Aquarius Food Industries (AFI) is a small and focused food company

specializing in the production of processed shrimp paste or bagoong

alamang. Shrimp paste is versatile in terms of acceptability in the market
because it is considered as a condiment for different food recipes. The main
ingredients of the shrimp paste which is the shrimp fry was directly
purchased to the fishermen or from the wet market, thus, it has an
advantage of having a low price and abundance of raw materials. The major
regions such as Luzon, Visayas and Mindanao are considered as the
breakdown of the market for the shrimp paste in the Philippines. In
Mindanao, Neptune, the brand name of the product of AFI, is one of the
major players in producing shrimp paste, with a market share of 30 percent,
together with Lasap, a competing brand of Neptune, and 20 percent for
Frisco accounts and the remainder is spread out among few other players.
Consecutively, in Luzon, Shrimp paste is normally bought from supermarkets
shelves with various competitors that have well-known brands. And in
Visayas, the product is hardly sold because of the conventional wisdom that
the region is mainly consists of coastal towns which has fresh seafood that
are

available.

The opportunities of the Aquarius Food Industries are the following: (1) Toll
manufacturing which means that the AFI will extend their output to the
Golden Hands that will increase their sales, (2) SM Bonus is also planning to
toll manufacture their products to fill up the demands of their customers that

will again give an opportunity for the AFI to increase their sales, (3) AFI has
to have a more varied product line to keep up with competition and allocate
fixed costs over more output that will mean a higher profit for their
company, (4) Possibility of exporting the new products, and (5) Processed
coconut items that can utilize the equipment and materials in making shrimp
paste that will serve as an advantage for them. However, there are also
some threats that the AFI must consider like their competitors such as Lasap
(in Mindanao), Barrio Fiesta, Kamayan (Golden Hands), Chowking, SM
Bonus, Lee Kum Kee and Tanjung Malacca including the intentions of Lasap
to modernize plant facilities and squeeze out costs further that make some
of the wholesalers to shift allegiance.

The strategic and operational issues that Aquarius Food

Industries is facing are the following: (1) Toll manufacturing
arrangement for Golden Hands that compromised the total
sales volume of their brand, (2) Having this arrangement
tends to be more volatile that depends essentially on the
availability of shrimp fry, (3) Toll manufactured products are
being sold in Luzon for thrice of its the price. (4) Stretching of

payments terms, (6) SM Bonus also offers AFI to toll

manufacture their product, (5) In the long run, AFI has to have
a more varied product line to keep up with competition and
allocate fixed costs over more output. (6) Processed coconut
items that can utilize the equipment and materials in making
shrimp

paste.

The alternatives that are available to the company are: to

continue or not the toll manufacturing the product of the
Golden Hands and other toll arrangements as it compromised
the total sales of the Neptune and dependability of some toll
arrangements to the supply of shrimp fry as it lessen the
demand if the shrimp fry is abundant. Consequently, they may

choose sell their product directly in Luzon to have the

advantage of getting the higher price and gaining more
revenues or not and to establish or not a new variety of
products that can probably increase their sales. And join in
processing coconut items that utilize the equipment and
materials in making shrimp paste or not because of the
abundance of the players in this particular food segment.

Based on the alternatives that are available, I would

recommend to continue having the toll marketing for Golden
Hands because although it compromised its total sales, it can
be resolved by a good forecasting technique that can be able
to anticipate the right amount of product to manufacture

during a certain period. The AFI may also extend their

production up to Luzon and sell their product for thrice the
price which can be probably done by hiring a logistics for the
distribution of the product. In terms of the development of the
product, it is good to have more varieties of the shrimp paste
because the customers will have the chance to choose other
viand of the product and this maybe a venue for possible
exportation of the product. In addition, the AFI must not
pursue the deal to manufacture coconut items because of
abundant players in this food segment. However, if the one
who offers the deal will make first a further study about the
food segment and will have a favorable output, maybe AFI
can have coconut items because they have already the

equipment and packaging materials. Finally, the AFI must

considered different ways to realize revenues for the
betterment of the company.

Aquarius Food Industries (AFI) is a small and focused food

company specializing in the production of processed shrimp
paste or bagoong alamang. Shrimp paste is versatile in

terms of acceptability in the market because it is considered

as a condiment for different food recipes. The main
ingredients of the shrimp paste which is the shrimp fry was
directly purchased to the fishermen or from the wet market,
thus, it has an advantage of having a low price and
abundance of raw materials. The major regions such as
Luzon, Visayas and Mindanao are considered as the
breakdown of the market for the shrimp paste in the
Philippines. In Mindanao, Neptune, the brand name of the
product of AFI, is one of the major players in producing shrimp
paste, with a market share of 30 percent, together with Lasap,
a competing brand of Neptune, and 20 percent for Frisco
accounts and the remainder is spread out among few other

players. Consecutively, in Luzon, Shrimp paste is normally

bought from supermarkets shelves with various competitors
that have well-known brands. And in Visayas, the product is
hardly sold because of the conventional wisdom that the
region is mainly consists of coastal towns which has fresh
seafood

that

are

available.

The opportunities of the Aquarius Food Industries are the

following: (1) Toll manufacturing which means that the AFI will
extend their output to the Golden Hands that will increase
their sales, (2) SM Bonus is also planning to toll manufacture
their products to fill up the demands of their customers that
will again give an opportunity for the AFI to increase their
sales, (3) AFI has to have a more varied product line to keep

up with competition and allocate fixed costs over more output

that will mean a higher profit for their company, (4) Possibility
of exporting the new products, and (5) Processed coconut
items that can utilize the equipment and materials in making
shrimp paste that will serve as an advantage for them.
However, there are also some threats that the AFI must
consider like their competitors such as Lasap (in Mindanao),
Barrio Fiesta, Kamayan (Golden Hands), Chowking, SM
Bonus, Lee Kum Kee and Tanjung Malacca including the
intentions of Lasap to modernize plant facilities and squeeze
out costs further that make some of the wholesalers to shift
allegiance.

The strategic and operational issues that Aquarius Food

Industries is facing are the following: (1) Toll manufacturing
arrangement for Golden Hands that compromised the total
sales volume of their brand, (2) Having this arrangement
tends to be more volatile that depends essentially on the
availability of shrimp fry, (3) Toll manufactured products are
being sold in Luzon for thrice of its the price. (4) Stretching of
payments terms, (6) SM Bonus also offers AFI to toll
manufacture their product, (5) In the long run, AFI has to have
a more varied product line to keep up with competition and
allocate fixed costs over more output. (6) Processed coconut
items that can utilize the equipment and materials in making
shrimp

paste.

The alternatives that are available to the company are: to

continue or not the toll manufacturing the product of the
Golden Hands and other toll arrangements as it compromised
the total sales of the Neptune and dependability of some toll
arrangements to the supply of shrimp fry as it lessen the
demand if the shrimp fry is abundant. Consequently, they may
choose sell their product directly in Luzon to have the
advantage of getting the higher price and gaining more
revenues or not and to establish or not a new variety of
products that can probably increase their sales. And join in
processing coconut items that utilize the equipment and
materials in making shrimp paste or not because of the

abundance of the players in this particular food segment.

Based on the alternatives that are available, I would

recommend to continue having the toll marketing for Golden
Hands because although it compromised its total sales, it can
be resolved by a good forecasting technique that can be able
to anticipate the right amount of product to manufacture
during a certain period. The AFI may also extend their
production up to Luzon and sell their product for thrice the
price which can be probably done by hiring a logistics for the
distribution of the product. In terms of the development of the
product, it is good to have more varieties of the shrimp paste
because the customers will have the chance to choose other

viand of the product and this maybe a venue for possible

exportation of the product. In addition, the AFI must not
pursue the deal to manufacture coconut items because of
abundant players in this food segment. However, if the one
who offers the deal will make first a further study about the
food segment and will have a favorable output, maybe AFI
can have coconut items because they have already the
equipment and packaging materials. Finally, the AFI must
considered different ways to realize revenues for the
betterment of the company.