Strategic Macro-Environmental Factor Analysis (GC012)

Abstract

Globally, the aquaculture segment continues to be the fastest-growing food-fish producing segment and for India, the second-largest food fish producing country, it was forecasted that the segment would grow at an average the annual growth rate of approximately 7.0% to reach a total production target of 8-10 million tons by 2020.

Currently, no commercial fish vaccines are available in India; therefore, the macro-environmental factors with respect to the competitive, political, economic, socio-cultural, technological, and legal landscapes, which influence a potential entrant’s strategic business decisions to set up a fish vaccines company, are evaluated.

The results indicate that although the macro-environmental factors in India are improving there are still some bureaucratic hurdles to be overcome by an entrant to assure success.
Keywords: macro-environmental factors, aquaculture, fish vaccines, carp vaccines, pestle analysis

1. Introduction

Aquaculture is defined as the farming of aquatic organisms with some form of intervention in the rearing process to enhance production (FAO). Globally, aquaculture continues to be the fastest-growing food-producing segment with an average annual growth rate (AAGR) of 8.2% between 2004 and 2009.

The segment is comprised of 336 species with the Carp species dominating the Asia/Pacific region while the Salmonid species dominate Europe, North and South America. China is the world leader in fish production and the total share of developing countries is greater than 90% of the world’s production (FAO, 2012). From 2004 to 2009, an increase of 38% and 53% was reported for the freshwater and marine fish production, respectively (Ayyappan &
Gopalakirshnan, 2008).

One of the impediments described to negatively impact the growth of global aquaculture production are losses due to bacterial and viral diseases (Abraham, Sil, & Vineetha, 2010). Therapeutic agents such as antibiotics and other drugs (Bharathkumar & Abraham, 2011) are being employed in disease management of farmed fish and vaccines have gained prominence as an eco-friendly alternative (Subasinghe,
2009).
The target country of this research is India, which is the world’s second-largest food-fish producing country (Brugère & Ridler, 2004). In India, the inland aquaculture production has increased substantially from 1.55 million tons in 2000 to 3.72 million tons in 2010 (FAO Statistics, 2010) and is forecasted to reach between 8-10 million tons by 2020 (Paroda & Praduman, 2000).

The Carp species, namely, Catla, Rohu, and Mrigal, dominated the aquaculture segment amounting to 87% of the overall production (Abraham et al., 2010). Exotic species like Silver carp, Grass carp, 10 other minor carp species and catfish (Magur and Singhi) are gaining importance (Ayyappan & Gopalakirshnan, 2008). Katiha et al (2005) estimated that 45% and 50% increases in horizontal (land area for aquaculture) and vertical (productivity per farm site) expansion are possible allowing meeting the demand of 8-10 million tons by 2020. Some of the reasons for the lack of success in the vertical expansion of the Indian aquaculture industry were attributed to bacterial or viral disease outbreaks and poor disease resistance in cultivated species (Das & Gupta, 2007).

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2. Literature Review

  2.1 Macro-Environment Factors

Strategic management scholars theorized that the environment exogenous to a company has a strong influence on its strategic decision making and has to be constantly dealt with by the managers to maintain their firm’s strategic position and retain profits (Aapo Länsiluoto & Tomas Eklund, 2008; Chung-An, 2008; Hamel & Prahalad, 1994).

These dynamic changes in the surrounding environment may lead to uncertainties, impose constraints or may create opportunities and help the management to avoid potential threats (Babatunde & Adebisi, 2012). Only those firms that are vigilant about the changing environment will succeed in taking corrective measures to remain competitive (Bourgeois III, 1985;……

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