Global Value Chain Fit 1: Global Value Chain Management And

Global Value Chain Fitt 1global Value Chain Management And Shipping

Case study - GLOBAL VALUE AND SUPPLY CHAIN MANAGEMENT The assignment should contain the following five contents regarding to the case study. · Problem/Issue Identified ( 4 POINTS) · External Analysis( 4 POINTS) · Internal Analysis(4 POINTS/SWOT ANALYSIS) · Decision Criteria and Alternatives( 2 OR 3 POINTS) · Action Plan( 2 OR 3 POINTS)

Paper For Above instruction

The case study focuses on the international trade and supply chain management of Kalastaa Inc., a Finnish aquaculture company specializing in high-quality salmon and trout. With declining local sales due to market saturation and competition from cheaper imports, Kalastaa aims to expand its export activities, particularly within the European Union (EU). This shift intends to capitalize on the higher quality of its products and access new markets, but it also introduces significant logistical, procedural, and compliance challenges that must be strategically addressed.

Problem/Issue Identified

The primary issue facing Kalastaa is managing the complexities of exporting high-quality Finnish salmon to Denmark via Denmark, and potentially broader EU markets, in a manner that ensures compliance with international trade standards. The company faces hurdles in obtaining and managing proper documentation, ensuring product quality certification, and navigating different stakeholder responsibilities, which have led to delays and financial losses. Additionally, the challenge of maintaining product integrity and meeting buyer expectations amidst logistical and certification complications poses a significant risk to the firm's reputation and profitability.

External Analysis

From an external perspective, the Finnish aquaculture industry operates within a competitive global environment marked by fluctuating demand and pricing pressures. The influx of cheaper Scottish salmon has eroded local market share and compelled Finnish producers like Kalastaa to seek export opportunities, especially within the EU market where demand for high-quality seafood remains robust (García-Sánchez et al., 2017). Regulatory frameworks governing international trade, including EU food safety standards, certification requirements, and documentation protocols, influence operational strategies. The EU emphasizes rigorous food safety and quality assurance, requiring compliance with specific standards that ensure product traceability and safety (European Commission, 2020).

Geopolitical factors, such as trade agreements and tariffs, also impact the export landscape. The recent Brexit development, for example, introduced uncertainties in trade flows between Finland, Denmark, and the broader EU region (European Parliament, 2021). The Danish market’s familiarity with different seafood imports and its lack of experience handling salmon further complicate export procedures. These external factors necessitate a strategic approach aligned with regulatory standards, market expectations, and logistical realities to optimize export success.

Internal Analysis (SWOT)

Strengths: High-quality Finnish salmon, established local reputation, and certification by the Finnish Food Safety Authority lend credibility. The company's small scale allows for agility in operations and close quality control. Membership in export initiatives facilitates international networking.

Weaknesses: Limited production capacity, dependence on external certification agencies, and potential gaps in international marketing expertise. Incompatibility of quality standards and certification communication issues may lead to logistics failures.

Opportunities: Expanding into EU markets with premium seafood products, developing broker relationships, and leveraging certification for branding advantage. Potential to increase export volume and diversify markets beyond local and Danish consumers.

Threats: Market competition from more established suppliers, logistical disruptions, certification ambiguities, and possible quality discrepancies during transit. The increased risk of financial losses due to shipment rejections and damage claims also poses a threat.

Decision Criteria and Alternatives

  • Compliance with international standards for export certification and documentation.
  • Cost-effectiveness and reliability of shipping and logistics options.
  • Ability to meet buyer specifications and maintain product quality during transit.
  • Minimizing financial and reputational risks associated with shipment rejections or disputes.

Alternative strategies include:

  1. Engaging a freight forwarder to streamline logistics, documentation, and certification processes, thus reducing operational risks.
  2. Adopting Incoterms® terms such as FOB (Free on Board) or CIF (Cost, Insurance, and Freight) to clearly define responsibilities and costs between Kalastaa and importers, ensuring clarity in shipping and insurance obligations.
  3. Strengthening certification processes and quality assurance to ensure documented compliance, thereby reducing the risk of shipment rejection.

Action Plan

1. Implement a comprehensive certification review and quality assurance process, including detailed colour grading documentation aligned with SalmoFan standards, to prevent discrepancies.

2. Engage experienced freight forwarders with expertise in EU exports and salmon shipments to handle logistics, customs clearance, and documentation, ensuring compliance and efficiency.

3. Adopt clear Incoterms® such as FOB or CIF that appropriately allocate responsibilities and costs, and establish contractual obligations with buyers regarding inspection and quality acceptance upon arrival.

4. Establish robust communication channels with Danish importers and relevant certification agencies to streamline documentation, inspection, and dispute resolution processes, reducing the risk of non-compliance and financial loss.

5. Develop contingency plans for logistical disruptions or documentation failures, including alternative shipping routes or suppliers, to mitigate supply chain risks and safeguard revenue.

6. Invest in training for staff involved in export operations on international trade documentation, compliance standards, and effective negotiation with carriers and brokers to enhance operational efficiency.

Through these strategic actions, Kalastaa can strengthen its entry into EU markets, manage risks more effectively, and establish a sustainable export model that leverages its product quality and certification advantages.

References

  • European Commission. (2020). EU food safety standards. Retrieved from https://ec.europa.eu/food/safety_en
  • European Parliament. (2021). Impact of Brexit on trade. Retrieved from https://www.europarl.europa.eu
  • García-Sánchez, I. M., et al. (2017). Seafood trade in the European Union. Marine Policy, 84, 124-131.
  • International Trade Centre. (2018). Export documentation and procedures. Retrieved from https://www.intracen.org
  • Kumar, V., & Sharma, P. (2020). Supply chain management in seafood export. Journal of Supply Chain Management, 24(3), 175-188.
  • McKinnon, A., et al. (2019). Logistics strategies for food export. International Journal of Logistics Management, 30(2), 556-578.
  • OECD. (2021). Global value chains and trade policy. Retrieved from https://www.oecd.org
  • World Trade Organization. (2019). Trade policies and standards. Retrieved from https://www.wto.org
  • Yin, R. (2018). Stakeholder management in international trade logistics. Journal of International Business Studies, 49(6), 689-708.
  • Zhao, C., & Ng, S. (2022). Managing cross-border food supply chains. Food Control, 137, 108866.

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