Greg Stamboulidis started his business by purchasing the firm of small business with very low profit margin at 10-15 percent and without any competitive advantages. By 1990, the very young Stamboulidis managed the company under the surviving stress of increasing input price of shark. That was also the time of late 1980s; Greg realized the best potential supply of shark in South Africa with lower price. His findings, using a SWOT analysis, could really solved the enacted Southern Shark Fishery Management in 1988, which limited the volume of exploiting and as it turns out, raised the price up to twice. By this way, he achieved the goals of low-cost input, resulting in higher ...view middle of the document...
By focusing on low-cost management and retaining long lasting and multilateral relationship with suppliers, Greg contributed to the distance between the average market price of shark in Australia and their input purchase price from overseas. (as seen in chart 1)
Chart 1: The rise in shark price per kilogram in dollars (Pech, 2009))
At the same time, Greg continue to find and vary the portfolio suppliers, negotiating joint venture with partners in Uruguay, Brazil, Mexico, India, Iran, Fiji, Brunei and Turkey.
Once the low cost management came successful, the leader of Stambos began to concentrate on differentiating their products as to be packaged and healthy products. They always printed honestly the origins and its ingredients on the productâ€™s labor to dispel the customersâ€™ fear. Furthermore, by joint venture, Greg convinced their suppliers to conduct the processing as filleting and battering fish outside Australia at reduced cost, which is known as outsourcing: â€œsubcontracting a service to a third party company to provide a service that could otherwise be performed by in-house workers. Simply put, outsourcing refers to a transfer of a business function or a service to an external, third party service provider.â€ (Henderson, cited by http://EzineArticles.com/3922416)
Stambos completed transfer value chain to customers end smoothly. They succeeded in convincing and negotiating with suppliers about trust and quality, in creating reputation with customers, and above all, in changing and shaping the Australian shark market (new standard of quality and removing the â€œback yardersâ€ of the industry). The value chain was transferred to customers as frozen, filleted or packaged products with door-to-door delivery, which also adds the value to the firm. Such success is the most crucial for a small business because â€œCustomer value occurs when the customer receives more benefits from purchasing the product or service than they give up in exchangeâ€¦ competitive advantage is not just about making a profit. Competitive Advantage occurs when the organization makes more profits than its competitors do from an equivalent set of activities (Graham & Paul, 2011). As a result, their customer had rocketed up from under100 in 1985 to nearly 800 in 2005. That is why the volume of processed and sold shark by Stambos peaked up at more than 250 tons in 2005. (Pech, 2009)
Greg came into the shark market from the very first time as a small business under a turbulent environment. He chose a corporate venturing strategy, apart from his traditional organization to gain a competitive market share in the local market and raise the profit margin.
In details, at first, Greg Stamboulidis was a young owner without any experience in the shark industry and his company is at a very small business scale. The profit margin of the company is very low and it cannot express any remarkable position with other rivals in the market.
Moreover, as for the...