Group Discussion for Topic 1

Choose an organisation and either a product (or service) that you

are familiar with.
Then:
1. Identify the specific component organisations in its strategic
environment categorising them under Porters Five Forces
Model headings.
2. Rate the threats they pose.
3. Analyse the chosen product using the Porters 5 Forces
Model.

The product chosen is canned tuna as made by Princes Tuna in Mauritius.

Princes Tuna Mauritius (PTM) Riche Terre is a technologically advanced
tuna processing facility.
International

Food

It is certified to private standards such as

Standard,

British

Retail

Consortium,

Social

accountability standards and Marine stewardship council standard. By

diversifying the portfolio products (canned foods, soft drinks, pasta,
cooking sauces, edible oils, ambient ready meals and sandwich paste and
spreads), it has developed its expertise in the grocery market (Princes
Tuna, 2016).

Potential entrants: other canning plants or imported products from

Thailand

Power is also affected by the capacity of people to penetrate the market.

If it costs little in time or money to enter your market and compete
effectively, if there are few economies of scale in place, or if you have
little protection for your key technologies, then new competitors can
quickly enter your market and weaken your position. If you have strong
and durable barriers to entry, then you can preserve a favourable position
and take fair advantage of it.

Rival companies: like Thon des Mascareignes, also in Mauritius

If you have many capable competitors, and they offer equally attractive
products and services, then you'll most likely have little power in the
situation, because suppliers and buyers will go elsewhere if they don't get
a good deal from you. On the other hand, if no-one else can do what you
do, then you can often have tremendous strength.

Buyers: local consumers, consumers in importing countries, distributors,

retailers
This is set by the number of suppliers of each key input, the uniqueness of
their product or service, their strength and control over you, the cost of
switching from one to another, and so on. The fewer the supplier choices
you have, and the more you need suppliers' help, the more powerful your
suppliers are and the lesser will be your profit.

Suppliers: main ingredients: fish, salt, oil

Suppliers can drive up prices.

This is determined by the number of

buyers, the importance of each individual buyer to your business, the cost
to them of switching from your products and services to those of someone

else, and so on. If you deal with few, powerful buyers, then they are often
able to dictate terms to you.

Substitutes: canned meat, canned sardine/mackerel

This is determined by the capacity of your customers to find a different
way of doing what you do for example, if you supply a unique product
that is easy to open for instance,

people may substitute by doing the

process manually. If substitution is easy and substitution is viable, then

this weakens your power.
(Porter, 1979)
As pointed out by Mindtools, (2016), the tool is conventionally used to
identify whether new products, services or businesses have the potential
to be profitable but is equally very useful to understand the balance of
power in other situations.

Source: Grundy, 2006)

Mindtool further elaborate on the model as follows:

The Porter model can be applied to Princes Tuna easily based on the
information provided on its website. Rivalry among existing firms: in
Mauritius, there used to be two big canneries. The two successful
companies were a joint venture between locals and multinational
firms. However, the second one has had major financial problems
and has been bought by Princes in 2014 (Anon, 2016).

The high

investment and technological level entailed may be a deterrent

factor. Unless another firm benefits from such support, it would be
very difficult for others to penetrate this market. Moreover, PTM has
engaged in a number of voluntary standards which clearly
demarcates it.

Potential entrants: other canneries might start production. But

Princes Tuna is geared towards export and to export to the European

Union, the approval process is complex and it is quite difficult for

any new entrant to just start competing with it, unless it targets
another market, for instance, target US market or local or regional
market. However, since Princes Tuna is already exporting to EU and
already has the required infrastructure to process a product of an
international standard, it will be very easy for it to penetrate such
markets. What will limit it is its capacity to produce the volume.

Other substitutes: other forms of fish or other forms of animal

protein in the canned form like canned meat. But tuna has its own
market.

Fish is considered to be a healthier option compared to

meats.

Other forms of fish may not be appreciated some much

because of the smell.

However, some may play on the better

attributes of for instance sardines, because of the high content of

omega acids. And the fact that tuna has a higher content of heavy
metals will not help. But Princes tuna has diversified its portfolio of
products to be in a position to compete with other substitutes.
Buyers: PTM seems to meet buyers requirements, in addition to
legal requirements of the market, which is precisely what makes its
strengths. It therefore exceed the legal requirements which might
explain why it succeeds. As an importer, manufacturer and brand
owner, Princes provides advice and support to customers across the
retail, wholesale, foodservice and industrial sectors.

Its in-house

experts work together with customers on everything from food

safety to new product development, category planning, logistics and
buying.

Princes Tuna supplies branded and customer own brand

food and drink products to meet demand and drive category value.
With a specialised portfolio of products it can cater for industrial
customers and supply high quality co-packing services to selected
brand owners.

Suppliers: Princes Tuna prides in partnering with many suppliers

worldwide

and

targets

at

maintaining

long-term

supply

relationships. By nurturing such relationships, it can possibly be in a

position to retain its suppliers.

One limiting factor might be the

supply of fish. Issues associated are the quality of the fish in terms
of histamine, heavy metals content for instance.

There are also

sustainability issues. But by locating in Mauritius, it has access to a

large economic zone and fishing grounds.

4. What are the implications for the marketing strategy of the

chosen product that arise from this analysis?
As a bigger group post-merger, the new company can strength its position
in the global tuna market and gain long-term sustainability initiatives in
the Indian Ocean Region where the group conducts its operations. Given
its strong position on the global market, PTMs marketing strategy should
be to maintain the interest in their canned tuna by focussing on its
healthy attributes.

It can also use its adherence to various private

standards in markets that demand for same.

It can also enhance the

variety of canned tuna: for instance, instead of traditional tuna in oil/brine,

it can produce tuna with pepper and other interesting combinations.

5. As an analytical framework, what are the strengths and

weaknesses of this model? Are there any changes that you
would recommend?
Porter was able to capture the micro-economic literature into five
explanatory or causal variables to account for superior and inferior

performance, making it more accessible through a description of 5 major

influences:
1. The bargaining power of the buyers.
2. Entry barriers.
3. Rivalry.
4. Substitutes.
5. The bargaining power of the suppliers.
(Grundy, 2006)
Other advantages of the model is that it can be used to predict the longrun rate of returns in a particular industry; it underlines the importance of
looking for imperfect markets, which offer more national opportunities for
superior returns. This is precisely the case for Princes Tuna. It shows that
negotiating power and bargaining arrangements in determining relative
market attractiveness are important factors.
As pointed out by Grundy (2016), the Porters model of competitive forces
is abstract, prescriptive, difficult to explain and to a major extent,
analytical, instead of being practical.
Moreover,

it

oversimplifies

It does not promote innovation.

industry

value

chains

and

does

not

differentiate within the buyers for example. There is also no linkage to

management action. It shows the industrys interactions with boundaries
which are more fluid however nowadays.

The model could incorporate PEST factors to better depict the dynamics of
the strategic environment. Prioritisation of the model within a force field
analysis format could also be done.

The individual influences could be

split at micro level and there is need to apply the five forces analysis
segment-wise throughout the firm.

This exercise has contributed new insights or perspectives to the way in

which I contemplate the strategic environment of the organisation in
question.

I now understand the corporate strategy of PTM.

The five

forces are equally interesting to capture their influence on the profit.

Bibliography
Anon. (2016). Princes, Thon des Mascareignes merge Mauritius tuna ops
https://www.undercurrentnews.com/2014/11/06/princes-thon-desmascareignes-merge-mauritius-tuna-ops/ accessed on 04 November 2016
Princes Tuna (2016). Our company. http://www.princesgroup.com/aboutprinces/sourcing-and-production/princes-tuna-mauritius-riche-terre/
accessed on 04 November 2016
Grundy, T. (2006). Rethinking and reinventing Michael Porters five forces
model. Strategic change, 15: 213229
Mindtools (2016).
Porters

five

forces.

https://www.mindtools.com/pages/article/newTMC_08.htm accessed on 04
November 2016
Porter, M.(1979).

How Competitive Forces Shape Strategy.

Business Review. Harvard Business School Publishing Corporation

Harvard