International Competitiveness of the Irish Shellfish Processing Industry-An Adapted Porterian Analysis

By Ryan, Una; Pitts, Eamonn et al. | IBAR, January 1, 1998 | Go to article overview

International Competitiveness of the Irish Shellfish Processing Industry-An Adapted Porterian Analysis


Ryan, Una, Pitts, Eamonn, Lenihan, Helena, IBAR


Introduction

This paper summarises the findings of a study of the international competitiveness of the Irish shellfish processing industry in Ireland, using an adapted Porterian model (Ryan, 1996). Porter's 1990 model of international competitiveness was modified and operationalised to determine the sources of competitiveness within the Irish shellfish processing industry.

Methodology

Porter's theory was modified in two respects; the EU was included as a third exogenous force and co-operation was incorporated into the model. Porter's theory was operationalised using a questionnaire, which was administrated personally to twentytwo managing-directors (from a population of twenty-nine) within the industry to identify its sources of competitive advantage. The potential sources of competitiveness of the industry were analysed using the Porter framework (See Figure 1) and are discussed in the paper using Porter's headings and definitions.

There has been considerable interest in the use of the Porter framework for analysis of the competitiveness of sectors in the period since this study was completed. The appropriateness of the Porter concept of clustering to explain Irish economic development was analysed in a series of case studies financed by the National Economic and Social Council (1998). A major finding related to the limited role of domestic demand, domestic rivalry and domestic suppliers and the greater role of foreign owned multinationals in Ireland in explaining competitiveness (ibid p. 5) The Porter framework was also used in a transnational collaborative study on competitiveness in the food industry (Traill and Pitts, 1998). A major conclusion was that "we disagree with what seems to be both a basic assumption and a main result of the Porter model - that competition alone is the driving force that explains competitiveness. In our studies, the ability to co-operate has been very important in the building of competitiveness, although that co-operation takes place in an increasingly competitive environment". (Lagnevik and Kola). They also found it necessary to redefine the "home base" concept of Porter (ibid). Despite these limitations they found Porter useful for analysis of competitiveness. Some of these findings are presaged in the study reported here.

The Irish Shellfish Industry

In recent years, the Irish shellfish industry has accounted for about 10% of national seafood production by volume and 17% of its first sale value. Although some species of shellfish such as lobster are most valuable in live form, the processing of shellfish has become a significant and important industry over the last decade. While the industry is relatively young, it has grown significantly with twenty-nine firms involved in shellfish processing in 1995. However, accurate or even regular figures on the tonnage and value of shellfish processed in Ireland are not available. The only estimate for the level of processing is that of the Department of the Marine for 1992 of 5,420 tonnes valued at 18.4 in which was projected to reach 11,420 tonnes by 1999 valued at 38.7 million (Department of Marine, 1995)

The level of processing varied among the firms due to the different shellfish being processed. Only 36% of the firms interviewed were committed to processing all the shellfish they purchase. 68% of the firms interviewed were involved in some form of secondary processing (either cooking, smoking or breading shellfish) as part of their production, with the remaining firms involved in the production of frozen shellfish.

The Irish shellfish processing industry's diamond

Overall, from the research conducted, the Irish shellfish processing diamond was found to be weak. The majority of the determinants are not adding any competitive advantage and in fact some were causing competitive disadvantages for the industry. Yet 95.5% of the firms interviewed believe the industry will continue to be successful in the future.

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