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The Peaks and Troughs of Aquaculture Business

Economics +1 more

NORWAY - To succeed on a long-term basis, companies must discover and utilise opportunities and handle threats. This is particularly critical in turbulent environments like the salmon industry.

But what actually are "opportunities" and "threats"? How do they arise? And how can they best be exploited or handled by the companies?

To shed light on these questions, scientists at Nofima Market have studied which opportunities and threats management in a selection of salmon companies perceive.


Two managers from seven companies were interviewed twice in the spring of 2008 to reveal the extent to which the perception of critical events varies within companies and over time.

"A total of 28 different critical events were identified," says Research Assistant Ingelinn Eskildsen Pleym.

"These were mentioned on 64 occasions, of which 38 were threats and 26 were opportunities."

The three most mentioned threats were trade conflicts with the EU, exclusion from a market and salmon diseases. Acquisition/growth, market access and branding strategies were the most frequently mentioned opportunities.

The results show a majority of experienced threats. In addition, the companies experienced first and foremost external threats. This indicates that they are exposed to significant external pressure.

According to Senior Scientist Geir Sogn-Grundvg, this entails significant resources being tied up to handle such threats:

"Companies with little slack will generally have less chance to act in an offensive and market-oriented manner, for example by allocating time and resources to develop new products in collaboration with customers."

Entering a new phase?

The fact that acquisition/growth and market access are regarded as important opportunities indicates that the industry is still in a consolidation phase.

The companies point out only to a small degree the opportunities which product development and branding strategies can give.

This supports the fact that they, like many other companies in the salmon farming industry, are not particularly market-oriented, in the sense that they concentrate on being as large as possible and producing large volumes of standard products, such as whole gutted salmon and fillets, at the lowest possible cost.

However, the fact that two companies identified branding strategies as an important opportunity can be an indication that the industry is entering a new phase.

Large variations

The results also show that the perception of threats and opportunities varies between companies in the same industry, between managers in the same company and also that these are perceived differently over time.

Threat or opportunity?

This indicates that what is perceived as threats or opportunities is subjective and influenced by conditions such as expectations, situation and experiences.

It is in fact far less objective than you could think by reading newspaper coverage. This also reflects the fact that the companies are differently positioned. What one regards as a threat, another may regard as an opportunity which may result in totally different responses.

"From the companies' perspective, this indicates that threats and opportunities should be analysed carefully and they can gain by thoroughly assessing how good the opportunities are and how serious the threats are, so that the appropriate measures can be implemented in time," concludes Ingelinn Eskildsen Pleym.

This study is part of a larger research project focusing on enhanced value adding and differentiation of farmed salmon.