Strategy Survival Guide

Analysing data - Market analysis
In Practice: SU Fisheries Project
As part of the fisheries project, an Industry Analysis Workstream sought to understand the drivers in the
Industry and the extent and location of the current crisis in the industry. On the basis of understanding the
current drivers and issues we identified a number of long-term trends shaping the long-term picture for the
industry.
Analysis of the Current State of the Industry
We tried to answer a number of core questions:
• What is the appropriate definition of the industry in which the UK fishing fleet is? Here we
looked at the UK, EU and global fish markets in order to assess the drivers of profitability for the UK
fishing fleet.
• What are the different product markets? The UK fishing fleet can be split into separate fleets
catching different type of fish. The three main categories are Pelagic, Whitefish and Shellfish. Since the
fleet structures and economics of the different fleets are different it was important to look at them
individually. It was also important because EU quota rules are specified at the species level.
• What are the key drivers of profit in the industry? Once we had defined the individual segments,
we then set about understanding the drivers of profit within each segment. In order to do this we used a
Porter’s five forces analysis to tease out possible drivers across different segments. Example drivers
were things like stock levels by different species, demand for different species, competition from
foreign imports etc.
• Where is value being added across the supply chain? Using the analysis carried out within the 5
forces framework we also sought to explain the variations in profitability across the supply chain. By
looking at the different customer needs across the supply chain, we were able to identify possible
future trends in the industry as well as explain where value has been migrating to in the industry.
Analysis of trends impacting future shape of the industry
• What are the major forces shaping demand in the fishing industry? What are the income
elasticities associated with fish? How will consumer demand change over time for exotic species? How
global will demand be for fish? How different will the demand function for farmed products be
compared with those of wild catch?
• What is the outlook of supply in the industry going forward? How endangered are global stocks
compared with those around the UK? If there is a global market for fish products, how competitive will
the UK fleet be in this market? What has been the experience of our international competitors?
• What will be the market structure in the long run? How will the fish market be structured and how
will the transaction occur? Will there be vertical or horizontal integration? Will fish be sold using forward
contracts or through auctions? How will developments in aquaculture cannibalise the wild fish product
markets?
• What are the technological, social and regulatory trends affecting industry structure in the long
run? How will technological developments impact the cost of fishing and the competitive industry
structure? How will the EU regulation relating to tariff barriers etc. Impact the scale and scope of the
market. How is regulation in terms of quota setting and monitoring likely to be conducted in the future?
Input into other Workstreams
Having investigated these trends we were able to make both qualitative and quantitative assumptions
about what the industry could look like over our time horizon. At this stage we were able to feed this
analysis and understanding into the other workstreams. For instance we were able to inform the
"communities" workstream regarding how fishing communities may be impacted by industry developments.
Additionally we were also able to feed into policy work being undertaken by explaining how the industry
might react to specific policy measures.
Strategy Survival Guide – Strategy Skills
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