Environmental Analysis Assignment Evaluating Case Of Tassal Group
Question
Task:
This assessment is based on environmental analysis related concepts. You are required to produce a report on environmental analysis assignment introducing Tassal Group followed by a detailed external and internal analysis by applying PESTLE and VRIN frameworks. The outcome of the environmental analysis should indicate strengths, weaknesses, opportunities, and threats that the management of Tassal Group should consider when developing strategies.
Answer
1. Introduction to Tassal Group
1.1 Introduction
Founded in 1986, a Tasmania-based Australian salmon farming company is the Tassal Group. The largest producer of Atlantic salmon of Tasmanian grown, Tassalhas a supply chain in both international and domestic market.
1.2 Revenue and Staff Strengthen
The gross revenue of the Tassal group is 43.09 crores AUD. In 2017, the revenue of the group is A$ 450.45 million. They employed over 1200 people (ZoomInfo Technologies LLC, 2020).
1.3 History
In 1986Tassal built their first firm in Dover’s pure water for salmons and a hatchery was developed in the Central Highlands of Tasmania. The first commercial harvest of 53 tons of Atlantic salmon was announced in 1987. International ISO9002 was awarded in the year 1996 for quality accreditation and maintenance. In 2003 it was listed on the Australian stock exchange. Hobert, Salmon shop, and Smpoit restaurant open in 2007 (Tassel Group, 2020). In 2010 Tassel won. International Innovation and Aqua vision Innovation award held in Norway and the company sets Guinness world record for world largest salmon terrain. In 2015, it benchmarked as the world’s top seafood company by seafoodintelligence.com (Tassel Group, 2020).
1.4 Industry Dynamics
Enhancing Salmon growing performance through Selective Breeding Programme, reducing operating costs, maintaining existing channels, improving product freshness, Tassel wants to improve return.
1.5 Competitors
Major competitors of Tassel Group are Petuna aquaculture, Bumble Bee Seafoods Company, The New Zealand King Salmon, Cermaq Group, etcetera.
2. External Analysis (PESTLE Model)
The effective analysis of the external environment with the help of the PESTLE model can emphasize different characteristics of an enterprise in their existing complexity, uncertainty, and dynamism (Shtal et al., 2018). The PESTLE analysis of Tassal Group will be,
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Political- In public health, policy-makers can often intervene in the reduction of tobacco usage by conducting political activities (Ulucanlar, Fooks and Gilmore, 2016). Besides, the other political risks to the Tassal Group are related to the military involvement, bureaucracy by the government, trade regulation, tax and wage legislation, and anti-trust laws. Tax regulations in different countries affects business.
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Economic – The economic factors in the Tassal Group have revolved around the macro-environmental aspects, such as interest rate, foreign exchange rate, inflation and savings rate, and investment procedure. The ever-changing exchange rate and stability require among the host countries. The maintenance of labor costs, productivity rate, and the economic business stages – recession, recovery, and prosperity are essential in analyzing the financial condition at Tassal Group. The risks are associated with unemployment, inflation, and interest rates.
Internal costs like interest rate, foreign exchange cost, labor cost affects business for small and medium companies. |
Social – The social factor at Tassal Group is related to the potential customer demographics and class structure in expanding the business. On the other hand, the education and hierarchy among the employees and management of Tassal can affect the business procedure. Entrepreneurial approach and positive gesture towards the health and environmental benefits are helping the growing the customer and investment base for the Tassal Group.
Various social factors plays key role in business. |
Technology – The recent technological development in Tassal Group enhanced its production process in conducting business with high-quality salmon and in their other industries. The technological disruption makes an effective impact on the production quality, cost, regulation, resource and customers (Millar, Lockett and Ladd, 2018). The cost and value structure are also a part of technology development at Tassal Group.
Advance countries with enhancing technologies get more advantage than developed and under developed countries. |
Environment – Climate change is related to the increasing emission of carbon and other greenhouse gases that contributes to the industrial sector with a negative impact (Christodoulou and Cullinane, 2019). Tassal Group faces environmental impact from different liability causes, such as Florida and Taxes, have liability cause to prevent any environmental mishap or disaster. The risks associated with Tassal Group in terms of the environment are inefficient recycling, adopting ecological products, effective waste management, and the usage of renewable energy.
Change in environment is a mjor concern worldwide and affects local and international business. |
Legal – In the Tassal Group, the legal constraints are related to the anti-trust law imposed on the Beverage, Tobacco, and Food industry. The epistemological and evolution of intellectual property can enhance knowledge in the legal environment of a company (Orozco, 2017). Other legal constraints of Tassal Group are related to the data protection system, health and safety regulation, and consumer protection law.
Many legal boundaries companies has to face which affects business decision and profit. |
3. Internal Analysis (VRIN Model)
In the VRIN framework capabilities and resources of a firm are explores against four criteria, such as – rare, valuable, non-substitutable, and costly to intimate. The nature of competitive advantage is determined by the VRIN model. Strategies, dynamic capabilities, and business models are interdependent(Teece, 2018).A strategic analysis tool like the VRIN framework helps an organization to protect and uncover the resources and capabilities for the competitive advantage of the long-term.
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Valuable – The most valuable resources of the Tassal group is its seafood, Atlantic Salmon along with prawns. Other valuable resources are their hatcheries, nurseries, sea cages, processing facilities, smokehouses,retail outlets, and mobile salmon truck. Human Capital is also considered a valuable resource for an organization (Pasban and Nojedeh, 2016). For Tassel group their employees, support staff, distributors, suppliers, stakeholders, customers are valuable human capital. |
Rare – Tassal Group has three directly controlled Salmon Hatcheries and majority ownership of an Industrial hatchery operated by Salmon Enterprises of Tasmania Pvt Ltd., four marine farming zones at the diverse location, and five processing facilities. A retail outlet, The Salmon Shop is also owned by Tassal. Along with these rare resources,Tassal has a great management team. Strategy makers of a company enhanced the ability of an organization to learn the host market (Suder et al., 2017).Tassal has a great management team to increase business locally and internationally. Tassal also has an aqua spa facility for freshwater bathing of fish,transportation of juvenile fish from nurseries to grow out area. |
Costly to Intimate – Tassel group takes a new strategy to increase the size of average fish which increases annual production cost. Feed cost per fish is also increasing. This strategy may cause a restriction in the expansion rate. There is also a need for equity rising for Tassal. In an advanced economy, there is much evidence of rising inequalities (Arundel, 2017). Equity rising will reduce levels of debt of Tassal. One farm among three acquired by Tassalshows a higher margin on prawns over salmon. As most of the prawns consumed in Australia are imported so the market price will depend more on the growing conditions of the foreign country. Tassel has to fund further growth initiatives by rising equity. |
Non-substitutable – The business of Tassal is hampered due to climate change.Tassal has to adopt a more sophisticated risk management processwhich will plan for 10 -15 years for salmon production. In the future, there will be a significant riskin social and economic activities due to climate change (Nyberg and Wright, 2016). Climate has a potential impact on salmon both indirectly and directly.An increase in ocean temperature, ocean current flow,and acidification of ocean water has a direct impact on marine life. For Tassal, the impact of climate change is a major challenge. So, they must adopt business processes and systems.Tassal engages scientists to identify emerging climate changes and adaptation processes. Tassal improves a selective breeding process to develop fish that are more resistant in lower oxygen conditionsand warm water. Tassal also invests in different monitoring services to identify various indications.Tassaltaking up various innovative solutions at an early stage to cope up with changes. |
4. Recommendations
Tassal group is in the main position in food, beverages to support the country’s political and economic stability. It is revolved around the macro-environmental aspects like interest rate, foreign exchange rate, and investment procedure. VRIN model helps the Tassal group to protect and uncover the resources and capabilities for long term competitive advantage. There is interdependency between strategy, business model and dynamic capabilities (Teece, 2018). Dynamic capability of a firm helps to shape the proficiency in designing business model.
4.1 Two Strengths
- Tassal Group has its functional role in food and beverage and has a smokehouse and a retail outlet and a mobile Salmon truck. They should expand their business by opening more outlet.
- Tassal has six marine regions that hold enough salmon fish to produce 120 tones after harvesting. They should carefully preserve this regions from environmental changes.
4.2 Two Weaknesses
- Tassal group should focus on labor costs, unemployment, and interest rate. It should focus on their quality control as it has a low budget for this.
- The levels of current assets are low comparing to current liabilities and it can create a problem for the company. Tassal group should implement plan to get business assets by channelizing their business and go for short term debt to solve current liabilities.
4.3 Two Opportunities
- As the market share of the Tassal group is high enough, they can look for e-commerce or online marketing to increase the customer reach.
- Tassal group can promote their product on social media and also develop their tourism business to reduce transport costs.
4.4 Two Threats
- Recently, the climate is changing rapidly due to global warming, and the greenhouse effect can be a high risk for the Tassal Group. A large number of Salmon fish are dying due to environmental changes and pollution. It harms their business. Tassal Group should opt for alternative artificial model for Salmon production.
- Nowadays, many companies are developing their business around this and it can be a threat to Tassal Group. The new companies are coming with new technologies and features which can down the market of Tassal Group as customers are attracted to the technology. Tassal group should made a thorough market research to find the potentials of his competitors and implement suitable strategies.
5. Conclusion
The main concerning factor in Tassal Group is their operational role in food, tobacco, and beverages, which needs continuous support from the country's political and economic stability. Technology is the reason behind achieving disruptive innovation and strategic growth in the operational process of a company. By developing individual human resources, Tassal can create useful competition between competitors. The external environment analysis on the Tassal Group will help in understanding their political, economic, and technological scenario with its competitors along with other discussing areas.
6. Reference
Arundel, R. (2017) ‘Equity inequity: Housing wealth inequality, inter and intra-generational divergences, and the rise of private landlordism’, Housing, Theory and Society, 34(2), pp. 176–200.
Christodoulou, A. and Cullinane, K. (2019) ‘Identifying the Main Opportunities and Challenges from the Implementation of a Port Energy Management System: A SWOT/PESTLE Analysis’, Sustainability, 11(21), p. 6046.
Millar, C., Lockett, M. and Ladd, T. (2018) ‘Disruption: Technology, innovation and society’, Technological forecasting and social change, 129, pp. 254–260.
Nyberg, D. and Wright, C. (2016) ‘Performative and political: Corporate constructions of climate change risk’, Organization, 23(5), pp. 617–638.
Orozco, D. (2017) ‘The evolution of an interdisciplinary course: intellectual property and business strategy’, Technology & Innovation, 19(2), pp. 525–535.
Pasban, M. and Nojedeh, S. H. (2016) ‘A Review of the Role of Human Capital in the Organization’, Procedia-social and behavioral sciences, 230, pp. 249–253.
Shtal, T. et al. (2018) ‘Methods of analysis of the external environment of business activities’, Espacios, 39(12), p. 22.
Suder, G. et al. (2017) ‘Extreme case learning: the manager perspective on rare knowledge and capabilities development’, Knowledge Management Research & Practice, 15(1), pp. 130–145.
Teece, D. J. (2018) ‘Business models and dynamic capabilities’, Long range planning, 51(1), pp. 40–49.
Ulucanlar, S., Fooks, G. J. and Gilmore, A. B. (2016) ‘The policy dystopia model: an interpretive analysis of tobacco industry political activity’, PLoS Medicine, 13(9), p. e1002125.
Teece, D.J., 2018. Business models and dynamic capabilities. Long range planning, 51(1), pp.40-49.
Tassel Group. (2020). Our Product. Retrieved from tasselgroup.com: https://tassalgroup.com.au/
ZoomInfo Technologies LLC. (2020). Tassal Group. Retrieved from zoominfo.com: https://www.zoominfo.com/c/tassal-group-limited/93683970
