Case study 3.1
1 Discuss the different environmental factors having an impact on the tuna-processing
industry.
In the USA tuna fish is one of the most popular and demandable fish. Based on this fish many
fish industry already developed. Among them starkest, bumblebee and chicken of the sea are
famous. Because they controlled almost 80% market share of the processed tuna fish market. All
those fish companies are located in the different coastal sea area. The USA govt. offer varieties
of tax reduction policies because of their internal business expansion purpose. Most of the
organization concerns the location, wages, and tax tariffs issues before established any new
industry. Because in some region the USA govt. offer low taxes instead of other states. As a
result, it might be toughest for the other organization to compete with them. Whether StarKist
pays 15 to 35 percent tariffs whether bumblebee only paid 1.5 percent duty. The US govt. offers
these two tariff systems so that most of the tuna fish producers may shift their business into other
states instead of Samoa. Because in the USA Samoa is the richest tuna fishing ground. That’s
why all the big industry operates its activities in this coastal zone. That’s why the USA govt.
tries to offer a new region. They feel that if the fish industries explore their business in many
zones it might be effective. Even in Samoa, they have to pay 3.30 USD per hour for labor wages
purposes whether in Ecuadorian they need to pay just 40 cent which is higher than the
Ecuadorian. Still this low-cost wages and tariff offerings StarKist never shift their business into
other regions like Ecuadorian. Because they know that in Ecuadorian there have less opportunity
to grow this tuna fish business because that region tuna fish is not available like Samoa. As a
result, their overall profit margin will be decreased. That’s why via offerings of lower wages and
tariff costs in other zone StarKist organization is less interested to shift their business into any
new region.
2 How can an international distribution strategy provide a competitive advantage? Which
of the three market players has the best distribution strategy?
First of all, the USA always supports an equal and well-maintained distribution strategy. That’s
why they charge a high price in the Samoa zone instead of the Ecuadorian. On the other side
because of the free international trade policy, most of the time people try to import those
products which are less efficient in their production zone. In the same way which product is
more sufficient to one country that country export that product. This way international trade and
distribution policy occurs.
Starkist, Bumble Bee, and Chicken of the sea are the main organization which controlled at least
80% of the tuna fish market. Among them, bumblebee enjoys low tariff duty facility whether
Starkist offers different types of products. Still the govt. charges high price because of product
uniqueness the demand for the product increased.
On the other side, tuna fish is the most demandable product in the USA and European countries.
And there has a good connection with the USA and the other European country. For this reason,
the transportation cost is lower compared to other countries. For this reason, the USA tuna fish
industry gets expanding comparatively Asian country.
3 In what ways are international trade treaties having an impact on the tuna canning
industry?
Because of international trade treaties according to the agreement, all the listed countries enjoy
the same tariffs. These international trade treaties help to expand the USA tuna canning industry
worldwide. Not only that ASEAN and other countries also get many benefits because of this
agreement. If this agreement didn’t occur there will be a high chance to occurs discrepancy
regarding tariffs issues. This tariff discrimination might cause a lot of issues in the international
tuna canning industry. If international trade treaties are against these businesses it’s tough for the
tuna canning industry to operate their business globally.
4 How would you have approached this issue as a member country of ASEAN?
It is true that because of the abundance of tuna fish and the low transportation cost reason most
