A Five Force Analysis of Marine Harvest - Case Study Example

Download file to see previous pages Potential new entrants to the market will have a hard time creating a profitable business because the salmon industry is a capital-intensive industry. Technological complexity and the expensive nature of licensing in most of the countries serve as a barrier to companies entering the market. Due to these factors, the threat of entry of new firms is minimal for marine harvest (Salmon farming industry handbook, 2014). Potential new entrants to the market will have a hard time creating a profitable business because the salmon industry is a capital-intensive industry. Technological complexity and the expensive nature of licensing in most of the countries serve as a barrier to companies entering the market. Due to these factors, the threat of entry of new firms is minimal for marine harvest (Salmon farming industry handbook, 2014). The threat of substitute products may limit the potential of an established company to create price ceilings. To tackle this problem, the company should be able to differentiate its product or upgrade in some way. A product with many substitutes is susceptible to lose in demanding its prices for the products increased due to high elasticity. There is a definite trend in farmed salmon production that indicates an increase in demand for salmon among consumers. Marine Harvest products differ from other protein sources in terms of healthy ingredients and high omega three content. The threat of substitute products is also low because of the efficiency of salmon production. The food per kilogram used in salmon production is small making it more productive than pork, beef, poultry, and bacon (David and Ryan, 2014). In the analysis of substitutes, the wild catch of fish is considered. Marine Harvest is not facing competition from wild catch since most salmon consumers are showing a preference for farmed products. Customers are expressing concern parasites in salmon harvested from the wild. Therefore, the threat of the substitute is considered medium (Salmon farming industry handbook, 2014). Customers that have a high bargaining power are a threat to the profitability of the company they can demand higher quality and even force down the price of salmon. A greater number of customers gives a significant advantage to the marine harvest company. So far, the company has established itself creating a large customer base for its products. ...Download file to see next pagesRead More