2.3.2. Bargaining power of buyers: Australis should set up the distinguished image as the largest farmed barramundi company. Customers are willing to pay higher price as they perceive that it is worth for the distinctiveness they can attain. In the US, consumers show special concern for safety standard and hesitate to choose a Vietnamese food or Chinese food (Bloch, 2013). In Australia, consumers are very familiar with the barramundi quality label and they are confident about the good taste and processing operation in Australia leaving all nutritional values intact (Young, 2007). 2.3.3. Bargaining power of supplier: Differentiation strategy charges a considerable price for its unique products, suppliers are required to provide adequate and …show more content…
Feed accounts for a large portion in the total production cost and detrimental for the growth of barramundi. Gene of barramundi is also one decisive factors of fish’s health. If feed supplier and breed supplier charge an incredible expensive cost, Australis still have to afford it.To secure the competitive advantages and reduce external potential threat, Australis should develop its feed program and hatcheries programs. This means that they can do vertical mergers and acquisition, buying share in those supplying firms (Sadler, 2003). 2.3.4. Potential entrants: Customer loyalty is the key of Australis Barramundi, but also the barriers for potential entrants. In barramundi market, as mentioned above, the barriers are quite high due to financial and technological requirements. Overall, the Australian farmed barramundi industry where the majority of producers are small, family-owned businesses with fewer than 10 employees. During the past 5 years Australian farmed barramundi production has increased from approximately 2,700 metric tons in 2003 to an expected 7,000 metric tons in 2012. Average farm gate prices have fallen, and cheaper imported barramundi is gaining market share. This coupled with the current global recession is impacting significantly on the profitability of Australian barramundi farmers. It deteriorate the determination of the potential new entrants to this markets (Howieson, Hastings and Lawley,