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Pest Analysis

1. Executive Summary


From humble beginnings in the 1970s, Ecuador's shrimp industry expanded rapidly and aggressively, targeting vital coastal ecosystems in which to build gigantic shrimp farms. Today, Ecuador's shrimp industry occupies 500,000 acres of former mangrove forests, salt flats and agriculture lands along the country's Pacific coast. After two decades of solid growth, in the early 1990s, viral diseases and challenges from the environmental community began to impede the development of traditional shrimp farming. Now, a new way to farm shrimp has evolved that protects shrimp from disease and protects the environment from shrimp farming, creating the possibility that shrimp farming could become the cleanest agriculture industry in the world!
Xavier is a shrimp farmer and owns 150 hectares of shrimp ponds in Ecuador. Typically, he will sell his shrimp to a packing plant which will clean and froze the shrimp and either export the frozen shrimp directly or sell them to an exporter. The foreign processors will then prepare the final products to be sold to the distributors and retailers. Upon learning about the chain his shrimp goes through, Xavier is now considering if he should try to expand into the value-added parts of the shrimp business.

This paper presents a strategic external analysis on the shrimp industry using two tools, namely, PEST analysis and Michael Porter’s Five Forces Model. Environment analysis is then summarised with the help of SWOT Analysis model.

Global expansion in this industry has put forward many opportunities for future growth. Xavier’s core competency and capability in the industry leverages competitive advantage for him. We have analysed the option of joint venture with foreign company which will help Xavier to solve many international business problems and also give him edge over others by providing further expertise in processing and marketing, as well as required investment funds....