Star Kist Tuna Large group

Star Kist Tuna Large group - Star Kist Tuna Case large...

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Star Kist Tuna Case large group discussion Professor Doug Cerf Donald Bren Graduate School of Environmental Science and Management Environmental Risk Management (ESM 286) Winter 2008
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Printed on recycled paper-actually better, not printed at all Analysis Economics of the tuna business Stakeholders Environmental differentiation Public relations considerations Ecological considerations Political and international trade questions
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Printed on recycled paper-actually better, not printed at all Producer economics of tuna business Canners divested their fishing fleets and began purchasing tuna on the open market. Why? Canners exited Continental US for Puerto Rico and American Samoa. Consolidation of canneries 1980 20 canneries; 1990 7 canneries Competitors are parts of Asian conglomerates Future behavior of competitors is unknown Profitability Price and margins are volatile (Exhibit 7,8) Star Kist accounted for 10% of Heinz sales and 5% of pretax profit
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Printed on recycled paper-actually better, not printed at all Producer economics of tuna business Capacity utilization is low Capacity at two plants is 220,000 tons Demand by consumers is 157,000 tons How costly is the dolphin safe decision? Impact of not making the dolphin safe decision on Heinz’s other products. What about the ketchup? Why did competitors follow so quickly? Did this confirm the validity of the decision?
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better, not printed at all Consumer Economics of tuna business Price is an extremely important factor for consumers Fierce competition, consumers have limited discretionary income Brand names in tuna do not necessarily command a premium Brand name commanded a price premium prior to the tuna safe decision, but not afterwards. Innovative product development and product diversification had limited success Dolphin safe tuna did not command a consumer price premium Can you separate out the value (if any) placed on the dolphin safe issue from the impact of competition? Is environmental differentiation possible for basic product?
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This note was uploaded on 08/06/2008 for the course ESM 286 taught by Professor Cerf during the Winter '08 term at UCSB.

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Star Kist Tuna Large group - Star Kist Tuna Case large...

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