MGT5STR: Strategic Analysis and Recommendations for Huon Aquaculture

This report provides a comprehensive strategic analysis of Huon Aquaculture, a prominent agribusiness company in Australia's aquaculture sector. It identifies the company's business units, product lines, and revenue streams, emphasizing the importance of its largest revenue units. The analysis delves into the different business-level strategies employed by Huon Aquaculture, including cost leadership and differentiation, and examines the competitive forces at play using a model of competitive reality. The report further proposes an implementation plan and evaluation strategy, offering recommendations for the company's future strategic direction, focusing on enhancing employee skills, improving communication with distributors, and maximizing customer satisfaction. The ultimate goal is to increase revenue and solidify Huon Aquaculture's competitive position in the Australian and international markets. Desklib offers a range of resources including similar solved assignments and past papers for students.

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STRATEGIC MANAGEMENT 1
Executive summary
Huon Aquaculture is popular in the Australian agribusiness market due to its wide range of fish
products in normal and premium qualities. The organisation is looking an effective strategy in
order to expand its business further in the high competitive market in Australia. Following the
cost leadership and differentiation strategy procures competitive advantage in the market and
paves the way for the company to earn high profitability. However, high competition in the
Australia aquaculture agribusiness market makes the organisation more focused on its customer
maximisation and an implementation plan with recommendations are drawn for developing
future security and sustainability for Huon Aquaculture.

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Table of Contents
Introduction......................................................................................................................................3
Part A...............................................................................................................................................3
Operation in Australia..................................................................................................................3
Units, products and service lines.................................................................................................4
Revenue units and its importance................................................................................................4
Part B...............................................................................................................................................5
Different level of business strategies...........................................................................................5
Related to the company...............................................................................................................5
Part C...............................................................................................................................................6
Model of competitive reality.......................................................................................................6
Competitive rivalry..................................................................................................................6
Suppler power..........................................................................................................................6
Buyer power.............................................................................................................................6
Threat of substitution...............................................................................................................7
Threat of entry.........................................................................................................................7
Part D...............................................................................................................................................7
Implementation plan and evaluation strategy..............................................................................7
Recommendations for future direction............................................................................................8
Conclusion.......................................................................................................................................9
Reference.......................................................................................................................................10

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Introduction
Huon Aquaculture is one of the renowned agribusiness company mainly operated in
Western Australia. The business was started in 1986 with the salmon farmers. The quality of
products and the ingenuity of operations are the key factors that make Huon Aquaculture as one
of the leading agribusiness organisation in Australia. Furthermore, the ethical and sustainable
business practice are also crucial for the business organisation in order to bring efficacy into the
organisational practice in terms of increasing production responsibly and safely, health and
welfare of the fish and safety of the workers. It is important for Huon Aquaculture to ensure its
sustainability measures and finds out any gaps into the sustainability practice. Based on this
understanding, this report aims to emphasis on the operations of Huon Aquaculture in Australia
and its competitive advantage that can be resolved through the implementation of effective
planning and sustainability.
Part A
Operation in Australia
Huon Aquaculture is focusing on the practice of establishing an effective business
practice in Australia. The company cares to focus on the increased volumes, improved pricing in
the domestic market and the continued strength in the international salmon price. The overall
production in salmons by 25% makes the organisation highly enthusiastic to establish market
further (huonaqua.com.au 2019). Moreover, it can be argued that expanding the market in Asia
and international retail market helped Huon Aquaculture to increase its revenue up to 4% in the
financial year of 2018 (huonaqua.com.au 2019). It is also associated with the strategy of capture

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growth and build production and enhance operational efficiency for Huon Aquaculture that will
bring profitability in the organisational practice.
Units, products and service lines
Most of the products of Huon Aquaculture are associated with the salmon productions.
However, there are different range of products that Huon Aquaculture offers. The productions
are based on premium items to the general so that both the rich and the middle class people will
be considered as the target market of the company. The company is focusing on both the service
and the product differentiation. All the products will be delivered to the address within the
business days of 3-7. Moreover, it is also depended on the product availability. Huon
Aquaculture is like to notify the customers within 2 business days about the dispatch day and all
the details. As a result of that it will be effective for the business organisation to establish an
effective measure for the product.
Revenue units and its importance
The increase in the sales revenue can be identified as one of the promising factors for the
development of the organisation. The sales revenue of the organisation is increased in the fiscal
year of 2018 with 23%. In the financial year of 2018, the sales revenue of Huon Aquaculture
was $317.9 million (investors.huonaqua.com.au 2019). As a matter of fact, the retail market sales
is also hiked into a rapid pace with 4% in 2018 in compare to 2017 (investors.huonaqua.com.au
2019). Therefore, it would definitely provide a competitive advantage to Huon Aquaculture in
order to survive in the high competitive market in Australia and in the international market as
well.

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Part B
Different level of business strategies
According to Kurt and Zehir (2016) it can be stated that the cost leadership and
differentiation strategies are identified as the broad target of the companies in order to bring
more efficacy into the business of the organisation. Jyoti, Arora and Kour (2017) opined that cost
leadership deals with the low cost production which is also varied and relied on the specific
industry. The concept is associated with the practice of rendering economies of scale, proprietary
technology and the adequate access to the raw materials. On the other hand, differentiation
strategy is referred as the unique dimension of the organisation that facilitates wide value of the
buyers and the customers. It is resembled with the premium pricing strategies in order to
maximise the customers extensively.
Related to the company
Huon Aquaculture tries to deal with both the cost leadership and the differentiation
strategies in order to establish a solid business in Australian and the international market. As far
as the strategy of cost leadership in Huon Aquaculture is concerned, it can be stated that the
company is highly associated with the practice of establishing a competitive pricing strategy for
attracting more target customers. One of the major concern for the organisation is to establish an
effective measure so that both the rich and the mediocre buyers can get the opportunity to buy
the products as per their needs and preferences. On the other hand, Huon Aquaculture also
focuses on the differentiation strategy in order to create some premium products that can be
bought for special occasions. As a matter of fact, the rich customers can buy the premium
products regularly and there is abundant supply of the premium products that are helping the

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company to satisfy its premium customers. This competitive scope of Huon Aquaculture leads
the company to formulate a strategic advantage in the Australian and the international market in
order to procure market expansion and maximisation of customers profoundly.
Part C
Model of competitive reality
Competitive rivalry
High competition in the Australian market is considered to one of the key features in
Australian aquaculture agribusiness industry. According to Lüttgens and Diener (2016) the
competitiveness in business is a healthy practice that fosters advanced business practices by the
organisations. Therefore, in case of Huon Aquaculture also it is important for the organisation
to adapt new strategies in business. There are several other aquaculture companies in Australian
such as Tassal and Seafarmers Group Limited are the main rivals.
Suppler power
The development in the aquaculture business paves the way for suppliers to make a
progress in their business practices in Australia. It is highly profitable for the suppliers to
influence the organisations for meeting the interests of the suppliers (Muir and Salignac 2017).
However, in Australia, the power of the suppliers is low due to the existence of several number
of suppliers.
Buyer power
The buyers in Australian aquaculture industry are played a significant with high power
due to the high competitiveness in the market. Most of the companies are trying to attract the

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customers by emphasising on the differentiation of products and the quality of manufacture
(Aithal 2016). It is associated with creating a range of products for letting the customers to
choose their effective products.
Threat of substitution
The risk of substitution is a severe threat for the aquaculture industry in Australia. There
are number of companies that can make substitute of the products of fish items. As a matter of
fact, the food industry in Australia is highly volatile and requires alternative and unique business
measures that can help the aquaculture business companies to get strategic advantages.
Threat of entry
Threat of new entry is nearly impossible in Australia because the existing companies are
extensively encapsulate the market (Mathooko and Ogutu 2015). As a result of that saturation in
the aquaculture agribusiness market in Australia is inevitable. Moreover, the power of different
aquaculture companies can be an obstacle for the new companies to enter into the market
effectively.
Part D
Implementation plan and evaluation strategy
Goal Action Responsible person Time frame
Maximisation of
customers
Product
diversification
Operation manager,
marketing team and
the senior
management
3 months

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Implementing unique
technologies
Operation manager,
Financial officer,
Senior management
4 months
Stakeholders’
engagement
Senior management,
Executive managers
2 months
Effective marketing
initiative
Marketing manager,
Financial officer,
Senior management
6 months
The evaluation strategy of Huon Aquaculture is associated with the practice of
introducing an evaluation strategy for ensuring the success of the implementation plan. In this
regard, the organisation expects to get a minimum 6% increase in its revenue within the next
financial year. It is essential for Huon Aquaculture to emphasis on the increase in revenue to
understand the increase in purchasing and consumer maximisation.
Recommendations for future direction
As a matter of fact, there are still other important factors that Huon Aquaculture has to
focus in order to solidify the business practice more effectively. Henceforth, some
recommendations are discussed,
 Focusing more on the employee skills and ability in order to increase the production for
the demand in the Australian aquaculture market.
 Conducting training and induction for the employees so that they can perform in
accordance with the organisational objectives.

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 Create better communication with the distributors for establishing a transparent
distribution and bring profit maximisation for the company.
Conclusion
The above discussion is clearly identified the present operation situation for Huon
Aquaculture in Australia. From the operation and business analysis it was found that the
company has to take severe measure for developing its production and distribution services. It is
also considered to be a strategic measure for Huon Aquaculture to retain its business properly
and profitably by establishing on the maximisation of customers. Furthermore, an
implementation plan for customer maximisation is developed that will be measured by the
progress in revenue collection within the next financial year. Therefore, it can be concluded that
the report rightly points out the operation condition for Huon Aquaculture in Australia and
elucidates an implementation plan that will bring more efficacy into the organisational
competitiveness.

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Reference
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. International Journal in Management and Social
Science, 4(1).
huonaqua.com.au, 2019. Our Approach - Huon Aquaculture. [online] Huon Aquaculture.
Available at: https://www.huonaqua.com.au/our-approach/approach/ [Accessed 8 Jun. 2019].
investors.huonaqua.com.au, 2019. PRELIMINARY FINAL REPORT - Huon Aquaculture.
[online] Huon Aquaculture. Available at:
http://investors.huonaqua.com.au/FormBuilder/_Resource/_module/y8hXOlgfx0a4WjSUgjZk7A
/docs/Reports/Annual/HUON_Annual_Report_FY2018.pdf [Accessed 8 Jun. 2019].
Jyoti, J., Arora, H. and Kour, S., 2017. Outsourcing and Organizational Performance: Role of
Cost Leadership, Differentiation and Innovation Strategies. Sustainable Competitive Advantage:
A Road to Success, 171.
Kurt, A. and Zehir, C., 2016. The relationship between cost leadership strategy, total quality
management applications and financial performance.
Lüttgens, D. and Diener, K., 2016. Business model patterns used as a tool for creating (new)
innovative business models. Journal of Business Models, 4(3).
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management, 29(3), pp.334-354.

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Muir, K. and Salignac, F., 2017. Can market forces stimulate social change?: A case example
using the national disability insurance scheme in Australia. Third Sector Review, 23(2), p.57.