Azalea Seafood Gumbo Shoppe Business Analysis

1328 words - 5 pages

Azalea Seafood Gumbo Shoppe is in the Seafood Packaging Industry . In this industry companies take raw seafood materials and package them to sell to supermarkets, grocery stores and restaurants. While Azalea does direct sales through catering the bulk of its revenue is derived from wholesaling its foods (Appendix A). Larger compnaies in the industry typically work through a food broker that will arange selling to supermarkets or grocery stores. A major advantage in using food brokers is that preferred shelf placement can be arranged which aids in sales. For smaller companies in the industry, like Azalea, it is diffiult to have access to food brokers because they do not deal in a high enough volume.
Azalea originally found its niche in the market by having access to seafood from the Gulf of Mexico and selling in Mobile, Alabama, where seafood was a dietary staple. The company has grown in both sales and profits each of the last 4-years, until this most recent year where sales fell 15% resulting in an 18% decrease in profit (Appendix A). The challenge for Azalea moving forward is to develop a strategy that will allow them to grow profits consistently.

Key success factors in this industry include on time delivery, quality product, and brand recognition. Supermarkets and restaurants cannot afford to have shelves sit empty for even a moment. For a company in this industry to succeed it must have a model that allows for on time delivery. This must combated by the cost of keeping inventory levels to high, and the risk of wasting inventory that is no longer fresh enough to be sold. Forecasting product demand is critical for any company in this industry to have enough inventories to supply, without creating profit eating waste. The food quality is also important in the industry. While there is a high degree of price elasticity products must be of good quality to get on to the shelf. Events like product recalls can have a terrible impact to companies in the industry. Brand recognition ensures that the benefits of the quality product are realized. With many substitutes readily available companies in the industry must brand themselves in a way that allows themselves to stick out. Often decisions in grocery stores or made quickly, and with substitutes literally right above or below having a brand image that evokes positive feelings with the end user is important. Meeting these three goals ensures that both customers, the end consumer and the retailer, are satisfied.

Porters Five Forces

Threat of New Entrants

The Seafood Packaging Industry has a few barriers to entry that work in its favor. These barriers include access to distribution channels and government policies. To sell products members of the industry need access to end users that will buy the product. This access is gained by selling to distributors such as supermarkets, grocery stores, and restaurants. Gaining access to these distributors is a difficult task. ...

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