aquarius food industry case study
Drex Norrizz Libaton
Paolo Martin Uy
A Case Study on Aquarius Food Industries, Inc.
I. Central Issue
Aquarius Food Industries, Inc. experienced stable, nearly flat sales growth for the past few years. The company desires to boost sales and profit, and strengthen its position in the industry.
II. Areas of Consideration
a. External Analysis
i. Macro Environment
1. Socio-Cultural
Security issues in Mindanao
AFI strictly implements a 30 days credit term to its customer beginning from the delivery date. However, with the recent business downturn in Mindanao partly due to the Abu Sayyaf hostage crisis, customers have been stretching these payment terms to 60 days. ii. Micro Environment
1. Industry Rivalry
Mindanao market share
In Mindanao, Neptune, AFI’s brand of bagoong alamang, is in tight rivalry with Lasap brand. Each grabbing around 30 percent of the market share. While Frisco brand is not far, grabbing 20 percent market share.
Lasap under new management
Lasap brand’s new company management has expressed intentions to modernize plant facilities and squeeze out costs further. Complementary to this was a more aggressive marketing and distribution tack, designed to overtake Neptune in Mindanao market. Rumor has it that the company that manufactures Lasap are intending to give volume discounts and a more generous credit term to big wholesalers/dealers. Moreover, Lasap has reportedly approached AFI’s key wholesalers in some parts of Mindanao like GenSan, CDO, etc., and may be able to persuade some of them to shift allegiance.
2. Power of Suppliers
AFI favored by shrimp fry suppliers
Because of AFI’s more stable requirements compared to its competitors, AFI is more favored by the shrimp fry suppliers since its competitors tend to be irregular in their purchases.
3. Power of Buyers
SM Bonus Plans to toll manufacture from AFI
With AFI already toll manufacturing for Golden Hands, SM Bonus is also planning to ask AFI to be their toll manufacturer to
Paolo Martin Uy
A Case Study on Aquarius Food Industries, Inc.
I. Central Issue
Aquarius Food Industries, Inc. experienced stable, nearly flat sales growth for the past few years. The company desires to boost sales and profit, and strengthen its position in the industry.
II. Areas of Consideration
a. External Analysis
i. Macro Environment
1. Socio-Cultural
Security issues in Mindanao
AFI strictly implements a 30 days credit term to its customer beginning from the delivery date. However, with the recent business downturn in Mindanao partly due to the Abu Sayyaf hostage crisis, customers have been stretching these payment terms to 60 days. ii. Micro Environment
1. Industry Rivalry
Mindanao market share
In Mindanao, Neptune, AFI’s brand of bagoong alamang, is in tight rivalry with Lasap brand. Each grabbing around 30 percent of the market share. While Frisco brand is not far, grabbing 20 percent market share.
Lasap under new management
Lasap brand’s new company management has expressed intentions to modernize plant facilities and squeeze out costs further. Complementary to this was a more aggressive marketing and distribution tack, designed to overtake Neptune in Mindanao market. Rumor has it that the company that manufactures Lasap are intending to give volume discounts and a more generous credit term to big wholesalers/dealers. Moreover, Lasap has reportedly approached AFI’s key wholesalers in some parts of Mindanao like GenSan, CDO, etc., and may be able to persuade some of them to shift allegiance.
2. Power of Suppliers
AFI favored by shrimp fry suppliers
Because of AFI’s more stable requirements compared to its competitors, AFI is more favored by the shrimp fry suppliers since its competitors tend to be irregular in their purchases.
3. Power of Buyers
SM Bonus Plans to toll manufacture from AFI
With AFI already toll manufacturing for Golden Hands, SM Bonus is also planning to ask AFI to be their toll manufacturer to