Friday, February 11, 2011

Product Life Cycle and Industry Analysis

 
Product Life Cycle
Figure 1
Product Life Cycle


Saturation
 

Maturity
 

Growth
 

Introduction
 


The prawn industry in South Korea is on the growth stage. The company’s initial strategy to penetrate the market is that a representative of the company will personally go to Korea in trade fairs to distribute catalogues, brochures and samples.


The company will make proposals to prospective buyers by stating the necessary information. An agent will be located in Seoul who will be our distributor. Agents are familiar with the ins and outs of selling in Korea and have daily contact with changing market developments


Since prawn industry in Korea is in the growth stage, The company will apply effective and efficient strategies to improve our product in order for us to stay in the competition.





 Industry Analysis
Figure 2
Porter’s Five Forces Model

     
Threats of Entry
            Prawn industry exists in Korea but is limited due to its weather conditions. They have more imports than exports regarding fish/seafood products. 
    Bargaining Power of Buyers
            It is a packed and stripped frozen prawn that has flavoring inside. The company will offer a very affordable price with better quality so that the consumer will be willing to buy because of its convenience wherein it is already stripped and have a reasonable price. The product will always be sold with the highest quality achievable. Since there are many competitors, customers will definitely look for the cheapest price with a good quality. We will offer promos and incentives to the buyers.
 

   Bargaining Power of Suppliers
            As a supplier, the company’s bargaining power against Korean counterparts is having low cost production in terms of labor, manner of acquisition & packaging. Also, our edge against our competitors is that we can supply prawns for the whole year while our competitors have difficulties in producing when winter season arrives due to Korea’s climate. This is not a problem for the company because Philippines is a tropical country.  
     Threats of Substitute
            South Korea’s other major suppliers of prawns includes China, Russia, United States, Japan & Vietnam. In 2003, these five countries accounted for over 70% of total Korean seafood imports on a value basis.
Source: www.fas.usda.com
These countries are threats for the company because they are also a large exporter of prawns in Korea.    
Rivalry among industry players
The edge of the company is producing quality, stripped and packed prawns with very affordable price. This will definitely be a sure catch for the consumers because the company offer the best possible offer.
     Industry Conclusion
            The Porter’s model represents the opportunities and threats of the company for its target market country. The threats of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute and the rivalry among industry players are the forces that this model shows.
            Based on the researched analysis on the Porter’s Five Model, there will be a slight threat with regards our competitors, since there are many exporters of prawns but the company could compete with the product’s value added that is stripped, packed, with flavor included at a very affordable prize.
            The company strategies to persuade the market would go directly to consumers such as hotels, restaurants and even the local wet markets with the help of the agent. These would be very convenient for them because they would not be needing to canvas for suppliers because the company will provide them every information.    

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