the 34th Annual Meeting of the Decision Sciences

Institute, Washington, D.C., November 22-25, 2003 (on CD).

56. Shaw, S. (1993) “Marketing.” In: Heen, K., Monahan, R.L., & Utter, F. (Eds.)

Salmon Aquaculture. New York: Halsted Press, pp. 255-273.

57. Shaw, S. A., and Gibbs, J. (1996), “The role of marketing channels in the

determination of horizontal market structure: the case of fruit and vegetable

marketing by British growers”, The International Review of Retail,

Distribution and Consumer Research, 6:3.

58. Slywotzky, A. (1998), “The profit zone: Managing the value chain to create

sustained profit growth”, Strategy and Leadership”, 26, 3, pp. 12-16.

59. The New Zealand Seafood Industry Innovation Project, University of

Auckland, [Online] http://www.business.auckland.ac.nz/seafood/

60. Traill, B. W., and Meulenberg, M., (2002), “Innovation in the food industry”,

Agribusiness, Vol. 18, pp. 1-21.

61. Traill, B., & Grunert, K.G. (Eds.) (1997) Product and Process Innovation in

the Food Industry (1st edition), Blackie Academic & Professional, London.

62. Tveteras, R and Kvaloy, O., (2003), “Vertical coordination in the salmon

supply chain”, XV EAFE Conference, Session 1, Ifremer, Brest, France.

74

value-chain innovation in the seafood sectordocs.business.auckland.ac.nz/doc/case-study-value... ·...

Documents