Recommendations on ways to improve the strategic positioning to curb the Market Share

decline of Danthel Victuals Seafoods

Olatunde Daniel Obadaye

MBA, Nexford University

BUS 6110

11th August 2024

Danthel Victuals, as an indigenous company specializing in seafood and fishing, has set its

sights on expanding into processing and supply with the ultimate goal of achieving global

recognition. The company aims to establish itself as a leading provider of premium seafood

products, but recent competitors gaining entry into the market have led to a decline in Danthel's

market share value. This is cause for concern, necessitating strategic measures to position the

company as the first choice in the Nigerian seafood market.

To achieve this objective, it is imperative to focus on comprehensive market research that

will inform strategic positioning within sub-Saharan Africa. Diversification into processing and

vertical integration through the construction of a fishing factory will significantly enhance control

over the supply chain. Emphasizing quality, innovation, and customer satisfaction will be

paramount. This entails creating healthy, delicious fish products that surpass expectations while

prioritizing customized solutions and punctual [Link] to health, safety, and quality

standards along with sustainable fishing practices will form the foundation of Danthel Victuals'

operations. Leveraging expertise in fishing techniques, project management skills, technological

advancements, and a customer-centric approach are essential for achieving sustainable growth and

competitive advantage.

Porter's Five Forces Analysis for Danthel Victuals

Threat of Substitute

The input supply sector for aquaculture faces a significant threat from substitutes originating

from capture fisheries and traditional agriculture, as these inputs can be repurposed for fish farming.

This threat is exacerbated by the close ties between the aquaculture industry and these sectors, with

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many suppliers operating as dual providers. Notably, fingerlings sourced from natural habitats and

those from both government and private hatcheries serve as direct substitutes. However, fish

farmers engaged in their own breeding and hatchery operations encounter a lower threat level due to

the limited number of accredited hatcheries. While capture fisheries and alternative protein sources

like chicken and beef pose substantial competition, the declining availability of wild fish may

reduce this threat, potentially attracting new entrants to aquaculture. Furthermore, opportunities for

diversification into fingerling production are promising, given the scarcity of reliable hatcheries and

the perceived inferior quality of wild-caught fingerlings. In terms of fish marketing, the threat from

substitutes such as fish shops and supermarkets remains low, supported by minimal barriers to entry

and consumer preferences for open market purchases tailored to individual needs. (Kwamena

Quagrainie,2015)

Competitive Rivalry

The threat posed by established rivals in the input supply sector for aquaculture is

considerable. Firms providing essential equipment, such as harvest and fishing tools for commercial

fishermen, as well as irrigation and greenhouse solutions for horticulturists, dominate this market

landscape. Within this context, government and private fish hatcheries emerge as notable

competitors to the fish farming and input supply sectors. Particularly for suppliers located near

large-scale fish hatcheries, this threat escalates due to established farmers' superior production

efficiencies, larger operational scales, and well-entrenched market positions. Furthermore, the

sectors necessitate significant investments in both equipment and technological expertise to remain

competitive. Similarly, the fish marketing arena faces a high threat level, mainly due to the

relational dynamics inherent in contract marketing agreements. (Kwamena Quagrainie,2015)

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Threat of new entrants

The aquaculture industry’s expansion is attracting a significant influx of new entrants into

the input supply sector, particularly through the establishment of aqua and agrovet shops in

proximity to fish farmers. This surge presents a medium threat to the fish marketing sector,

primarily due to the low barriers to entry and exit. The growing popularity of fish as a protein

source further incentivizes this influx. However, challenges such as high procurement costs

stemming from diminishing wild capture fisheries and the quality concerns associated with farmed

fish may deter many prospective entrants. Thus, while the opportunity for existing agricultural

shops to diversify into aquaculture products is notable, the overall threat remains nuanced by these

market conditions(Kwamena Quagrainie,2015)

Bargaining power of suppliers

The bargaining power of suppliers within the aquaculture value chain is notably significant.

Participants, including fish farmers and input suppliers, operate as price takers, with costs from

earlier stages of production being transmitted downstream to traders. The sourcing of quality inputs

from large, international firms places suppliers in a strong negotiating position, as prices are

determined by global market standards, leaving little room for price negotiation. Moreover,

established input suppliers exert considerable influence over fish farmers, impacting pricing

structures within the fish farming sector. Additionally, the predominance of wild-caught fish in the

market further enhances the leverage of suppliers, particularly large wholesalers and intermediaries

who control the distribution of both farmed and wild fish. The lack of formal contracts in the fish

marketing sector allows suppliers to maintain advantageous negotiating positions, which, combined

with high procurement costs, diminishes the benefits typically associated with low entry and exit

barriers in this industry. (Kwamena Quagrainie,2015)

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Bargaining Power of Customers

The bargaining power of customers in the fish farming and marketing sectors is influenced

by various factors, including market size and geographical location. Fish farmers, who typically

have limited bargaining power with input suppliers, find their position slightly strengthened by

government price stabilization programs, rendering their customers' bargaining power at a medium

level. In larger market areas, customers enjoy greater leverage, particularly when wild capture fish

is readily available, which allows them to negotiate for lower prices. Conversely, in smaller rural

areas, where fish is primarily sold locally and often lacks formal promotion, customers possess high

bargaining power. Thus, while fish farmers operate under medium bargaining power regarding

inputs, customers within the fish marketing sector can exert significant influence. (Kwamena

Quagrainie,2015)

Recommendations

Based on Porter's Five Forces analysis, the client fishing company can capitalize on its

established brand reputation and sustainable fishing practices to strengthen its market position. By

emphasizing sustainability in marketing efforts, the company can attract environmentally conscious

consumers, thereby mitigating the threat posed by substitute products. Additionally, the firm should

explore strategic partnerships with local fisheries to enhance supply chain efficiency, reducing the

threat of supplier bargaining power. Investing in advanced technology for fish processing could

further differentiate the company's offerings, allowing it to command premium pricing and reduce

rivalry through product innovation. Implementing these strategies will not only exploit existing

industry weaknesses but also foster long-term competitive advantage.

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In order to regain lost ground in terms of market share value following recent competition entrants

into the seafood industry; it is evident that Danthel Victuals must adopt strategies aimed at

differentiating itself from competitors while simultaneously meeting consumer demands effectively.

One crucial aspect requiring immediate attention is innovation within product development

processes; this involves crafting unique flavors which resonate well with consumers’ palates

alongside ensuring high-quality standards are maintained across all products offered by Danthel

Victuals - thereby resulting in an increase

Another factor contributing to loss of market share value includes ineffective marketing

strategies employed by Danthel compared against its competitors who have managed successful

advertising campaigns thus driving sales upwards; it may be necessary for the company implement

more robust promotional activities designed to create awareness around the brand amongst target

audience segments - ultimately increasing demand levels overall. (Obadaye 2024,Milestone 1 BUS6100
NXU MBA Programme Assignment)

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REFERENCES

(Kwamena Quagrainie,2015) APPLICATION OF PORTER’S FRAMEWORK TO ASSESS

[Link]
journals_110_articles_122016_submission_proof_122016-[Link]

(Obadaye 2024,Milestone 1 BUS6100 NXU MBA Programme Assignment)

Peter Gratton The fundamentals you need to analyze an industry's weaknesses and strengths

[Link]