Strategic Management in Open Water Fish Farming in British Columbia

This report discusses the external and internal environmental factors in open water fish farming in British Columbia. It includes a PESTLE analysis and identifies major competitive forces. The report concludes that differentiation strategy will help new entrants gain competitiveness.

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the external and internal environmental factors in open
water fish farming in British Columbia. This report discussed about the pestle analysis of the
industry along with identifying the major competitive forces. It is identified that threat of
substitute is one of the major competitive forces being identified in this industry. This report
concludes that differentiation strategy will help the new entrants in this industry to gain
competitiveness.

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Table of Contents
Introduction......................................................................................................................................3
FADS and Mega Trends of the Open Water Fish Farming in British Columbia............................3
PESTLE Analysis............................................................................................................................5
Determination of the industry competitiveness...............................................................................9
Summary....................................................................................................................................11
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
In the current time, there are number of new business sectors emerged in global market.
Some of these sectors are completely new in nature while the others are the simple modification
of the existing businesses in more sustainable way. One of the major business trends in the recent
time is growing popularity of open water fish farming in some countries such as British
Columbia (Cranford, Reid & Robinson, 2013). However, there are number of negative and
positive factors being faced by this industry in the recent time. This is due to the reason that there
are number of sustainability related issues being emerged with the open water fish farming. In
addition, the initiation of the strict government regulations is also having impact on this industry.
This report will discuss about the external and internal environment of the identified
industry along with understanding the core impacts. In addition, the competitiveness in this
industry will also be discussed and evaluated in this report. The most influential competitive
forces will be identified for the identified industry.
FADS and Mega Trends of the Open Water Fish Farming in British Columbia
The Open net fish farms are regulated by the federal government. In recent times, the
government had become particularly concerned about the protection of wild salmon and the
migratory routes in order to ensure that the closed containment is feasible. Various government
to government discussions have been launched. In order to ensure and compact the future of the
18 fish farm tenures in the Broughton Archipelago (CBC News, 2018). There have been various
protests with respect to the Marine Harvest in the territory. The Namgis First Nation was the
party which protested against it.

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The government has given increasing importance to closed containment as opposed to
open water farming which has then brought about increasing difficulties in the open water
farming. Similarly, the profitability in the open water farming has been going down considerably
as compared to the closed containment.
Recently, there had been a Salmon spill in the Open water Farming, which has again lead
to a momentum in the closed water containment and the benefits of land based aquaculture have
been rising. The companies are not in favor of this as they will have to adopt new methods and
trends in order to gain government assistance. This tends to be an extra cost for the firms.
According to Barney (2014), the aquaculture industry in the British Culture has been very
controversial since the past few years and with respect to the environmental concerns this has led
to a decline in the wild salmon populations. There has also been a rise in the spread of viruses
which further builds the case for the decline in open fish farming in the British Columbia.

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Figure 1: The Fishing in BC (Source:CBC News, 2018).
PESTLE Analysis
The PESTLE Analysis is a strategic management tool which can be used to analyze a
long term scenario of the Open Fish Farming industry. The PESTLE Analysis tends to analyze
the Political, Economic, Social, Technological, Legal and Environmental aspects.
Political factors
 There exists a low political interest among the public with regard to the open fish farming
in BC. Hence, from there se, there is little or no pressure on the government with respect
to this.

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 The politicians as well have low interest on commercial fishing
 However, due to environmental concerns there is a large concern for the loss of lives and
spread of virus of the fish population (Britishtrout.co.uk, 2018). The processes are also
influenced to be improved.
 As there have been frequent changes in the policies due to the change in government,
there exists instability.
Economic Factors
 The low and average catches tend to have an impact on the ability to invest and the
capacity to improve the open water fish farming.
 There exists low purchasing power among the different customers in the domestic
market.
 The impact of the economic crisis has been huge on the high value markets.
 The limited financial knowledge among the different businessmen tends to impact the
operations of the firm (Britishseafishing.co.uk, 2018).
 Climatic changes and natural disasters tend to be a barrier to the business and reduce
profitability.
Socio-Cultural Factors
 There exists poor knowledge of handling the different open farming fisheries with low
level of technology which affects the business. Even if the technology advances, it tends
to have an impact on the operations of the firm as the technological advancements are
very costly.

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 There are various safety and health problems due to the poor quality of harvest which has
an impact on the harvesting nature.
 In recent years, there has been an increasing trend of going vegetarian which further has
an impact on the harvested items
 The lack of licenses and adequate awareness in the domain also causes distress.
Technological factors
 The infrastructure in certain areas is not that advanced with respect to the machinery,
tools, practices and facilities.
 The technology which is then available is very expensive and due to the poor nature of
the business, they are unable to update with this (Hill, Jones & Schilling, 2014).
 The processing facilities are inadequate in nature
 Hygiene factors regarding technology are not adequate in nature
 There are no appropriate facilities with respect to both air, water and rail transportation.
Legal Factors
There are different legal factors having an impact on the operations of the industry:
 There are different regulations and monitoring with respect to the :
Quality standards
Food safety
Hygiene standards
Fish handling

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Illegal inland fishing
 In the international export markets there are a different set of regulations.
 There exists general trade agreements and tariffs regarding the open fish farming.
Environmental factors
The different environmental factor are as follows:
 Insufficient availability of desirable clean water
 Loss of biodiversity
 Tropical weather conditions and climates
 Oil spills in the harbors (Ginter, Duncan & Swayne, 2018).
 Sustainability of the fish stocks
Hence, it can be stated that, the main factors that need to be analyzed are the political
factors which relates to the government intervention in the open water fish farming and its trends
in British Columbia. Furthermore, the environmental factors also need to be considered.

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Determination of the industry competitiveness
Bargaining power of the buyers  Bargaining power of the buyers is high due to the
reason that there are number of fisheries currently
operating in the industry (Bun, Kimchhea & Hour,
2014).
 There are number of large, medium and small fisheries
operating in the fish farming in British Columbia.
 Thus, the buyers are having different options and they
can bargain.
 In the open fish farming sector, buyers can be classified
in different levels such as retailers, wholesaler and end
customers. However, the huge number of sellers is
providing more options for buyers (El-Sayed, Dickson
& El-Naggar, 2015).
 Switching cost is also low and thus it is further
increasing the bargaining power of the buyers due to
the reason that they can change their seller at any point
of time.
Bargaining power of the
suppliers
 In the open water fish farming industry, major suppliers
include suppliers of the chemicals and other
equipment’s for the fisheries.
 However, the bargaining power of the suppliers is low
in this industry. This is due to the reason that in the

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fishing industry, role of suppliers is limited to the
extent of supplying the required materials and they do
not have direct impact on the business (Somerville et
al, 2014).
 In addition, there are number of supplier is available in
the market and thus fisheries are having the advantages
of doing business with different suppliers.
 Due to the fact that suppliers are having limited
influence on the business operation of the fisheries,
switching cost is also lower and easier for the fisheries.
Threat of new entrants  Threats of new entrants are moderate. This is due to the
reason that number of negative and positive factors is
relevant.
 New entrants will have to adhere with the strict
government rules and regulations regarding open water
fish farming (Dobbs, 2014).
 Moreover, it will be difficult for new entrants to gain
economies of scale with the already established players.
 However, with the rapid development in the technology
and innovation, it is becoming easierfor the new
entrants to operate in this industry.
Threat of substitutes  Threat of substitute is high due to the reason that the
basic offerings of all the fisheries are same.

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 Difference and variation in the offerings are less and
thus intensity of substitution is more (Schwenger,
Straub & Borzillo, 2014).
 Presence of number of fisheries in the industries further
increases the impact of substitutes.
Competitive environment  Competitiveness in the industry is more due to the
presence of number of buyers and sellers.
 Newer strategies and policies are being adopted by the
fisheries in order to stay ahead in the competition.
Summary
Thus, from the above five forces, it is identified that the impact of substitute products is
the major influential competitive forces in the open water fishing industry in British Columbia.
This is mainly due to the reason that there are number of buyers are present in the industry with
having similar offerings. Thus for the new entrants, they should come up with different and
varied offerings.
Conclusion
Thus, it can be concluded that open water fish farming in British Columbia is having
number of negative and positive external factors to consider. In addition, this report also
identified about some major competitive factors in this industry and their potential impacts on
the business. It is concluded that initiation of the differentiation strategy will help the new
entrants in offering distinctive products and overcoming the intensity of the substitution factor.

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Reference
B.C. government 'very interested' in moving open-net fish farms onto land, minister says | CBC
News. (2018). Retrieved from http://www.cbc.ca/news/canada/british-columbia/fish-
farms-bc-closed-containment-donaldson-tenures-1.4566374
Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson higher Ed.
Britishseafishing.co.uk. (2018). Fish Farming and Aquaculture | Britishseafishing.co.uk. [online]
Available at: http://britishseafishing.co.uk/fish-farming-and-processing/ [Accessed 27
Jun. 2018].
Britishtrout.co.uk. (2018). Trout Farming | British Trout Association. [online] Available at:
http://britishtrout.co.uk/trout/farming-trout/ [Accessed 27 Jun. 2018].
BUN, N.P., KIMCHHEA, C. & HOUR, P.L., 2014. Cambodia launches pilot study to. Catch and
Culture, 20(1).
Cranford, P. J., Reid, G. K., & Robinson, S. M. (2013). Open water integrated multi-trophic
aquaculture: constraints on the effectiveness of mussels as an organic extractive
component. Aquaculture Environment Interactions, 4(2), 163-173.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
El-Sayed, A.F.M., Dickson, M.W. & El-Naggar, G.O., 2015. Value chain analysis of the
aquaculture feed sector in Egypt. Aquaculture, 437, pp.92-101.

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Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated
approach. Cengage Learning.
Schwenger, D., Straub, T., & Borzillo, S. (2014). Non-governmental organizations: strategic
management for a competitive world. Journal of Business Strategy, 35(4), 11-19.
Somerville, C., Cohen, M., Pantanella, E., Stankus, A., & Lovatelli, A. (2014). Small-scale
aquaponic food production: integrated fish and plant farming. FAO Fisheries and
Aquaculture Technical Paper, (589), I.