1) Characterise the development of Greg Stamboulidis’s corporate venturing In 1985, Greg Stamboulidis bought a small fish company from an old man then named it Stambos. By the time he bought it, the profit margin of that company was low. At that time, Greg focused on providing shark to his customers and he still used the same method as the previous owner : he purchased his fish supplies early in the mornings from the Melbourne markets and kept a narrow business with the profit margins of only 10% - 15%. (1) Greg had many obstacles: the prices of shark was rising from AUD$3.50 to AUD$9.00 between 1985 and 2005 (2) while shark supply was unstable, a lot of competitors, high labour costs and variability in the quality of product, that’s why Greg had to find some new supplies in order to survive. He chose the “cost leadership strategy which is “an integrated set of actions designed to produce or deliver goods or services at the lowest cost, relative to competitors, with features that are acceptable to customers” (3) to bring his products to customers at the lowest price. Firstly, Greg tried to find shark supplies in Singapore, Philippin and Malaysia because in those countries, they only used shark fins and want to sell the rest of the shark body at acceptable price but the problem was the shark bodies were not gutted. That’s why Greg chose Affrica as the best source of supply. With the price at only AUD$3.00 per kilogram, Affrica gave Stambos the first competitive advantage against the local competitors. Greg started his supply chain in 1995 by doing business with some smaller suppliers such as Chile and New Zealand in order to strengthen Stambos’s competitive advantage because the unstable politics of Affrica might threat his major source of supply. That was a right move because in 1998, suddenly both South Affrican and New Zealand suppliers terminated their contracts with Stambos. Because of small suppliers all around the world, Stambos could survive but sometimes is had to share supply with competitors due to the growing number of customers. We can see that beside cost-leadership strategy, Greg also used something similar to differentation strategy which is “to produce or deliver goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them” (4) In 2003, Greg re-established his relationship with the former South Affrican supplier and purchased the product which his competitor could not pay at very good price. He also signed a contract with an Uruguayan supplier at AUD$4.80 per kilogram while Australia wholesale shark prices was increasing to AUD$8.17 per kilogram. By 2005, the relationships between Stambos and the South American suppliers led to joint ventures and resulting in the purchase of a fishing vessel and the direct control of thei supplies from South America. At present, Stambos continues to expand its supply chain by finding more suppliers from Brazil, Mexico, India, Iran, Fiji, Brunei, Turkey and others locations (5) to maintain its competitive advantage of high quality products with relative price.
2) Greg might have needed to separate his corporate venturing efforts from his larger traditional organization because: * Greg was a newbie in this kind of business, his business was very small and had low profit. The firm had no competitive advantages over competitors. * Customer’s demand, shark price and the number of competitors in domestic market increased rapidly. * The international supply which was cheaper, would generate profitability. To separate his corporate venturing efforts from his larger traditional organization, firstly Greg used cost-leadership strategy and bring his products to customers at lower price than his competitors. In order to lower cost, he chose South Africa as his main supply. Secondly, Greg established relationships with many other suppliers around the world. Greg also invested in research and development...
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